Middle East and North Africa Economic Update, April 2010 : Recovering from the Crisis
This edition of the Middle East and North Africa (MENA) regional economic update concerns the region recovering from the financial crisis along with the global economy. Growth in 2010 is expected to be 4.4 percent region-wide, driven by domestic ab...
Main Authors: | , , , , , |
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Format: | Report |
Language: | English en_US |
Published: |
World Bank, Washington, DC
2016
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Subjects: | |
Online Access: | http://documents.worldbank.org/curated/en/2010/04/12514848/world-bank-middle-east-north-africa-region-regional-economic-update-recovering-crisis http://hdl.handle.net/10986/23977 |
Summary: | This edition of the Middle East and
North Africa (MENA) regional economic update concerns the
region recovering from the financial crisis along with the
global economy. Growth in 2010 is expected to be 4.4 percent
region-wide, driven by domestic absorption as well as a
positive contribution from external demand. The recovery
from the crisis differs by country depending on initial
conditions and the intensity of the impact via the three
principal channels through which the global financial crisis
affected MENA economies-the financial sector, the price of
oil, and the balance of payments, reflecting the impact on
trade, remittances and Foreign Direct Investment (FDI)
flows. The Gulf Cooperation Council (GCC) countries are
leading the regional recovery as oil prices have rebounded
and the GCC financial sector is stabilizing. Developing oil
exporters felt the impact of the crisis, and now the
recovery, largely through the oil price channel, due to the
limited integration of their banking sectors into global
financial markets and the importance of oil in their
exports. The oil importers were affected by the crisis
through the secondary effects on trade, remittances, and FDI
flows, so their recovery will depend crucially on the
recovery in key markets, especially the EU and the GCC
countries. High unemployment has been a problem in MENA for
years, and the crisis has dimmed prospects for improvements
in the near term. Ample oil and gas resources, a youthful
and growing workforce, and a growing momentum to look for
ways to diversify their economies imply that the growth
potential of the region is high, but MENA countries continue
to face formidable longer term challenges. Ensuring access
to finance without compromising financial stability will be
a major challenge in MENA, although issues related to weak
regulatory systems, corporate governance and overdependence
on the banking system also loom large. Key problems of the
business environment in MENA include policy and regulatory
uncertainty and discretion in implementing reforms which
prevent a level playing field for all firms and encourage
the pursuit of privileged access. These problems, coupled
with barriers to entry and exit, have created an environment
of stagnation. Addressing these issues will require applying
rules and regulations consistently and without
discrimination among firms and introducing reforms that
promote business dynamism, private investment, and innovation. |
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