The MENA region is at risk of falling into the middle-income trap with rising unemployment in some countries and a dependence on oil income in others To escape the trap, the region needs to raise productivity growth by encouraging technological development and continuing to focus on education The best way to achieve this is by encouraging private sector investment through deregulation, improved business environments, privatisation, public-private-partnerships and more flexible labour markets MENA has a relatively skilled labour force but doesn’t have the jobs, de-regulating and incentivising private investment in the digital economy could help provide the jobs and raise technological development, which would lead to faster productivity growth and higher living standards for the long term PDF report available here: 20180816 – MENA Advisors – MENA Development, Escaping the trap Countries across the MENA region are facing long-term development challenges. In countries that are not net exporters of oil and gas, growth is too low to create the needed jobs and unemployment is rising, particularly among the young. In oil exporting countries, growth is too dependent on oil revenue to achieve genuine diversification. Although growth rates can reach relatively high levels, this is mainly achieved by hydrocarbon-financed investment and hiring of foreign labour. Depending on technological developments, this may not be a very sustainable model. The lack of “healthy” growth in the MENA region is a symptom of a lack of growth in productivity (the amount produced from workers and capital). In turn, weak productivity growth is mainly a result of……...
