From October 11-13th in Washington, DC: The International Monetary Fund and the World Bank convene for their annual meetings–meaning their respective Boards of Governors decide monetary policy and approve of resolutions. These meetings also provide a forum for private sector, government delegates, and senior IMF and World Bank officials to talk shop, or “dialogue”, with one another. We are not clear which private sector representatives are attending from the MENA region. On a sidenote, these annual meetings have been held twice in MENA countries: Dubai in 2009, and in Istanbul in 2012.
IMF Lowers Growth Projection in Emerging Market Countries: Some MENA Countries Fall into That Subset
The IMF lowered growth projections for emerging market countries, which include a handful of MENA countries (Turkey and UAE). Aside from emerging market countries, the IMF stresses that the ‘Arab Countries in Transition’ (Yemen, Tunisia, Egypt, and Libya–dare we say Syria) must control deficit, debt to deliver inclusive growth. This echoes what was stated in the Spring 2013 meetings. Here is the video discussion: http://bit.ly/1bHlA52
The Middle East and North Africa’s (MENA) aggregate GDP growth will brake to 2.1% in 2013 from 4.6% the year before due to subdued oil output and uncertainties arising from prolonged political transitions, the IMF said in its October World Economic Outlook.
Impact: Why is the youth being hit particularly hard by unemployment?
Wednesday, October 9 at 4pm-5pm: Yemen’s Rafat Al-Akhali, Chairman of the nonprofit Resonate! will speak about youth inclusion with Nemat Shafik, IMF’s Deputy Managing Director on the panel “Youth Dialogue: Innovation in Job Creation from and for the Youth“. They will give their views on why the youth is being hit particularly hard by unemployment. HOPEFULLY they will address how to fix skills mismatch problem in their remarks here.
Here are the highlights on #YouthDialog:
- Nemat Shafik, IMF: We need to make labor markets and institutions youth friendly to avoid a jobless generation.
- ~the linkage of job markets and educational institutions is a key for future curbing of unemployment.
- ~Rather than picking winning sectors in economy, better to create winning economic systems. via @bassemsabry (What would those systems be…and are we discounting the power of the IT sector boosting India, and possibly Lebanon?)
- ~ “Job market today gives more space for very top jobs, low level service jobs, less space for mid levels.”
- Rafat Al-Akhali, Reasonate!: it’s the job of the government, private sector, education sector to meet youth employment needs in
- ~Yemen educating youth on entrepreneurship to address
The Hudson Institute: Markets, Civil Society, and Democratic Change in the Middle East
Policy, International Development, and Economics: Some Myths of Market Economy
There are some myths behind market economies–like if there’s private enterprise, then a market must exist. Last Wednesday at the Hudson Institute, we attended a two-part panel that covered the entrepreneurship and economic side of the post Arab transition countries struggle within civil society and among its youth. Abdel Wahab Al Kebsi, from the US quasi governmental organization, the Center for International Private Enterprise (CIPE) and Isobel Coleman offered their take on how markets, civil society, and democratic change has played out in the Middle East. Al Kebsi and Coleman focused a great deal on the markets of Egypt and Gulf Cooperation Council countries.
Both Al Kebsi and Coleman agreed that MENA countries should aim for “Youth-Driven Economic Growth”. This would be partly achieved from reforming what skills and methods are used in the classroom–which has also been recommended by Marwan Muasher, former Deputy Prime Minister of Reform and Government Performance (now at the Carnegie Endowment for International Peace). Apart from arguing that MENA countries’ school curricula need to be reformed, Al Kebsi shared the “Three Myths of Market Economy”, which are the following:
- Presence of private enterprise means market must exist because
- Business is a monolithic community
- Government hinders market economic reform
We mainly agree with points 1 and 2 because of his observations regarding the lackluster individual economic freedom and low level of associations. But we are not completely convinced of the third myth: “Government hinders market economic reform”.
Alkebsi argues that the presence of private enterprise does NOT mean markets must exist because labor union still need to be formed as they play a key role. Also, rule of law must be in play to give confidence to the citizen/property-holder. According to IMF data from 2011: 92 percent of Egyptians hold property without legal title. Economist Hernando de Soto is a big proponent of property rights and the fundamental, if not causal role, it plays in expanding the formal market economy.
For example, many MENA countries represent heavy public sector employment–meaning that Bahrain, Egypt, Kuwait, Oman, and Saudi Arabia all have more of its citizens employed by the government rather than by the private sector. Regarding associations, we have seen the power of labor unions in Tunisia, and the many labor strikes in Egypt, which organized prior to the Hosni Mubarak’s ouster. Nonetheless, we do not see how strong unions and other types of associations have a pronounced role in holding their governments accountable in countries like Kuwait, Oman, Bahrain, and Algeria.
The second panel focused more on the civil society and political actors in the MENA region with remarks by Sam Tadros (Hudson Institute), Tamara Coffman-Wittes (Brookings Institute), Carl Gershman (National Endowment for Democracy), and Ihsan Yilmaz (Fatih University in Istanbul, Turkey). DC Blogger on foreign policy, Tank Thoughts, covered this panel in sound detail.
Both panels were moderated by former Pakistani ambassador to the U.S., Husain Haqanni, who is now a Senior Fellow and Director for South & Central Programs, Hudson Institute. Haqanni is a well-connected “power-broker” as reported by the New York Times after he resigned from his post earlier this year.