Historic political and economic changes continued to reshape the Middle East and North Africa, with the pace and nature of change differing widely across countries. Whether these political changes will be meaningful depends on the extent to which they lead to concrete social and economic improvements—particularly job creation for the millions of unemployed people, especially youth. Job-creating economic growth is thus critical in this region.
Regional GDP grew 6.4 percent in 2012, up from 3.1 percent in 2011, when political turmoil dampened growth. The projected slowdown in growth to 3.8 percent in 2013 largely reflects a return to more sustainable growth in some oil-exporting countries, whose growth surged in 2012, offsetting a similar drop the previous year. Only 2 percent of the region’s population lives in extreme poverty (on less than $1.25 a day), but almost 14 percent—4 million people—live on less than $2 a day.
World Bank assistance
Bank support reached $2.1 billion for 16 projects in fiscal 2013, including $1.8 billion from IBRD and $249 million from IDA. The Bank also committed $56.4 million in special financing for the West Bank and Gaza.
In addition to its financing, the Bank delivered 74 economic and sector work products and nonlending technical assistance products to the region. The Reimbursable Advisory Services (RAS) framework allows the Bank not only to work with client governments but also to provide analytic and advisory services to subnational governments, state-owned enterprises, nongovernmental organizations, and multilateral institutions. In recent years, the Bank increased the services it provides to members of the Gulf Cooperation Council via RAS agreements. The focuses of these agreements have been on employment, water security, education, urban development, and energy security.
In response to the momentous political transformations in the region, the Bank developed a new framework for engagement. In addition to listening to new governments in order to build programs of support that meet their specific development goals, the Bank expanded its consultations to include a broad range of stakeholders across civil society whose voices were less accessible under earlier regimes. Building on the demands of the Arab Spring and the reform efforts under way, the new framework is based on four main pillars—governance, inclusion, jobs, and sustainable growth— with cross-cutting beams of regional and global integration, gender, and private sector development. The Bank also created the MENA Transition Fund, with an initial capitalization of $250 million, at the request of the Deauville Partnership led by the countries of the Group of Eight (G-8) and the Gulf. Implemented in partnership with 11 international organizations in six transition economies (the Arab Republic of Egypt, Jordan, Libya, Morocco, Tunisia, and the Republic of Yemen), the fund will provide technical assistance on implementing policy and institutional reforms under those pillars.
Transparency and accountability are crucial to creating responsive states that are held accountable for their actions. The Bank is seeking to improve both in a variety of ways. The new $500 million Development Policy Loan to Tunisia fosters more transparent public governance and improvements in the delivery of social services. In the Republic of Yemen, in addition to supporting the national dialogue with knowledge assistance, the Bank created a new Government and Civil Society Organization Partnership and approved a $5 million Public Financial Management Loan to enhance public sector capacity in this critical area.
Increasing social and economic inclusion
This fiscal year, the Bank released Inclusion and Resilience: The Way Forward for Social Safety Nets in the Middle East and North Africa Region. The report shows how safety nets in the region can be enhanced to build human capital, prevent destitution, and replace untargeted and inefficient subsidies.
The Bank is supporting economic measures and other efforts to enhance the voice and participation of women and minorities in the region. In fiscal 2013, it provided $30 million to a social promotion project in Lebanon that focuses on marginalized populations. Larger projects in Morocco and the Republic of Yemen are seeking to improve educational outcomes, including those for underserved populations. Additional funding to the Yemen Social Fund will enhance its ability to deliver services to the poor.
Sustainable private sector jobs—particularly for youth and women—are critical to both economic development and political stability in the region. To help countries create these jobs, the Bank published Jobs for Shared Prosperity: Time for Action in the Middle East and North Africa, which identifies steps for breaking out of the trap of high unemployment and slow growth. The Bank also financed a $70 million Micro, Small, and Medium Enterprises Development for Inclusive Growth Project in Jordan. In Lebanon, it provided $30 million to a project that provides financing to start-ups. In Morocco, a $160 million loan focuses on improving the business environment.
In March, the Bank released Opening Doors: Gender Equality and Development in the Middle East and North Africa, according to which young women in many countries in the region face unemployment rates as high as 40 percent. The report provides hard evidence of the need to create a large and diverse set of job opportunities, for both women and men.
Accelerating sustainable growth
Climate-friendly growth is needed to manage stresses on natural resources. To promote such growth, the Bank is supporting a variety of projects in the region. In Ouarzazate, Morocco, the largest solar power project in the world—supported by the Bank, IFC, the Clean Technology Fund, and multiple partners in the form of a public-private partnership—came to financial close in May 2013. In Djibouti, a $6 million geothermal power project will spur economic growth through green technologies. A $130 million loan to Morocco will improve access to solid waste collection and disposal services in urban areas, and create up to 70,000 jobs in waste recycling activities. In the Republic of Yemen, a $40 million road assets management project will help relieve road transport bottlenecks.
|The regional report for the Middle East and North Africa||PDF (194KB)|