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© World Bank
The Middle East and North Africa region grew an average of 4.7 percent a year from 2002 through 2004, a marked increase from the 3.7 percent average of the 1990s. This strong economic performance was accompanied by job creation that reduced the unemployment rate from 15 percent in 2000 to 13.4 percent in 2004. This recent economic upturn notwithstanding, the region remains highly vulnerable to fluctuating global energy prices. Providing jobs for today's unemployed and tomorrow's job-seekers will require creating 5 million new jobs a year for the next 20 years. To do so, the region will need to develop a stronger private sector, diversify its markets, and increase global trade. WORLD BANK ASSISTANCE Recognition of the urgent need for jobs underpins the Bank's strategy in the region. The regional strategy focuses on five challenges: strengthening governance and public sector management, promoting private sector development and employment, enhancing the quality of education so the region can better compete in the global economy, ensuring equal opportunities for men and women (see “Increasing Business Opportunities for Women”), and managing and conserving scarce water resources. In support of these priorities, the Bank approved lending of $1.3 billion in fiscal 2005. The bulk of this assistance, $1.2 billion, was channeled through IBRD financing to middle-income countries; $0.1 billion was provided as IDA concessional financing to low-income countries. The Bank also delivered more than 60 pieces of economic and sector work in fiscal 2005. This work tackled a variety of issues, including pensions, education, public spending, and labor markets. In addition, the Bank produced a regional report, Middle East and North Africa Region 2005 Economic Developments and Prospects, which examines prospects for growth and measures progress toward structural reforms. For countries in the region that are not eligible for borrowing, the Bank continues to provide advisory services under the Reimbursable Technical Cooperation Program. In fiscal 2005, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates received advice on policy reforms in areas such as the investment climate, education, and human resources planning. In conflict-affected areas, the Bank administered trust funds on behalf of international donors to address emergency needs and strengthen local institutions. Nine trust fund operations were launched in Iraq to restore essential infrastructure and services, and extensive training was provided to help Iraqi ministries take ownership of reconstruction projects. In the West Bank and Gaza, the Bank helped develop an economic plan that outlines measures the Palestinian Authority and the government of Israel need to take in order to rebuild the Palestinian economy as part of the disengagement process. (See also the IFC and MIGA annual reports.) BUILDING THE CLIMATE FOR INVESTMENT In fiscal 2005 the Bank conducted investment climate assessments, which identify key barriers to doing business, for the Arab Republic of Egypt, Iraq, Morocco, Oman, the Syrian Arab Republic, Tunisia, the United Arab Emirates, and the Republic of Yemen. It also conducted analyses of trade logistics in Syria and the Republic of Yemen and funded an export development project in Tunisia. Efforts to improve the investment climate go beyond reducing business costs and ensuring enforcement of contracts. The Bank is working to foster good corporate governance in Egypt. In Iraq it is supporting capacity building to manage the transition to a market-based economy. Improving infrastructure services requires providing a better investment climate for service providers. The Bank is helping governments to better manage their public resources through competition and to improve regulation to facilitate private participation. Egypt is leading the way in this area, with the Airports Development Project. In Algeria, Iraq, and Tunisia, the Bank is supporting the modernization of information infrastructure services through private investment. In countries struck by natural disaster, restoring basic infrastructure is critical to reviving the local economy. In response to the 2004 earthquake in Bam, Iran, the Bank is supporting the reconstruction of telecommunication and transport infrastructure. FOSTERING PARTICIPATION IN DEVELOPMENT The region has made remarkable progress in increasing access to education. But it continues to face challenges in developing a high-quality education system that can respond to the needs of the future job market. A Bank-supported education reform program in Morocco seeks to increase access to basic education for most school-age children by 2008, improve learning, and reduce dropout and repetition rates. In Egypt a Bank loan is helping the government provide good-quality early education, particularly for disadvantaged children. In Iraq, where nearly one-third of schools have to hold double or triple sessions daily, the Bank is working through a multidonor trust fund to finance the construction of new buildings for more than 100 schools and urgent repairs to 140 others. In the Republic of Yemen, where less than half the adult population is literate, the Bank is assisting national efforts to meet the Millennium Development Goals of universal primary education and gender equality by 2015. It is supporting reforms designed to create an education system in which vulnerable groups—including girls, children with special needs, and rural children—will benefit from investments in education. The Social Fund in Yemen is involving the local population in community-based projects. More than 9 million Yemenis benefited from some 400 projects in education, health, water and sanitation, and roads, which created millions of temporary employment opportunities. Access to information is key to promoting participation and ensuring transparency and accountability. In partnership with universities and local organizations, the Bank helped establish Public Information Centers in Algeria, Egypt, Lebanon, Morocco, the West Bank and Gaza, and the Republic of Yemen. These centers provide people with access to information, including the Internet. As part of an ongoing effort to engage with civil society in the region, the Bank launched Development Marketplace competitions in Lebanon and the Republic of Yemen. Hundreds of proposals were submitted for innovative grassroots projects to fight poverty. Winners were given seed money to transform development ideas into projects. In Egypt and Lebanon, the Bank held consultations with civil society on Country Assistance Strategies, engaging stakeholders in a dialogue on the development challenges they face and how best to address them. | 
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