MENA countries largely recovered from global financial crisis
p>MENA countries largely recovered from global financial crisis
Analysis in a report from the World Bank - ‘Regional Economic Outlook: MENA Facing Challenges and Opportunities’ - indicates that current economic disruption in many MENA countries is translating into lower growth in the short term (now forecast at 3.6 per cent for 2011 down from five per cent), but that opportunities in the medium term offer new hope for an inclusive and sustainable development that has not been seen in the region before.
"The rich experience from countries that have undergone political changes suggest that short-term disruptions to economic growth and social tensions are inevitable,” said Shamshad Akhtar, World Bank Vice President for the MENA region.
“However, transition offers an opportunity for countries to break with the past and set course in a newer direction. A first order of priority is to offer the right signals to restore public and private investor confidence which, in MENA, calls for ensuring respect and citizen dignity through inclusive social policies, a fundamental change in governance frameworks and swiftly restoring macroeconomic stability."
The report finds that by the end of 2010, MENA countries had largely recovered from the global financial crisis, and growth rates had been expected to reach pre-crisis levels in 2011. However, events in early 2011 have affected the short-term macroeconomic outlook and the status and speed of economic reforms in the region.
“The effects of reform tend to follow a J-curve, where things get worse before they get better. Experience from other countries which have made successful transitions has shown an initial decline of three to four per cent in the first year but quickly recovering,” said Caroline Freund, Chief Economist for the MENA region.
“Also encouraging is that successful countries saw significant and fast improvements in voice and accountability, some of the very things that underpin the MENA uprisings. We need to learn from history’s successful transitions and carefully manage the short-term downturn which is where we are focusing our best efforts now. While the challenges are many, the opportunities are more."
