Past and Present Economic Growth and Development in the Middle East and North Africa Region

Implications on Foreign Policy for the United States
Vineet Khanna, University of Maryland Defense and Diplomacy Center, Spring 2011

Letter FroM the PoLICy FeLLowS
The role of foreign aid as a foreign policy tool has long been a contentious debate. ‘Development’ is distinct from the other two ‘big D’s’ of Defense and Diplomacy yet to what extent is it subject to the strategic objectives of these bigger policy and political imperatives? In his Presidential Policy Directive on Global Development, President Obama laid out a vision for America’s development efforts to be one of three equal pillars of America’s foreign policy portfolio with the other two. However, the extent to which this can be realized in practice is still unclear. Promising steps, most noteworthy of which is the inclusion of the USAID Administrator at National Security Council, have been taken but appropriately placing development’s voice in the context of American foreign policy remains challenging. One thing that is clear, however, is that foreign aid and development efforts are extremely important. Nonetheless, foreign aid has come under frequent attack for being ineffective, misdirected, or even for creating perverse incentives and fuelling corruption and, ironically, underdevelopment. Therefore, a frank, open, and innovative debate on aid effectiveness is much needed. Such a debate within the development establishment is already ongoing and many initiatives have been launched to achieve and manage results for improved development outcomes. What this White Paper seeks to do is not to replicate this ongoing process but rather to provide fresh perspectives on several of the many current development challenges. This research is by no way meant to be comprehensive or to provide a single formula for improved aid effectiveness. Indeed, at the core, this White Paper desires to underscore the essential need for context-driven aid policies and activities. It is the sincere hope of the writers’ that this work becomes a contribution to the wider efforts to reframe aid and improve development effectiveness through improving the mechanisms of aid planning, delivery, and management. Matthew Eldridge and Ahmad Soliman Senior Policy Fellows Defense and Diplomacy Center | Roosevelt Institute Campus Network


I. IntroDUCtIon

Over the past infrastructure developmentand North Africa (MENA) region environment to lag behind other data. With amarkets 30 years, the Middle East has seemed developing even with strong and an improved socioeconomic relative to historical popula-

tion of 381 million1 and a developing economy, this region has much potential and could be quite promising to the likes of private investors, whether it be wealthy individuals or asset management firms, or multinational corporations. Additionally, this makes the region an important thing to consider for overall US foreign policy. But before these investors and companies will feel confident enough to invest in the region, as they have in Latin America and developing Asia, they will need to feel that the prospective return on the risks that they are taking is enough to enter this market. The barriers that this region must overcome to allow for impactful innovation and growth may seem insurmountable but through political and economic reform, they are possible. And so, the United States foreign policy towards the region should be adapted to take into account these issues and factors. A policy that works to stabilize and grow this region will do more for the United States and the MENA region than the current policy. The current political unrest in the region doesn’t bring investors to the area, but progress to democratically elected governments that look out for their citizens’ interests and work on transparency and governance for local corporations as well as multinational corporations may attract more FDI. Statistics such as the Doing Business Index, Global Competitiveness Index, Real GDP growth and unemployment show that the region has made progress in the past few years but certain factors have been hampering this growth. These factors include, but aren’t limited to, lack of competitiveness in the global market, unattractive environments for starting businesses and stagnant growth due to dependency on the government. This is especially true since the same issues haven’t stalled other emerging markets as it has the MENA region. The governments of the region will require a laser-like focus on political and economic reform, and this push must be constant to attract investors and corporations. There are a few initiatives that could stimulate private investment and development to the region. First and foremost, companies and investors should ask for governance and transparency for their investments and development projects, because they need to assure that they are capable of investing in the area without having to worry about political and social risks. Another key factor which remains necessary for any developing economy is the development of capital markets. Developed capital markets will foster innovation and growth through the efficient access and utilization of funds. Lastly, the region needs to diversify out of the public sector and into more industries. This will compliment the above-mentioned initiatives in fueling innovation and growth. And all of this would lead to a more competitive MENA region.

II. hIStorICaL anaLySIS
Led by the rise in oil demand during and after World War II, the MENA region started to become a global player. The “Interventionist-Redistributive” Model came to prominence around this time.2 This was because new nations were created by the colonial powers after World War II, and the new governments’ wealth from oil allowed for them to provide for their citizens, and to an extent the governments had to as the region was in relatively poor socioeconomic shape. This model provided education, housing, health care and food subsidies utilizing state planning, nationalization of businesses, and government programs.3 Even though oil revenues were a key resource for this type of economic model, both oil exporting and non-oil exporting states were able to benefit from this, with the non-oil exporting states exporting their labor to oil exporting states. Countries that exported oil also assisted these other states with loans, grants and similar aid.4 This economic model can be tied to a rise in both pan-Arabism and nationalism. All of this led to cooperation amongst countries in the MENA region. From 1950 to 1970, the region increased its oil production from 17% of the world’s total to 41%.5 The high oil prices that lasted through the early 1980s allowed for the region to accumulate large sums of wealth.6 This wealth, in turn, allowed for much investment in infrastructure and development in the region. The public investment model grew the public sector and many citizens of the region became public employees. The public sector offered better wages, benefits and job security.7 This created an immense dependence on the government for jobs as well as the lack of innovation and competition. Farooq Mitha in his historical socioeconomic analysis of the region says, “Citizens traded restrictions on political participation and transparency for economic stability and state run programs, which provided social services and welfare. The vast amounts of oil revenues also permitted the creation of powerful security oriented institutions and high levels of military spending to protect the authoritarian governments from the public activism.”8 Effectively, the citizens gave up civil liberties for financial stability. This trade-off has fallen apart, as can be inferred from the unrest and uprisings in the region today. Citizens of countries that have oppressive regimes and/or haven’t been provided with the welfare and financial stability they were expecting have realized that this trade-off either isn’t working or the government simply isn’t giving them what they expected. 2

The decline in oil prices led to a decrease of income for migrant workers from non-oil exporting countries and coincided with increased international competition, which together hampered the growth that the region had experienced prior to the 1980s.9 Along with the decline in oil revenue, the domestic policies of the region hindered private investment and FDI and prevented the economies of this region from integrating into the global market.10 All of this caused an economic slowdown, which caused public debt to skyrocket due to the public sector composing a vast majority of the economy. This led countries to look into economic reforms to stabilize the region and consider new economic models to allow their economies to be less dependent on the state as well as more resilient in the face of recessions and other economic shocks. However, some of the outcomes of the Redistributive-Interventionist model and the attempts at reform that followed could have been beneficial to the people of the region in the prospects for growth and development. The high government spending in education allowed for there to be a relatively well-educated work force, but since most of these well-educated people took public sector positions, the drive for innovation and competiveness didn’t exist. Additionally, there was a lot of capital invested in infrastructure throughout the economic boom; some of which remains functional while some is in need of repair or upgrade.11 The basic groundwork has been laid, but the countries in the region will need to step up diversification and development of legal and political institutions to build stronger economic conditions off of this base.

III. Current Situation
The situation in the MENA region has changed significantly since the end of World War II, and the outlook seems promising, but many factors may challenge this growth. These include the current unrest in the region and the rise in oil and food prices. The MENA region as a whole has a relatively well-educated workforce that is capable of competing in the global economy, and in utilizing innovation and technology in many of its industries as well as in the public sector.12 Yet there are still areas requiring improvement. These improvements and reforms include: developing more efficient capital markets, creating resilient economies and societies, increasing innovation in the region, and, increasing use of technology to create efficiencies and lower costs. Prior to the financial crisis in 2008, the region reduced its unemployment rate by roughly 1% annually.13 Since 2009 the unemployment rate has remained steady at 10.3%.14 As previously stated, there is little job creation and heavy public sector employment. This inherently leads to low labor force participation due to limited job prospects and poor incentives for changing the status quo. This can be seen using the employment-to-population ratios, which was 45.4% in 2010, meaning roughly half the population was not working compared to the global average employment-to-population ratio of roughly 60%.15 Apart from the above reasons, this low labor force participation also has to do with the gender gap in employment. The employment-to-population ratio broken down by gender shows a 47.2% difference between male and female rates.16 This is an 8.7% improvement since the 1990s, but still shows the male dominant culture of much of this region.17 Low labor force participation is especially hard on the youth in the region. The unemployment rate for youth in the region is roughly 25%.18 The region will have to implement reforms that will allow for increased labor force participation by both the youth and women. This will require, among other things, a diversification and privatization of industries as well as a change in the mindsets of conservatives in society, embodied by such things as limiting women from participating in the workforce. Implementing a change in the mindset of citizens isn’t the job of the government, but the government can work to push for the youth and women to acquire skills and jobs and provide the tools to do so. Additionally, a change in culture can only come from within the society, which is taking place through the Internet, social media, and a better-connected world. A good example of this is the current upheaval in the MENA region that was organized and fueled through social-networking sites such as Facebook. These resources and the connectivity to other individuals in the country/region were not available even 10 years ago.i Another pair of statistics to consider is the percentage change in output in the region as well as real GDP growth over the course of the past few years. Using these two statistics we can compare the MENA region to other emerging markets and the global average. When compared to the rest of the world, the MENA region seems to be increasing output year over year at an increasing rate. Comparing how the MENA region performs relative to the emerging and developing economies allows for greater insight. In this case the MENA region lagged the overall average of emerging and developing economies in every year except for 2003.20 For the MENA region to grow it needs to increase its productive output in terms of quantity and variety, this will increase the number of revenue streams and therein improve global prominence and hedge against the risk from over-concentration in a few industries. And so, it is important to grow, and in turn, create jobs in the private sector since the public sector doesn’t have the same capacity to grow and/or the ability to be competitive in the global marketplace. MENA real GDP growth over the years has improved but still lags behind developing Asia, which is the leader amongst emerging and developing regions.21 Additionally the MENA region hasn’t returned to pre-financial crisis levels. The emerging and developing economies overall have been said to be much more resilient than the developed economies, in regards to responding to the global
i. See Annex A for complete breakdown.


market slowdown caused by the financial crisis in 2008. In 2009, the MENA region lagged behind developing Asia by 4.9%, but surpassed Latin America & the Caribbean by 3.7%.22 Latin America & the Caribbean had negative growth in 2009, of -1.7%.23 But in 2010 the MENA region, at 4.1%, lagged both developing Asia and Latin America & the Caribbean by 5.3% and 1.6%, respectively.24 This is especially interesting, as the MENA region had out-grown Latin America & the Caribbean region prior to the financial crisis. And so the fact that the MENA region hasn’t bounced back as quickly after the crisis, points to flaws in its economic structure. The major flaw is a lack of resilience, which is required of a developing economy for it to continue to grow and become a more advanced economy, through economic cycles. This lack of resilience is caused by lack of diversification/privatization of industries, innovation, and new technologies and the persistence of high unemployment.ii The above indicators are seen as more conventional measures of economies. The Global Competitiveness Index, the Doing Business report, and the Human Development Index allow for a more qualitative analysis, still using quantitative data. They also assist in understanding how development is progressing. These indicators also show where economies and countries are performing well and where they are lagging. The Global Competitiveness Index model “rests on the belief that the determinants of competitiveness are numerous and interact with each other in a complex manner.”26 There are 12 categoriesiii that make up these determinants. These are: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication and innovation.27 Additionally, countries are grouped into three different groups, each reflecting different levels of growth. The three are: factor-driven stage, efficiency-drive stage and innovative-driven stage.28 The 12 categories are then allocated to the three groups based upon recommended conditions for economic growth in that group. For example, the institutions, infrastructure, macroeconomic environment, health and primary education categories are considered “basic requirements” for the factor-driven economies.29 Algeria, Egypt, Kuwait, Libya, Morocco, Qatar, Saudi Arabia and Syria are placed in transition between factor-driven and efficiency driven. This means their factors of success in being competitive should be focused 40% to 60% on basic requirements and 35% to 50% on efficiency enhancers.30 Jordan, Lebanon and Tunisia are placed in the efficiency-driven stage, which means that 40% should be focused on basic requirements and 50% efficiency enhancers.31 Bahrain and Oman are stated as being in transition between efficiencydriven and innovation-driven; they need to focus between 20% and 40% on basic requirements, 50% on efficiency enhancers and 10% to 30% on innovative factors.32 The United Arab Emirates is considered an innovation-driven economy, along with the United States, Germany, and other developed economies. The UAE should focus 20% on basic requirements, 50% on efficiency enhancers and 30% on innovation factors.33 What these data classifications show is that none of the countries in the Middle East are considered solely factor-driven economies.iv This means that the countries are well above basic economies and are in the process of developing their economies to be competitive in the global marketplace. Of the stated 12 categories, the categories most hampering the Arab countries’ competitiveness are the institutions, labor market efficiency, financial market development, technological readiness and innovation. Some countries, such as the UAE have done a good job of bringing multinational corporations to their countries to stimulate innovation and improve technological readiness; other countries should attempt to follow this. The best way for other countries in the region to do this is to improve their performance in the categories where the UAE improved. In general, this would include systematic development and investments in infrastructure as well as improving the legal framework to create an environment for growth. Lastly, this is an analysis of the region as a whole, and so certain countries may be lagging or excelling in specific categories.v The Doing Business report “presents quantitative indicators on business regulation and that protection of property rights that can be compared across 183 economies.”34 These are measured through the following indicators: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.35 The report says that these indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why.36 Diving into a few of these categories will allow for a deeper understanding of where the MENA region is lagging relative to other emerging economies. In the starting a business category, the region has the second highest number of procedures to start a business and average time (in days).37 The area is also the most expensive place to start a business with cost at 38% and paid in minimum capital at 104% (of income).38 The MENA region could be stopping entrepreneurs and multinationals from opening businesses there just because of the cost of starting that business. Starting and expanding businesses is a key aspect of a developing economy, because it helps drive private sector job growth and innovation. The depth of information required to get credit in the region is relatively low but the strength of legal rights is the lowest amongst all regions.39 The relaxed standards on mandatory information that needs to be provided could be seen as a good thing for businesses, but more importantly, such standards may cause increased risk. These relaxed standards could lead to default, because borrowers may not be as extensively checked prior to lending and their ability to pay back the loans
ii. See Annex A for complete breakdown. iii. See Annex B for complete breakdown. iv. There is no similar data for North Africa. v. See Annex A for complete breakdown.


could be hampered by excessive risk-taking, by both lender and borrower, or the inability of the borrower to turn a profit. For example, one of the causes of the US subprime mortgage crisis was that banks were lending to individuals with no documented incomes or documentation of any sorts for that matter. And this inherently caused many borrowers to default on their loans. Additionally, the lack of legal rights in accessing credit isn’t good for most businesses attempting to start up in the area, as loans are usually required to start or expand a business, and companies may be hesitant to borrow in places where they aren’t entirely protected. In trading across borders, the region’s numbers are competitive with all of the emerging markets when it comes to exports and imports. But an important note to touch on here is that the region’s countries should work to grow the amount of intraregional trade. This would be extremely helpful to the regional economy as a whole, and allow for collaboration and innovation, which would be extremely helpful in growing the economy and the private sector. Innovation is more plausible when many individuals are working on things independently of one another and then come together. Many companies have set up websites and programs where inventors and thought leaders in a specific industry can come together to solve a problem that company may be having. Returning to the issue of legal complications, enforcing contracts in the MENA region is essentially on par with most other emerging economies,40 but this is an area where the region can work to differentiate itself. As stated earlier, the recovery from the financial crisis in 2008 has gained traction much quicker for emerging economies, drastically increasing the amount of investments in these emerging economies in 2009 and 2010. But the MENA region has not experienced this trend to the extent of other developing markets.41 In protecting investors, the MENA region is the lowest in ease of shareholder suits and tied for last with Latin America in strength of investor protection.42 This is one of the biggest institutional factors that keep investors from making investments in a region that is considered to have immense potential. And this is one of the key areas the region’s governments should be working to improve, especially since the region has been plagued by private wealth net outflows for many years.43 This net outflow implies that the investors in the region would rather invest in other parts of the globe than in their home countries and region. Additionally, institutional improvements in protecting investors and enforcing contracts would make the region a much more appealing investment as the region is around average in most other categories. This makes differentiation in institutional efficiency a key driver of growth relative to other developing markets. And so, the Doing Business report shows that the MENA region needs to work on differentiating itself through the development of legal institutions that protect businesses and The Human Development Index (human centered development) works like the GNP but takes into account all the different factors impacting the GNP value.44 The report is a composite measure of health, education and income.45 It assesses the levels and progress using a concept of development much broader than that allowed by income alone. The Human Development index is made up of three dimensions which are broken down into four indicators. The three dimensions are healthy, education and living standards. And the four indicators are life expectancy at birth (flows into health), mean years of school and expected years of schooling (flows into education), and gross national income per capita (flows into living standards).46 The Human Development Report breaks down the HDI statistics into the four indicators as well as calculating a hybrid HDI.vii The Arab States’ “Hybrid HDI” at 0.66 is above that of the average developing countries value, but below almost all economies when they are broken down per region.47 Of the four indicators, the Arab States lag in literacy in 2010, but have made immense improvements when looking at change (in percent) from 1970 to 2010 and 1990 to 2010.48 The Arab States gross enrolment is slightly below the developing economies average and improvement would allow for a higher valued workforce into the future.49 All in all the Arab States are well positioned to compete with other developing countries but there is much room for improvement. One important area that the HDR says all of the emerging economies are dealing with is income inequality. And a widening gap between the upper and lower class, as well as the shrinking of the middle class, may lead to instability, if it already hasn’t. The HDR goes on to say that health and education improvement aren’t necessarily correlated to growth in income.50 Nonetheless, for job growth and private sector development and investment, health and education improvement are helpful.

IV. Policy Implications
The discussion and data analysis above suggest that the United States could make much progress in developing solid relationships with governments and citizens in the MENA region through a different policy approach. This would be a policy approach based on supporting sustainable economic development. As we have seen, there are many binding constraints in the region that require indepth analysis and understanding before they can be acted upon. In addition to this, the region has a very different culture from that of the United States and so it’s important for policy makers to spend time understanding this culture to develop the best possible solutions. While this may seem obvious, it seems to be a major issue that isn’t being addressed in the region. This can be seen from the issues of transition in Iraq and Afghanistan. The Obama Administration has been following a policy of promoting democracy in the region. Similar to that of Bush, but different in the way that it has been presented. In Obama’s 2009 speech in Cairo he said, “No system or government can or should be imvi. See Annex A for complete breakdown. vii. See Annex B for complete breakdown.


posed by one nation upon any other.”51 In the context of the speech, he was saying that the US is pushing for democracy but will not impose it on any government. While the administration is attempting to not impose anything on other governments, it’s still pushing for democracy. This is a poor approach as the rhetoric of the speech and the actions of the administration are quite different. Additionally, President Bush’s declaration of the three pillars of American foreign policy: defense, diplomacy and development, imply the use of military-led development, which has been relatively ineffective in the MENA region. Any development or aid that directly involves the military being on the ground in a certain country will cause some conflict or dislike between the locals and soldiers, as these are foreign military personnel. Finally, past administrations have been inconsistent in their policy stance towards the MENA region, partially because of different stances, but additionally to specific countries for strategic purposes. For example, the US has supported the Al Saud family, ruling family of Saudi Arabia. The Saudi government is an Islamic absolute monarchy, but regardless the United States works with this government. Presently, the US foreign policy creates and doesn’t address many constraints that are hampering MENA region growth and the development of US relations in the region. There are clear trends that emerge and we can identify numerous binding constraints on the region’s economies that hamper growth and impact US foreign policy. The constraints can be broken up between political and societal constraints, and economic ones. Within the political and societal constraints the major areas are: oppressive governments and societies, the role that religion plays in society and politics, and general instability in the region. The economic constraints are: the dependency on the public sector, a lack of private sector growth and development, income inequality and poverty, and private wealth net cash outflows. An additional constraint that falls under both categories is the lack of legal security and institutions in the region, which arises from socio-political and economic conditions and also leads to adverse outcomes in those areas. These constraints hamper growth and development in the region as well as create an environment that is tough to navigate from a policy perspective. The sensitive nature of the United States’ relationship with the region also makes it challenging to push any particular policy as people of the region may see it as being forced upon them. The aforementioned political constraints have numerous implications on the region’s development. The United States has been focusing on partnering with countries for strategic reasons, which is necessary, but it is also important that the US partner and ally itself with governments and regimes that aren’t oppressive and/or not working in the best interests of its citizens, because it would seem to be more inline with American philosophy to support governments that provide their citizens with civil liberties. Additionally, if the US aligns itself with oppressive regimes now and there is regime change further down the road, this could be detrimental to sentiment towards the US by those citizens. This can especially be seen now with the political unrest in the region. Along with this, the United States intervening directly in the region doesn’t help as much as giving the region the tools it needs. The trouble the US is having in Iraq and Afghanistan with their development is proof of this. The conventional policies being applied in both countries through strategic interventions neither stimulate the economy nor stabilize the region. The US needs to work to help create longterm stability and strong partnerships by showing the region what may help and letting people of the region do it. Among the economic constraints is the issue of underutilization of infrastructure. As evidenced earlier, the region invested a lot into developing infrastructure during a period of high oil profits, but the return on this investment has been hampered by unrest and such factors as high unemployment and public sector dependence. Additionally, the region doesn’t utilize its infrastructure to innovate and collaborate on projects and ideas through interregional initiatives and trade. Effectively, the physical groundwork has been laid out but people and governments aren’t using it to grow or expand. All of this leads to a less competitive MENA region relative to other emerging economies, evidenced, in part, by the Competitive Index. After considering these constraints, where the MENA region may be able to differentiate itself by building and providing legal institutions that protect investors and inventors. Innovation and trust, two key drivers of economic and productivity growth, are thusly discouraged by the failure to adequately protect patent rights and investor contracts. Copyright infringement is a big issue in many developing economies, such as Developing Asia.52 This doesn’t necessarily decrease innovation, but it diminishes the drive and motive to innovate by punishing those who invest in research and development by diffusing the profit. Stricter laws and an efficient legal system will create an environment to innovate as well as draw multinational corporations to the region. In addition to this, another area where the MENA region is lacking is in income inequality. There is a huge gap between the rich and the poor, and this creates unrest, which can lead to political instability.53 This is another important area that the region can improve, through creating jobs that would be for the middle class, and through creating/adjusting legislation and laws to be beneficial classes. All of this would help the region grow and prosper, while making it more competitive. From a policy perspective, the US needs to offer the tools and guidance to the MENA region and be less involved in the physical work. The US needs to work to align itself with helping the societies of these countries, and not necessarily the governments. And along with this, the United States needs to work with governments in the region to improve political and economic institutions and policy to help their citizens by growing the economy and creating jobs, specifically in the private sector. Specific economic reforms should be the creation of jobs through the development of the private sector, and decrease in public sector dominance. This can be done by taking steps to attract multinational corporations. These steps would include improving legal institutions and rights, implementing new technologies and creating an environment of innovation. A great example of this is the United Arab Emirates, which has taken immense steps in opening their doors to multinational corporations and creating jobs for their citizens. This along with further developing the capital markets by having stricter lending policies and legal protection for investors, which would bring 6

in more capital, will help fix the economic constraints currently in the reasons. As for reforms, to policy, to address the political and social constraints, the US should work to improve the legal system for citizens, which can be a first step in greater civil liberties for citizens, especially in the more oppressive countries. The overall US foreign policy should have less political reforms and more economical/social reforms, because political reform hasn’t worked well in the past, partially because governments and citizens don’t want to be told how to run their countries. The above reforms should be the basis of the US foreign policy towards the MENA region. This guidance and aid would include: assisting in implementations of new technologies, pushing for institutions to help incubate and foster growth and innovation, stronger legal institutions and pushing for the public sector to play a smaller role in the overall economy. The US needs to work to solve problems in the region, while not imposing on the governments and people of the region. The development and growth of the region should be organic and untouched by outsiders, as this is the best way to sustain growth and create a stable society A more competitive MENA region, would allow for a more competitive global marketplace, which in turn leads to higher amounts of collaboration and innovation. All of which are positive externalities to the MENA region as well as the entire world. The path to democracy is a gradual process that each country needs to go through on its own. There are no fast lanes to a stable democracy, and so the US should work to help lay the groundwork for this.

1. CIA World Factbook 2. Aysan, Ahmet. How to Boost Private Investment in the MENA Countries: The Role of Economic Reforms. 2002. 3. Ibid 4. Ibid 5. Ibid 6. Ibid 7. Ibid 8. Mitha, Farooq A. Economic Reform in the Middle East and North Africa (MENA). 2007. 9. Ibid 10. Aysan, 2002. 11. Noumba Um, Paul. Infrastructure and Economic Growth in the Middle East. 2009. 12. Hanouz, Margareta Drzeniek. The Arab World Competitiveness Review 2010. 2010. 13. Kapsos, Steven. The Global Employment Trends 2011 : The challenege of jobs recovery. 2011. 14. Ibid 15. Ibid 16. Ibid 17. Ibid 18. Ibid 19. International Monetary Fund. World Economic Outlook 2010: Recovery, Risk and Rebalancing. 2010. 20. Ibid 21. Ibid 22. Ibid 23. Ibid 24. Ibid 25. Ibid 26. Hanouz, 2010. 27. Ibid 28. Ibid 29. Ibid 30. Ibid 31. Ibid 32. Ibid 33. Ibid 34. The World Bank and the International Finance Corporation. Doing Business 2011: Middle East and North Africa, Making a Difference for Entrepreneurs. 2011. 35. Ibid 36. Ibid 37. Ibid 38. Ibid 39. Ibid 40. Ibid 41. Elliott, Dominic. Rise of Emerging Markets Triggers Alarm. Wall Street Journal. 2009. 42. The World Bank and the International Finance Corporation, 2011. 43. Hanouz, 2010. 44. Klugman, Jeni. Human Development Report 2010, The Real Wealth of Nations: Pathway to Human Development. 2010. 45. Ibid 46. Ibid 47. Ibid 48. Ibid 49. Ibid 50. Ibid 51. Obama, Barrack. Cairo Speech Transcript. New York Times. 2009 52. The World Bank and the International Finance Corporation, 2011. 53. Klugman, 2010.



Annex A: Employment/Labor Statistics...........................................................................................8 Annex B: Global Competitiveness Index.........................................................................................13 Annex C: Doing Business Indicies.......................................................................................................14 Annex D: Human Development Index................................................................................................20

A1. Unemployment, All

A2. Annual Employment Growth


A3. Unemployment, Male

A4. Unemployment, Female

A5. Unemployment, Youth


A6. Labor Force Participation, All

A7. Labor Force Participation, Male

A8. Labor Force Participation, Female


A9. Labor Force Participation, Youth

A10. Labor Force Participation, Adults

A11. Employment-to-Population Ratio, All


A12. Employment-to-Population Ratio, Male

A13. Employment-to-Population Ratio, Female

A14. Real GDP growth


annex B (Global Competitiveness Index)


] annex C (Doing Business Index)
C1. Doing Business MENA Aggregate Ranking

C2. Starting a Business


C3. Dealing with Construction Permits

C4. Registering Property


C5. Getting Credit

C6. Protecting Investors


C7. Paying Taxes

C8. Trading Across Borders (Export)


C9. Trading Across Borders (Import)

C10. Enforcing Contracts


C11. Closing a Business


Index D (human Development Index)
D1. Components of the Human Development Index

D2. Trends in the HDI, Since the 1970s


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