By Andy Sambidge
New report says private sector must lead way in creating estimated 40m jobs by 2019.
The private sector in the MENA region must do more to create an estimated 40 million new jobs needed by 2019, the latest World Bank report has said.
Private investment in the region had increased by a modest 2 percent of GDP, compared to 5-10 percent in Asia, Eastern Europe and Latin America, the report added.
“The limited impact of reforms in MENA is due to the unequal and unpredictable way in which policies are implemented, resulting in a lack of reform credibility in the eyes of many investors,” the report, cited by UAE daily Gulf News, said.
The report also show that policy uncertainty, unfair competition and corruption appeared as major concerns for investors.
The report, called Privilege to Competition: Unlocking Private-Led Growth in the Middle East and North Africa, calls for creating a level playing field in the region.
According to the World Bank, unleashing the entrepreneurship potential of the region will require moving from deeply rooted privileges to a level playing field for all investors.
“MENA is a region endowed with considerable human capital, creativity and resources, and its growth potential is immense. Meeting that potential will require a credible commitment to reduce discretion and ensure a more equal enforcement of the rules, so that more entrepreneurs can invest and create jobs.” Shamshad Akhtar, World Bank Vice President for MENA told the paper.
The report added: “An estimated 40 million jobs need to be created over the coming decade. These jobs will have to come from the private sector."
The World Bank report calls on governments to remove formal and informal barriers to competition. It also said policy reforms must be supported by strengthening the institutions that regulate markets and interact with firms, in order to reduce interference and discretion in the enforcement of rules and regulations.
The report added that the region must foster a new partnership between the private and the public sectors.