Economic growth in the region is projected to remain at 2.9 percent in 2016, with lower-than-average growth in the GCC (2.2 percent) countries and in Lebanon, Morocco, and Tunisia (1.8 percent), and higher-than-average growth in the region’s developing countries (4.4 percent). Growth in 2017 is projected to rise to 4.2 percent, assuming in large part that oil production increases in Libya and the Islamic Republic of Iran. Less than 3 percent of the population live in extreme poverty, but vulnerability is high because 53 percent of the population live on $4.00 a day or less.
World Bank assistance
The World Bank approved $5.2 billion for the region for 15 projects this fiscal year, including $5.2 billion in IBRD loans and $31 million in IDA commitments. It also committed $53 million in special financing for five projects in the West Bank and Gaza.
The Bank delivered 187 analytical and advisory services in fiscal 2016. It partnered with the UN High Commissioner for Refugees (UNHCR) on a path-breaking report entitled The Welfare of Syrian Refugees: Evidence from Jordan and Lebanon, which includes evidence-based policy recommendations. Another report the Bank published, entitled Trust, Voice, and Incentives: Learning from Local Success Stories in Service Delivery in the Middle East and North Africa, examines the roles of incentives, trust, and engagement that suggest ways governments can increase accountability, policy implementation, and service delivery. The Bank provided more than $30 million in Reimbursable Advisory Services to GCC governments, with a focus on education, governance, economic diversification, and small and medium enterprises.
This fiscal year the Bank announced a new regional strategy that puts the promotion of peace and social stability at its center. The strategy’s four pillars focus on forging a new social contract in order to create more-inclusive and more-accountable governance structures and private sector–driven economies; increasing regional cooperation; building resilience, which includes the challenges of forcibly displaced people; and supporting economic recovery and reconstruction.
Renewing the social contract
The World Bank can play a role in helping countries in the region to renew the social contract in at least three areas—jobs, quality services, and citizen engagement—to contribute to peace and stability in the short term and economic growth in the long term. To promote trust in government institutions and processes, the Bank approved a $1.2 billion loan for Iraq to help it stabilize the fiscal situation and focus on governance reforms. It approved a $1 billion loan to Egypt to improve its fiscal balances and support reforms in energy subsidies. A $500 million loan to Tunisia will allow the government to focus on governance and reforms that will help create jobs. A $200 million loan to Morocco will help strengthen transparency and accountability.
Increasing regional cooperation
Beyond economic benefits, the potential gains from increased integration in areas such as energy, water, and education can serve to build regional cooperation and trust. A $250 million loan to Jordan will significantly enhance its energy security by diversifying its energy imports and building ties to neighboring exporters. A $200 million road transport loan to Tunisia will enhance links to both its own lagging regions and its neighbors.
Building resilience to forced displacement
Building resilience to forced displacement means promoting the welfare of forcibly displaced people and the host communities throughout the region. Support from the World Bank includes a $350 million program for Iraq that will help to rebuild seven cities and towns that have been liberated from Islamic State of Iraq and Syria (ISIS), and will help to resettle their returning populations (see project details in the box). A $20 million IDA grant to Djibouti will support its efforts on behalf of forcibly displaced people there. A $12.3 million loan will expand the coverage and enhance the social assistance package extended to people in Lebanon affected by the Syrian crisis and assist all vulnerable Lebanese households.
Supporting economic recovery and reconstruction
Providing assistance to recover and restore economies affected by conflict and instability is at the core of the Bank’s mission and assistance in the region. Buffeted by bouts of instability, often linked to unemployed youth, Tunisia is seeking to strengthen the employability of higher education graduates, whose rates of unemployment are the highest in the country. The Bank’s $70 million loan will assist the government in its efforts to do so. Similarly, $5 million in financing to the West Bank and Gaza will support job creation in the private sector.
Further Information: World Bank's Middle East and North Africa Region homepage »