After almost a year of crisis, Yemen has embarked on a political transition based on an agreement brokered by the Gulf Cooperation Council (GCC) in November 2011. Yemen started a 565-member National Dialogue process in March 2013, which concluded in January 2014 with the decision to transform Yemen into a Federal State.
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WASHINGTON, October 12, 2014 – The World Bank Group and th... Show More +e Islamic Development Bank announced an agreement today to coordinate efforts on education as one of the most powerful instruments for reducing poverty and inequality and for laying the foundation for sustained economic growth. The initiative is aimed at developing joint strategies for improving education and training systems in member countries of both organizations, with a primary focus on the Middle East and North Africa region.“The Arab world has made impressive gains in ensuring access to education, but we know from the high levels of youth unemployment that urgent work is needed on the quality of learning,” said Jim Yong Kim, World Bank Group President. “Our goal is to draw on the complementary strengths of both organizations to develop strategies for the entire path from school to work, to make sure young people not only have the right skills for the labor market, but that they can become the engines of growth.The Education for Competitiveness initiative was signed by World Bank Group President, Jim Yong Kim and his counterpart at the Islamic Development Bank Group, President Ahmad Mohamed Ali Al-Madani. The initiative will consolidate and build on collaborations already underway on research to boost the employability of Arab youth and in support of regional efforts to improve the quality of education. The Education for Competitiveness initiative will focus the full range of both organization’s resources and expertise on the entire educational spectrum from early childhood development through to higher education and jobs training. The initiative is motivated by the conviction that human development is essential for sustainable growth, and that it requires a sequenced combination of education, training, and labor market activities."The critical importance and far-reaching implications of addressing the education-employment nexus across the region cannot be overstated,” said Ahmad Mohamed Ali Al-Madani, President of the Islamic Development Bank Group. “Our two institutions fully understand the daunting job creation challenge facing our common member countries, which is why we have decided to join forces in our quest for innovative and effective solutions under the overarching theme of education for competitiveness".Each organization has identified a dedicated team that will form part of a joint working group. The initiative will organize all activities around three main pillars. The first, Education for Lifelong Learning, will focus on the quality of learning in levels K through 12, with an emphasis on promoting critical thinking and problem solving. This pillar will include support for policy reform, better governance of institutions and teacher training. The second, Education for Employment, will build on ongoing work on the relevance of education to labor market demand, with support for skills development for young people and women, training to encourage entrepreneurship and innovation, vocational education and job matching systems. The third pillar, Learning for a Competitive Economy, is aimed at building human capacity in areas where comparative advantages exist to strengthen the ability of national economies to adapt to changing global market conditions. “We estimate that the school age population will surge to about 10 million over the next 15 years,” said Inger Andersen, World Bank Regional Vice President for the Middle East and North Africa. “This represents a tremendous opportunity for the region, but effective educational systems will be essential in allowing this vast human resource to reach its full potential.”The Education for Competiveness initiative is also intended to attract other international organizations and donors with similar goals, to increase the impact of development projects focused on training and education by broadening coordination and pooling resources, and avoiding the duplication of efforts. Show Less -
WASHINGTON, October 10, 2014 – The Middle East and North Africa (MENA) region has long struggled to generate enough quality jobs for its large and increasingly educated workforce, but this c... Show More +an be turned around. Governments can make significant strides in job creation by reforming policies used to protect politically connected companies, which would in turn promote competition, and ensure equal opportunities for all firms, according to a new regional World Bank study.Jobs or Privileges: Unleashing the Employment Potential of the Middle East and North Africa, launched today highlights the central role of promoting competition to stimulate private sector growth. It establishes that young and productive firms generate employment in the region’s economies. Policies to protect privileged insiders, however, have constrained competition, and stifled the growth and productivity of these firms.“The employment challenges of the MENA region are inextricably linked to its economic governance challenges,” said Inger Andersen, World Bank Regional Vice President for the Middle East and North Africa. “The economies of the region will need to be more open and provide a level playing field for job creation to increase and meet the needs of citizens.”The report offers a comprehensive analysis of the harm to competition caused by privileges to politically connected firms. In Egypt, employment growth declines by about 1.4 percent annually when connected firms enter new, previously competitive sectors. According to the report, 71percent of connected firms in Egypt, compared to only 4 percent of all firms, sell products that are protected by at least three technical import barriers. In Tunisia, 64 percent of politically connected firms operate in sectors subject to restrictions on Foreign Direct Investment relative to only 36 percent of non-connected firms.“Start-ups and innovative firms are the engines of job creation in MENA but they are having trouble growing,” said Marc Schiffbauer, World Bank Senior Economist and lead author of the report. “These firms currently face a host of obstacles in the business environment that are too often there because they benefit a few politically connected firms”.The report draws on newly available economic data to identify the patterns of privilege to connected firms, their distortive effects on policies and detrimental impact on job creation. In assembling the most comprehensive firm census database ever put together for the region, the report also contrasts the impact of industrial policy as practiced in MENA countries with the more successful experience of a number of East Asian countries.The report highlights a number of economic policy reforms across the region such as reducing the scope of privilege which will require a strong public administration, hired on the basis of merit, to implement the policy changes and build open markets that are resilient to the risk of capture. The report recommends that these reforms be implemented in a transparent and open policymaking environment that keeps citizens aware of government action and allows them to provide inputs into policy. Show Less -
Across the Middle East and North Africa, countries are being forced to face up to a harsh reality—that, left as they are now, their economies won’t create anything like enough jobs for the hundreds of... Show More + thousands of people entering their job markets each year. Popular discontent will continue alongside widespread economic inactivity. What can they do to change this?Official data, made available only since the Arab Spring in 2011, has given World Bank researchers the opportunity to compare the region’s job performance and the policies that shape them, and examine what’s going wrong. Their conclusions are contained in a new report, Jobs or Privileges: Unleashing the Employment Potential of the Middle East and North Africa.The “privileges” referred to in the report are the many old policies that continue to protect the business interests of entrenched elites. The report shows the extent to which these policies—designed to prevent or deter competitors while allowing elites to make easy money or “to earn rents”—distort the natural workings of economies in which businesses either grow and become more productive, or exit the market. In this environment, political connections are more important for success than innovative spirit.The newly available census data unearthed for the report reveals how firms linked to former regimes in Tunisia and Egypt were given undue privileges, or business advantages: in Egypt, for example, 71 percent of politically connected but only 4 percent of unconnected firms sell products protected by at least three import barriers; while in Tunisia, 64 percent of connected firms but only 36 percent of non-connected firms operate in sectors in which Foreign Direct Investment is restricted.Privileged insiders also have outsized influence over such sectors: one of the best-known cases is that of the American fast food giant, McDonalds, which never managed to enter the Tunisian market because it rejected an exclusive offer from a franchisee with ties to the regime of the country’s former leader, Ben Ali.Privileges like this put local entrepreneurs without political connections at a disadvantage, stunting domestic investment. Uncertainty over which economic policies a government might adopt—and whether they will be implemented evenly—deters foreign investors. Show Less -
This report argues that Middle East and North Africa (MENA) countries face a critical choice in their quest for higher private sector growth and more jobs: promote competition, equal opportunities for... Show More + all entrepreneurs and dismantle existing privileges to specific firms or risk perpetuating the current equilibrium of low job creation. The report shows that policies which lower competition in MENA also constrain private sector development and job creation.The report is organized in four chapters as follows (PDF):Chapter one analyzes the dynamics and determinants of job creation and tests whether the fundamentals of job creation in MENA are similar to those in fast growing developing and high income countries.Chapter two shows how different policies in MENA countries shaped private sector competition and thus the firm dynamics associated with job growth identified in chapter one.Chapter three documents past industrial policies in MENA and compare the experiences in MENA with the experiences of East Asian countries, highlighting how the differences are linked to policy objective, design, and implementation.Chapter four analyzes how privileges to politically connected firms result in policy distortions that undermine competition and constrain private sector growth and jobs in MENA.The report concludes by laying out the implications for policy of the various findings and lays out the specific areas for policy reform to the roadmap for more private sector growth and jobs in MENA.Briefs (PDF)Unleashing the employment potential of the Middle East and North AfricaStartups and Innovative Firms Wanted : Private Sector Growth and Job CreationDistorted Dynamics: The Impact of Policies on Firm Dynamics and Job CreationAvoiding Pitfalls of Industrial Policy: Building Open and Effective Institutions for Private Sector Development and JobsPrivileges instead of Jobs: Politically connected firms receive generous policy privileges undermining completion and job creation Show Less -
First issue: October 2014 l Corrosive SubsidiesThe report projects regional growth to average 4.2 percent in 2015, slightly more favorable than the 2013-2014 figures. Economic growth ... Show More +could reach 5.2 percent depending on domestic consumption, easing political tensions crowding-in investments in Egypt and Tunisia, and full resumption of oil production in Libya. Show Less -
NEW YORK, September 24, 2014 – The eighth ministerial level meeting of the ‘Friends of Yemen’ welcomed the recent Peace and National Partnership Agreement that averted a civil war in Yemen, and called... Show More + for a renewed commitment to compromise and dialogue to ensure the success of the political and economic transition. Further progress on reforms was urged to give all Yemenis a stake in the country’s future, along with measures to address the needs of the most vulnerable population, while donors were reminded of the necessity of fulfilling their pledges of support at this critical junctureMeeting three days after the signing of the peace agreement that ended a recent escalation of hostilities, the conference gathered more than 50 representatives of governments and international organizations. Discussions focused on the formation of the new government in Yemen, as stipulated by the agreement, and the challenge ahead to build and maintain a stable environment for the transition“The new government should take immediate steps to show they are serious about transparency, improving services to citizens and tackling corruption,” said Inger Andersen, Regional Vice President for the Middle East and North Africa, who represented the World Bank Group at the conference. “This will send a signal to the people of Yemen that their priorities are in line with demands for a more just and accountable government, and to donors that their support is yielding results.Yemen embarked on a political transition at the end of 2011, following an agreement brokered by the Gulf Cooperation Council that ended a year-long political crisis. With more than half the population living below the poverty line, the country has a humanitarian emergency to cope with in addition to managing a transition. A National Dialogue was organized to bring together the full cross section of society to achieve consensus on the country’s future, while ambitious reforms were launched to improve the management of the national budget and expand social nets. Stability will be critical for implementing the outcomes of the National Dialogue and further progress on economic reforms“There is no time to lose on economic reforms, as they are the route to freeing up the funds that can be directed to the poorest that need them most,” added Inger Andersen, ”this will give Yemenis one of the critical ingredients for stability – hope for a better tomorrow.The World Bank has approved US$498 million in new grants since the start of the 2011 transition, and currently has a portfolio of projects in Yemen totaling about US$1 billion focused on increasing access to basic social services, improving infrastructure, and enhancing governance and institutions. Show Less -