Overview

  • The outlook for growth in MENA has been lowered to 0.6% in 2019. Voluntary cuts to oil production are responsible for this downward revision from 1.5% in April, as well as intensifying global economic headwinds and the marked shrinkage of Iran’s economy because of rising geopolitical tensions.

    Conflict continues in Yemen and Libya, and in Syria as well. In recent years, this has contributed to an increase in the region’s extreme poverty rate, which nearly doubled to 5% in 2015 from 2.7% in 2011. Even in countries with higher growth, such as Djibouti and Egypt, poverty has failed to decline significantly, suggesting a need for reforms to bring about social inclusion.

    With strong reforms on the fiscal and energy fronts, Egypt will post a growth rate of 5.5% in 2019, and there are other positive signs: Iraq’s recovery and reconstruction efforts are moving forward, although slowly, which has resulted in recent social unrest. Jordan and Lebanon, still bearing the cost of millions of Syrian refugees, are preparing to embark on domestic economic reforms, though challenges remain. In Tunisia, elections may have slowed the reform agenda, but they have also stimulated debate around it. Morocco remains stable, though with slow growth. Djibouti’s 7% growth rate for 2019 is the region’s fastest but has had little impact on the country’s high level of poverty. Growth in the Gulf Cooperation Council remains around 2.0%, with reforms in many countries, most notably Saudi Arabia. 

    Despite this year’s downward trend, the region’s growth rate is expected to rise to 2.6% in 2020 and 2.9% in 2021. But with growth rates below what is needed to create more jobs for the region’s fast-growing working-age population, reforms are needed in MENA to demonopolize domestic markets and open up to regional trade to create more export-led growth.

    Last Updated: Oct 16, 2019

  • The last eight years have been challenging for the Middle East and North Africa (MENA) region. In response to the region's changing circumstances, the World Bank Group launched in 2015 a new strategy entitled - "Economic and Social Inclusion for Peace and Stability in the Middle East and North Africa: A New Strategy for the World Bank Group". This strategy, built on 4 pillars - Renewing the social contract, Regional cooperation, Resilience to refugees and migration shocks and, Reconstruction and recovery - focuses on promoting peace and stability and has produced several innovations.

    For instance, by leveraging partnerships, the Bank was able to continue working in Yemen during active conflict. IDA grants totaling $1.7 billion have been mobilized for critical life–saving services and economic opportunities for vulnerable Yemenis.  As Lebanon and Jordan faced the shock of millions of Syrian refugees, a new facility was launched to provide them with concessional financing, the first ever for middle-income countries. That facility became the Global Concessional Financing Facility (GCFF) that has so far unlocked over $2.5 billion in concessional financing. These initiatives have contributed to alleviate some of the tensions in the region.

    Although challenges remain and will continue for some time to come, a new economy is slowly emerging. To support this new economy, the World Bank Group is expanding the MENA strategy.

    Promoting stability is still critical to the World Bank Group, and we will continue to design interventions based on the four pillars. To support the region in seizing new opportunities, three new priorities have been added to the original four pillars:

    Harnessing the region's human capital - The region is far from using the full potential of its human capital. MENA countries' average Human Capital Index is at 49% which means that young people in the region can expect to be on average only half as productive as they could have been with full health and quality education. MENA countries have lined up to address these disparities: a number of pioneering countries are working with the Bank to develop action plans to improve their investments in building human capital. Reforms of education systems are essential. They should start in pre-primary education and address skills development with a focus on employability in the private sector.

    Leveraging technologies for a new digital economy - Creating an infrastructure for the development of a more sophisticated digital economy will be key to take advantage of the region's tech-savvy youth. This should be coupled with adaptable regulatory reforms to allow digital payments. With access to high speed internet and digital payments, many more people could use their mobile devices for economic growth and productive purposes. To supporti economic transformation and lay the foundations for a new digital economy, more flexible social security systems will be required.

    Developing the private sector through the Maximizing Finance for Development approach (MFD) - The World Bank Group’s Maximizing Finance for Development approach pairs development challenges with private sector solutions. This approach, pioneered in the MENA region, continues to be implemented through coordination between the Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), as in the case of Egypt's energy sector where Bank-supported policy reforms were able to unlock over $20 billion in private investments in renewable energy and gas. Meanwhile, MENA is expanding the approach to social sectors.

    By expanding its strategy, the World Bank Group seeks to help the MENA region move from stabilization to transformation, unlock its vast economic potential of youth and women and ease the constraints that hamper their creative energies.

    Last Updated: Oct 16, 2019

  • The World Bank responded to strong demand from the Middle East and North Africa Region (MENA) during the financial year that ended on June 30, 2019, with US$5.47 billion in new commitments to invest in people, expand the private sector, and set a course for digital transformation, helping the region continue on the path of stability and inclusive growth.

    Second only to the previous financial year’s record commitment of US$6.3 billion, the new commitments included US$4.87 billion from the International Bank for Reconstruction and Development, which supports development in middle-income countries, and US$596 million from the International Development Association, the Bank’s fund for the world’s poorest countries. In addition, US$67 million in new grants have been committed to the West Bank and Gaza during the past financial year.

    The World Bank’s commitments included a number of major financing programs. In Jordan, a US$1.45 billion package was launched to support the country’s plans to improve its business and investment environment and fiscal sustainability. In Egypt, a US$1 billion program was launched to help sustain the momentum of Egypt’s program of economic reform and capitalize on improvements to macroeconomic stability. This has helped launch the next generation of reforms, focused on creating opportunities for Egyptians and raising living standards by promoting the private sector and improving government performance. In Morocco, a US$700 million program was launched in support of the government’s efforts to leverage digital technologies to transform the country’s economy into a more inclusive and innovative driver of growth.

    The World Bank also provided support to countries directly and indirectly dealing with the effects of conflict in the region. In Yemen, it launched a new country engagement strategy and committed US$540 million to maintain the provision of services and support economic opportunities, bringing the Bank’s active portfolio to over US$1.7 billion. It has also continued its support to Syrian refugees and the communities hosting them in Jordan and Lebanon, through projects with the Global Concessional Financing Facility, a multi-donor vehicle that has leveraged over US$2.5 billion in multi-lateral development bank-financing to date.

    In addition, World Bank knowledge continues to make important contributions to dialogue over policy. The “Mobility of Displaced Syrians: An Economic and Social Analysis” report sheds new light on the impact of forced displacement on Syrian refugees, and the Bank has also delivered a range of analytical products to support evidence-based policies and hosted regional knowledge-sharing events to promote a coordinated approach to the region’s development challenges.

    These knowledge services included work on the region’s high-income countries through the Bank’s Reimbursable Advisory Services. The program, which reached US$56 million in the past financial year, supported efforts to diversify economies and promote private sector development. This included support to the Kingdom of Saudi Arabia ahead of its chairing of the G20 summit in 2020.

    A flagship report on transforming the region’s education systems provides a roadmap to unlock education’s potential to contribute to growth and meet the aspirations of young people. The Bank convened the first-ever digital conference in the Mashreq, at which both Jordan and Lebanon committed to deliver universal access to high-speed internet by 2021. The MENA Gender Innovation Lab was launched to promote innovative policies to address the low participation rate of women in the region’s labor markets, something that needs to be reversed for MENA to achieve higher, more sustainable, inclusive growth.

    Last Updated: Oct 16, 2019

  • In recent years, the World Bank has intensified its partnerships in support of the new World Bank Group MENA Strategy. Our partnerships are built on collaborative approaches in areas such as joint analytical work, the co-financing of projects, World Bank-managed financial platforms, and collective action in support of policy reforms in close cooperation with the recipient countries.

    Today, partnerships are stronger with bilateral and multilateral donors, regional development banks, Islamic financial institutions, and emerging donor countries. The Bank has continued its well-established cooperation with the G7 countries, other countries in Europe, and the European Commission. Close partnerships with UN agencies have been instrumental in establishing a World Bank footprint on the ground in conflict-affected countries such as Yemen, allowing the World Bank to fund programs where humanitarian and development assistance intersect.

    Lastly, outreach efforts have been especially strong with non-traditional partners, including the Gulf Cooperation Council countries and the Arab Funds for development, as well as civil society organizations and the private sector actors.

    Last Updated: Oct 16, 2019

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