Attempts to reform have been inconsistent and often contradictory across the MENA region, reports Sherine Nasr The majority of reviews of the region's recent economic history highlights its similarity to riding a rollercoaster. Sudden highs alternate with surprising bubbles that burst and are then followed by deep troughs and periods of stagnation. "Over the last few decades, from Morocco to Iraq, the region has consistently failed to engineer the kind of economic growth that results in successful and sustainable competitive development," said entrepreneur Shafiq Gabr, the first chairman of the Arab Business Council, during the 12th Economic Research Forum (ERF) conference held recently in Cairo. A demand-driven institution, ERF, aims to respond to the most pressing issues in the region. And as the institutional dimension of development has increasingly come to be perceived as central to sustainable economic growth, this year's conference was dedicated to the discussion of ways of institutionalising reform. "Extensive and significant research has been undertaken to define institutional successes and failures across the region so as to drive home useful lessons," says Samir Radwan, managing director of ERF. And while some countries in the Middle East and North Africa region (MENA) have experienced periods of growth, stability and rapid development "the fact remains that the region ranks poorly in terms of global competitiveness," argues Gabr, referring to economic as well as political, social and human development indicators. Even a cursory glance at recent UN Human Development reports reveals the size of the problem. Unemployment, which averages 15 per cent across the region, has in some countries reached 30 per cent among the young. "Just to maintain this figure the region needs to create 80 million new jobs by 2017. To do so requires a four per cent growth rate in job creation per annum, something that was not achieved anywhere in the world during the 20th century," says Gabr. And tackling illiteracy, education and democratisation, he adds, are equally formidable challenges. Although agendas for reform have been adopted repeatedly by many governments in the region, concrete results have remained elusive. Mustafa Nabli, MENA region chief economist and sector director at the World Bank, believes that governments which in the 1980s were preoccupied with formulating policies that would create more jobs, promote trade, growth and equity had, by the 1990s, become overwhelmed by the size of the problems they faced. "It was not until the 1990s," he says, when the lessons to be learned from the experience of Eastern Europe and the former Soviet Union began to be driven home, "that governments began to realise that institutions are important tools in acting on policy." Yet across the region such institutions have been prevented from coalescing in an effective way. In order to organise, says Nabli, institutions and pressure groups need access to information, room in which to mobilise and guarantee freedom of expression, none of which have been forthcoming. "Governments have been keeping people from organising to pressure for reform," he says. In a region where governments all too often act against civil society organisations the result is that consumers find it difficult to organise, and reform becomes an arbitrary and inconsistent possibility. "Addressing weakness in governance across the MENA region is essential if we are to move forward along the path of much needed reform," believes Abdel-Latif Hamad, director general and chairman of the Arab Fund for Economic and Social Development . Any successful reform agenda, argues Hamad, requires leadership possessed of vision. "Policies should be tailored for the public good not to promote the interests of minority groups," he says, adding that for reform to happen the process must be continuous, proceeding at a pace that can be accelerated when necessary in order to achieve a certain goal. "Yet so far we have been experiencing the kind of flip flop policies that lead nowhere." Many experts also believe that reform in the region has been hindered by dependence on oil. A recent World Bank study suggests that oil exporting states have been slower in reforming their trade, governance and business environments than the region's non-oil exporting countries. "Although oil has been a driving force behind accelerating growth in some countries in the region yet it has also served as a barrier to hindering the reform of other aspects of economic life," says Nabli. Social, economic and political reform must not only proceed hand in hand, they must also be supported by the majority. "People have always been asked to sacrifice though they were never told what they were being asked to sacrifice for. Hopefully a well- educated new generation will know better how to manage their resources to achieve a more secure future," says Hamad.
