The MENA region has yet to reach its full export potential, according to a Friday statement from the Export Diversification Seminar in Cairo. Experts at the seminar have noted that global exports from the region have fallen despite improving performance in the past two decades. "The region is exporting at third of its potential," said Caroline Freund of the Peterson Institute of International Economics. Freund attributed the lag in the exports to the absence of big firms, which she called "superstars", that help in providing job opportunities and "boost and diversify exports". Melise Juad of the World Bank said MENA exporters need to work on diversifying their products and export destinations as "export growth is driven by existing firms to existing destinations and existing products". Chahir Zaki of Cairo University and the Economic Research Forum (ERF) ascribed the underperformance to certain challenges faced by exporters in the region, such as non-tariff barriers, which have affected both intra-regional trade and global trade. He suggested that this problem could be solved by "creating quality control agencies that guarantee the quality of exports." Marion Dovis of the Universite Aix-Marseille recommended implementing international standards on firms producing for domestic markets, which could help improve their performance. Freund suggests that part of the problem is also associated with the overvalued exchange rate in many countries. She added that energy subsidies need to be reformed, since in their current form, they are vulnerable to exchange rate and market price fluctuations. Shantayanan Devarajan of the World Bank emphasised that the public must be made aware of "market distortions" as there are people who are benefitting from it and will resist any reform.
