KUWAIT CITY: Kuwait, jointly with the Arab Fund for Economic and Social Development (AFESD), held a high-level symposium on “Inclusive Development in the Arab World: A Call for Action” on Wednesday, 14 February 2018.
The event was hosted at the Arab Fund’s Headquarters. The panel discussion was chaired and moderated by HE Dr. Yousef Al-Ebraheem, Economic Advisor at Al-Diwan Al-Amiri. It included, Dr. Jihad Azour, Director of the IMF’s Middle East and Central Asia Department, as the keynote speaker, and Dr. Ibrahim Elbadawi, Managing Director of the Economic Research Forum, and Professor Adeel Malik of Oxford University as discussants.
During his introductory remarks and the subsequent discussion, Al-Ebraheem indicated that the symposium was the eighth high-level forum organised by the CEF jointly with the AFESD, aimed at stimulating an open debate on the evolving economic challenges faced by policymakers in Kuwait and the wider Arab community. He discussed the economic and financial sector reforms that are essential to achieve sustained inclusive growth and reduce unemployment in Arab countries, taking into consideration the challenges of widespread conflicts, a refugee crisis and migration crisis, as well as low and volatile oil prices.
Azour made the case that now is the time to accelerate reforms to promote higher and more inclusive growth in the Arab World. First, the region is facing the pressing need to create jobs and harness the talent of 27 million youth who will enter the labour force in the next five years. Second, it should take advantage of the strengthening global economy, expected to grow at 3.9 per cent in 2018 and 2019, fastest pace since 2011.
Noting that the region continues to bear the burden of protracted conflicts and was hit by the 2014 drop in oil prices, Azour observed that growth has not been strong enough for much of the decade to create jobs for many and lift their living standards. This led to growing frustration about joblessness, poverty and inequality, especially among the youth, women, rural communities, and refugees.
Azour further emphasised that creating the conditions for sustained job-rich growth will require macroeconomic stability supported by prudent fiscal and monetary policies, but countries should also pursue a critical mass of reforms aimed at fostering the private sector, diversifying economies, boosting productivity and investment, and enabling greater inclusion. With more that 55 per cent of firms in the MENA citing corruption as a major constraint, the region needs to strengthen governance, accountability, and transparency. Reforming the business climate and levelling the playing field would be key to promoting private investment, especially FDI, which could facilitate technology and knowledge transfer to the region and further integrate it to the global economy. SME loans account for just two per cent of GDP in the region, so it would be important to enhance financial inclusion, including by leveraging fintech. Finally, there is a need to reform education to equip people with knowledge and skills demanded by the private sector competing in today’s global economy.
