Mideast growth too low to tackle joblessness -IMF
IMF regional chief sees growth of 4.8 pct next year.
October 27, 2010 2:58 by Reuters
Economies in the Middle East and North Africa need to accelerate their post-slowdown growth if they are to reduce jobless numbers, the International Monetary Fund (IMF) regional chief said.
He said countries in the region would emerge from the global downturn with growth of just under 5 percent next year — stronger than in mature economies — but structural reform was needed if sufficient new jobs are to be created.
“MENA (Middle East and North Africa) region growth will be at a rate of 4.2 percent this year versus 2.3 percent in 2009 and the growth will be 4.8 percent next year,” Masood Ahmed, Director of the IMF’s Middle East and Central Asia Department, told Reuters in an interview.
The growth was driven by higher oil revenues and rising state investment in oil-exporting states and “rapid and efficient” government measures in the area’s emerging countries like Egypt, Jordan, Morocco and Tunisia, he said.
“The average rate in the four emerging countries was at around 4.5 percent last year and will be 5 percent this year,” he said late on Tuesday on the sidelines of the World Economic Forum on the Middle East and North Africa.
But he said: “The growth in these countries must be 6.5 percent and higher rather than 4.5 percent or 5 percent to reduce unemployment.”
“MENA’s emerging markets should create 18 million jobs in the next 10 years to cut unemployment,” said Ahmed.
The IMF estimates that the overall jobless rate in the region last year stood at 12 percent compared to 4.5 percent in East Asia and 7 percent in South Asia.
High birth rates and youthful populations mean that more people are joining the ranks of the unemployed all the time.
Ahmed said the Middle East and North Africa should shift the emphasis in external trade away from traditional partners in Europe, where he said annual growth is expected to be between 1.5 and 2 percent in the next five years.
Instead, they should focus on trade with emerging markets where growth will be up to to 8 percent, he said.
“That trend has begun with the rise in exports of raw materials to emerging markets but the emphasis must be on diversifying exports to integrate the region and its enterprises in the global supply chain,” said Ahmed.
(Editing by Stephen Nisbet)