The OECD has been working with the Middle East and North Africa (MENA) for over 20 years to promote good governance, gender equality, structural reforms, economic competitiveness and other key policy areas. The MENA-OECD Initiative?on?Governance?and?Competitiveness for Development forms the core of this engagement and showcases the ambition to foster sustainable growth and positive development across the region.
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Middle East and North Africa and the OECD
Key messages
Economic growth in the MENA region has been slightly higher than the OECD average over the last decade. The region’s proximity to major markets, a young and educated population, and potential to improve manufacturing and services competitiveness all represent major opportunities. The structural weaknesses exposed by recent crises – including COVID-19, Russia’s war of aggression against Ukraine, and evolving conflicts in the region – highlight the need to strengthen socio-economic inclusion and resilience. It is vital for the MENA region to keep improving the investment climate, connectivity, infrastructure, and further boost trade. Business integrity remains a particularly salient issue, as well as the climate transition and regional integration. Private sector development can support these goals by raising employment, reducing informality, improving diversification, enhancing digitalisation, as well as fostering economic resilience and food security.
MENA countries have much to gain by addressing the challenges of youth employment and female labour force participation rates, which still rank among the lowest globally. Enhancing access to economic opportunities, improving labour market conditions, formalising employment, and addressing underemployment are crucial measures to support job creation. Moreover, promoting SMEs development and entrepreneurship through financial inclusion, access to finance, and business development services can also improve prospects for youth and women in the region and support a vibrant economy. Additionally, orienting reforms through public-private dialogue could further amplify the dynamism of MENA economies.?
In the context of complex and global challenges – from climate change to food insecurity, digital transformation, insecurity, and migration – efforts to further strengthen the transparency, efficiency, and inclusiveness of public governance frameworks, including through tools and capacity building, is key to fostering sustainable prosperity in the MENA region. Developing strategic and co-ordinated approaches to reforms, strengthening the rule of law, enhancing public integrity, regulatory policy, and budgetary governance, leveraging digital transformation, as well as promoting stakeholders’ participation and representation, can support governments in delivering on the promise of quality public policies and services.
Despite efforts to increasingly place citizens at the front and centre of public policies and service design, the promise of these reforms – to promote more responsive policies and participatory decision-making processes – has yet to materialise. This is especially the case for the most marginalised who tend to be very vulnerable to the region's socio-economic challenges (young people, women, migrants). Efforts in this regard are all the more important as the population in the MENA region is one of the youngest in the world, with more than 55% of people under the age of 30. Embedding the principle of inclusiveness in policymaking is therefore essential to empowering all citizens to meaningfully contribute and shape policy outcomes.?
Context
Competitiveness in the MENA region
The MENA region covers a diverse array of economic, political, and social conditions. It benefits from a young and increasingly educated population, access to large markets, and comparative advantages in sectors such as manufacturing, renewable energy, and tourism.
MENA economies have demonstrated marked resilience in the face of economic disruptions and challenges presented by the COVID-19 crisis and the Russian war of aggression in Ukraine.
However, their economic growth may be jeopardised by persistent inflation, rising food prices, and tightening financial conditions, all of which are likely to have an outsized effect on low-income and vulnerable households.
The challenging business environment in the region contributes to economic uncertainty, which is also driven by the effects of climate change and the ongoing conflicts in the region.
The public sector in the MENA region
MENA-region public administrations show varying performance on government effectiveness and factors such as regulatory policy, rule of law, public integrity, and public procurement.
The administrative burden has been growing while the simplification of procedures has not yet produced significant results to improve user experiences.?
Unequal access to digital infrastructure and skills is reproduced through gender and urban-rural divides, with implications for the use of digital government tools. Challenges in effective delivery are reflected in citizens’ dissatisfaction with public services across the region.
However, improving citizens’ experience with public services can both impact their own well-being and drive their perceptions of the competence of government more broadly.
