The IMF’s assistance varies across the region, given that each country faces its own economic challenges, and the instruments to tackle those challenges must be tailored to address those unique circumstances. I am pleased to say that a few days ago, in response to the authorities’ request, the IMF Board approved two loans in support of the economic reform agendas of Arab countries in transition: one for Jordan under a Standby Arrangement in the amount of $2.05 billion, and another for Morocco in the amount of $6.2 billion under our Precautionary and Liquidity Line (PLL). This follows on our earlier concessional loan to Yemen under the Rapid Credit Facility.
The Middle East and North Africa (MENA) region suffers significant shortcoming in data, which are particularly problematic at a time economic transition. There are important data gaps, poor data quality and in many cases, internationally agreed standards of statistical methodologies, compilation periodicity and timeliness, and data dissemination practices are not followed.
We know that social exclusion and unemployment, especially among young people, are very painful and that the challenges ahead are formidable. We should not let the hopes and aspirations of the people who took to the street go unfulfilled. We must strive to ensure that the people of the Arab countries in transition have the opportunity for a fairer and more prosperous future.
Young people were innocent bystanders in the global financial crisis, but they may well end up paying the heaviest price for the policy mistakes that have led us to where we are today. Young people will have to pay the taxes to service the debts accumulated in recent years.
The informal economy is large and pervasive—and, often, ignored; however, the experience of those who work in the informal sector came under the media spotlight when Tunisian street vendor Mohamed Bouazizi set himself on fire that fateful day in December last year, sparking the Arab Spring protests.
One of my biggest (and heartening) takeaways was that there were more young people bubbling with ideas and entrepreneurial spirit (ready to take risk) than ever before at this regional forum—which reflects a growing recognition of their current role in the Arab Spring and the role they will have to play in the future as drivers of economic change.
For the six oil-importing countries in the Middle East and North Africa region—Egypt, Jordan, Lebanon, Morocco, Syria, and Tunisia—high unemployment is a chronic problem. Averaging above 10 percent for the past two decades, unemployment rates here are among the highest in the world. And, youth unemployment is even more alarming at over 20 percent. Given the enormous economic and social costs of unemployment, the region can no longer afford the status quo. These countries need to create about 18? million full-time jobs over the next decade to provide employment for young people looking for their first job and to bring down unemployment. But, why is unemployment chronically high? And what needs to be done to fix it?
Slow credit growth in the Middle East and North Africa may be constraining the strength of the recovery in the short run, in addition to limiting prospects for longer-term growth. Policymakers are understandably concerned.
After an unprecedented global economic downturn, recovery is beginning to take hold across the world. Nevertheless, the downturn has heightened the core challenges that countries faced before the crisis took hold. Among these, one that stands out in the countries of the Middle East and North Africa is youth employment—or a lack of it.