The World Economic Forum on the Middle East and North Africa opened on Saturday with an address from His Majesty King Abdullah II, who stressed the importance of economic growth in stabilizing the region.
Held annually at the Dead Sea, the forum unites business and political leaders to network and discuss regional affairs. This year’s attendees include Palestinian Authority President Mahmoud Abbas, US Senator John McCain, and Secretary-General of the Arab League Dr. Nabil Elaraby.
With GDP growth expected to slow to 3.1% from a forecasted 4.8% in 2013, the MENA region faces significant obstacles in coming years. In a session on advancing growth and resilience, Jordanian Prime Minister Abdullah Ensour spoke to Ibrahim Dabdoub of the National Bank of Kuwait about the possibilities of a Middle Eastern “Marshall Plan”, similar to the one that pulled Europe out of the rubble of World War II.
Dabdoub said that such an initiative would be ideal, but requires tough conditions. He encouraged discussions at the highest levels of the World Bank and the International Monetary Fund. Deputy Managing Director of the IMF Min Zhu shared the stage with Dabdoub and welcomed the idea. He went on to stress the importance of long-term thinking with regards to the economy. Zhu said that in the next few years, the global economy will experience moderate growth; the recession in Europe and the slow pace of American recovery mean that emerging markets are having a difficult time keeping their GDP growth at pre-2008 levels. In light of this development, he said, it is crucial that Middle Eastern economies diversify and move away from petroleum-centric models.
“Oil demand is weakening, price is softening,” declared Zhu. Oil exporting countries have seen significant drops in their GDP. The goal of the IMF is, in the words of Zhu, “to prevent macro instabilities”. With the Arab Spring and regime changes across the region, it is more important than ever for governments to deliver on jobs for their populations.
In a refreshing remark, the Tunisian Minister of Finance Elyes Fakhfakh painted an honest albeit cloudy image for growth in his country. The opportunities are there, yet, barriers remain fundamental. He spoke about the pre-revolution climate, pointing out that foreign investment represented as much as 32% of Tunisia’s GDP. However, the solid financial indicators were not in line with people’s demands, he said. Hence, there is now a need to rethink the economic model.
Throughout the first day of the Forum, a re-emerging theme was to look outside the region for sustainable and innovative solutions. Martin Senn of Zurich Insurance Group talked about the German apprentice model. Germany’s successful programs on vocationary training, Senn emphasized, could do much good in the MENA as well. Others mentioned Indonesia as a role model when it comes to decreasing dependence on the state and transforming the economy. Improving trust between public and private sectors became a recurrent buzz phrase.
As the host nation of the forum, Jordan has its own challenges to deal with. With 10% of the kingdom’s population made up of Syrian refugees—a number that is set to double by the end of 2013—the small, water-scarce monarchy is all but performing miracles to keep everyone within its borders fed. As the conference continues, it seems Syria and Palestine will top the agenda.
Your Middle East covers the World Economic Forum from the ground in the Dead Sea. Join the conversation on Twitter by using the hashtag #WEF.