In Istanbul, World Bank economists taking a hard look at how the Middle East and North Africa (MENA) are weathering the financial crisis are finding some good news. The World Bank and the IMF are holding their annual meetings in Turkey, and a status update on the MENA region shows some resilience.
Shamshad Akhtar, the World Bank’s new vice president for the region, said at a press conference today that MENA’s economy grew by almost 6.2 percent in 2008. But Akhtar says the region has been shaken by what she calls the “Triple-F phenomena”—food, fuel and the financial crisis. She says the food crisis has hit the region hardest, in part because of a growing population and a heavy dependence on imported food. But, she says, despite slowing growth, down to 2.2 percent, the region is faring better than many others.
Akhtar told reporters: “The key message we retain from all this is: the MENA region has weathered the triple crisis well so far.” But there is an “immediate danger of rising unemployment and resurgence of poverty.”
The crisis highlights the urgency of deepening the structural reforms needed to address MENA’s crucial long-term development challenges, Akhtar said, namely creation of productive private sector jobs for a growing labor force and management of scarce common resources, especially water.
Akhtar says the worry in the region is that the economic crisis will lead to social “distress.” The loss of jobs and opportunities for younger people are already visible. Estimates are that unemployment might rise by 25 percent in the Middle East and by 13 percent in North Africa, relative to 2007.
For more on the region’s economic prospects, see 2009 MENA Economic Developments and Prospects Report.