English Subtitles for Economic Challenges in the MENA Region | MEI VantagePoint



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hi<font color="#CCCCCC"> this is</font><font color="#E5E5E5"> paul david from the leaf</font> institute and welcome to vantage<font color="#E5E5E5"> point</font> very happy to have with<font color="#CCCCCC"> us today dr.</font> <font color="#CCCCCC">champion on devarajan the chief</font> economists for the<font color="#CCCCCC"> Middle East and North</font> Africa at<font color="#CCCCCC"> the</font><font color="#E5E5E5"> World Bank and shanta has</font>

been with<font color="#CCCCCC"> the bank since 1991 and been</font> working on many many<font color="#CCCCCC"> different aspects</font> including a lot<font color="#E5E5E5"> of work on the social</font> side of<font color="#E5E5E5"> economic</font><font color="#CCCCCC"> development and was the</font> director of the world development report in 2004 making services work for poor

people prior to that<font color="#CCCCCC"> he was at the</font> <font color="#E5E5E5">harvard kennedy school of government</font> stated author of over a hundred author and co-author over 100 publications and a good<font color="#E5E5E5"> friend and great to have you</font> Chantal and<font color="#E5E5E5"> the Middle East and North</font>

Africa is a varied region from<font color="#CCCCCC"> the rich</font> <font color="#CCCCCC">countries to very poor regions</font><font color="#E5E5E5"> and is a</font> part<font color="#E5E5E5"> of the world that's obviously gone</font> through very dramatic changes 2011 how would you sort of describe the economic shape of<font color="#CCCCCC"> development since the</font>

turbulence of 2011 how has that impacted the economies as you see them well maybe we could<font color="#E5E5E5"> take a step back</font><font color="#CCCCCC"> and look</font><font color="#E5E5E5"> at</font> what<font color="#E5E5E5"> the region looked like for the</font> decade before 2011 because it despite the fact that it's a very diverse region

the economic performance across the board was quite<font color="#E5E5E5"> similar first they had</font> very rapid growth five six<font color="#E5E5E5"> seven percent</font> 34 countries like Egypt and Tunisia and so on thanks to this growth there was a rapid poverty reduction and this is not

terribly<font color="#E5E5E5"> well known but inequality</font> levels were actually quite<font color="#E5E5E5"> low and</font> declining in many of these countries and yet we had revolutions in four countries and a lot<font color="#CCCCCC"> of people linked that to the</font> shocks that happened you know the global

economy the 2008 financial crisis who'd price in right because you're describing an overall<font color="#E5E5E5"> picture that seems positive</font> was it the shock that brought down<font color="#E5E5E5"> the</font> system or something<font color="#E5E5E5"> more yeah it I</font><font color="#CCCCCC"> think</font> it was something more systemic there

they've had shots before yeah and<font color="#E5E5E5"> have</font> had some<font color="#E5E5E5"> shock since</font><font color="#CCCCCC"> 10pm sure</font><font color="#E5E5E5"> we'll get</font> to know<font color="#E5E5E5"> I think</font><font color="#CCCCCC"> what was really going on</font> and this comes out when you look at some <font color="#CCCCCC">of the happiness surveys you know the</font> Gallup poll that asked people because

while all of these indicators<font color="#E5E5E5"> were</font> progressing positively the happiness level was declining in these content was that perhaps as a lot of people<font color="#E5E5E5"> indicate</font> they bring in the communication revolution and technology is it because

<font color="#E5E5E5">people began</font><font color="#CCCCCC"> to see what was the case in</font> advanced economies and they began their they may<font color="#CCCCCC"> they may have sucked some of</font> that but it will it connected to that I think<font color="#CCCCCC"> what was really going on was</font><font color="#E5E5E5"> that</font> the middle<font color="#CCCCCC"> class was squeezed during</font>

this period so what<font color="#CCCCCC"> your they were</font><font color="#E5E5E5"> not</font> for grabs right middle class was was not progressing and in fact<font color="#E5E5E5"> we were</font> declining where is the the very rich<font color="#E5E5E5"> and</font> the poor were improving their situation and this might explain the paradox that

inequality was going down while there was all this resentment and anxiety is because the middle class were actually becoming more like the poor and so that's why inequality was going down but certainly<font color="#E5E5E5"> when you're a middle when</font>

you've worked hard and entertainment ourselves out as it right and you were you had expectations of their job and good public services and all of those expectations were being defeated and that's I think where the the whole

system broke yeah if you like and another way I think<font color="#E5E5E5"> about</font><font color="#CCCCCC"> it is that</font> there was an old social contract which is actually surprisingly similar across <font color="#CCCCCC">the board where the state provided jobs</font> the public sector was the main employer

of<font color="#CCCCCC"> University graduate also provided</font> subsidized health health education and <font color="#E5E5E5">also subsidized food and fuel and in</font> return the citizens because they didn't want<font color="#E5E5E5"> to threaten the largesse of the</font> state kept their voices quiet and that

was a contract that sustained you're saying it ended up not working too well for the middle<font color="#CCCCCC"> class in this that's</font> <font color="#E5E5E5">right because the jobs weren't there</font> yeah the<font color="#CCCCCC"> government</font><font color="#E5E5E5"> couldn't</font> public sector could no longer a higher

jobs because they<font color="#E5E5E5"> were running huge</font> deficit and the private sector didn't grow fast<font color="#CCCCCC"> enough to absorb all the young</font> people entering the<font color="#E5E5E5"> labor force these</font> middle class graduates university graduates<font color="#E5E5E5"> so to the point where the</font>

unemployment<font color="#E5E5E5"> rate was the highest in the</font> <font color="#E5E5E5">developing world in the Middle East and</font> North Africa ok now that was seven years ago that's<font color="#E5E5E5"> right is that now in a way</font> something that's gone ancient<font color="#E5E5E5"> history</font> what has<font color="#E5E5E5"> happened in the six</font><font color="#CCCCCC"> years you</font>

know like<font color="#E5E5E5"> with most</font><font color="#CCCCCC"> you know instability</font> things go backwards before they go <font color="#E5E5E5">forward what's gotten worse and has</font> anything gotten better now things have gotten worse across the board since 2011 there's no question the the Arab Spring

countries if<font color="#E5E5E5"> you like went into several</font> years<font color="#CCCCCC"> of turmoil and some are</font><font color="#E5E5E5"> still</font> facing that including places like Libya and Syria and Yemen that are in all still in<font color="#E5E5E5"> full blown 30 war yeah</font><font color="#CCCCCC"> yeah and</font> but even Egypt and Tunisia for instance

while they had a revolution and new government and from some of<font color="#E5E5E5"> them had</font> several new<font color="#E5E5E5"> governments are faced with</font> things like terrorist attacks which has certainly dampened tourism which is a major source of revenue tour of Tunisia

and also dampened foreign investment yeah so you think grow overall growth fall from<font color="#E5E5E5"> the average</font><font color="#CCCCCC"> of about five</font> percent how is next in the countries that<font color="#E5E5E5"> have been impacted because maybe</font> you know the UAE and Saudi Arabia<font color="#CCCCCC"> are</font><font color="#E5E5E5"> in</font>

a different<font color="#E5E5E5"> you know situation obviously</font> <font color="#CCCCCC">this as you said all been impacted</font> negatively because of instability and insecurity has it created some structural changes that<font color="#CCCCCC"> they create</font> conditions that might be you know you

can build on something well actually you mentioned UAE and Saudi<font color="#CCCCCC"> Arabia because</font> the other feature that<font color="#E5E5E5"> is then made the</font> rest of the region also being experiencing low growth is the fall in oil prices so you had all prices fall by

about fifty percent<font color="#E5E5E5"> is starting in 2014</font> and that has been meant that these other countries like Saudi Arabia the<font color="#E5E5E5"> GCC</font> essentially which were growing at a fairly rapid clip now they<font color="#E5E5E5"> are</font> rinsing and where growth was helping to

some degree a growth of others exam the remittance and an<font color="#E5E5E5"> aid and young capital</font> flow and that's gone down so you've got you know it's paradoxical because normally when price of oil goes down should be a good good<font color="#CCCCCC"> thing for the</font><font color="#E5E5E5"> oil</font>

importers yeah<font color="#CCCCCC"> Morocco's the</font><font color="#E5E5E5"> Tunisian</font> but these are<font color="#E5E5E5"> the ones that rely on</font> remittances and aid from Gulf countries as well as as I mentioned earlier the terrorist attacks seem to have been in <font color="#E5E5E5">the oil importing countries like like</font>

Egypt and Tunisia so you've got the oil exporters not growing the oil importers not growing and over and of course the global economy is no greater dictator you know here we are<font color="#E5E5E5"> at the</font><font color="#CCCCCC"> beginning of</font> 2017 low oil prices not only<font color="#E5E5E5"> slow global</font>

growth but with the election of Donald Trump in the US and maybe other developments in Europe and particularly us threats<font color="#E5E5E5"> maybe to the global trading</font> regime that might have<font color="#CCCCCC"> impact</font><font color="#E5E5E5"> as well I</font> <font color="#CCCCCC">don't want to get too much into</font>

speculation about you know what the trump presidency could mean for the global<font color="#E5E5E5"> economy but as you see the</font> beginning of twizz's 2017 today in the <font color="#CCCCCC">MENA country in the Middle East North</font> Africa countries what stands out what

are the prospects Egypt is expecting modest I mean moderate growth of four to five percent is<font color="#CCCCCC"> that realistic are they</font> on the right track and we'll get<font color="#E5E5E5"> back to</font> you just<font color="#E5E5E5"> in some more detail but how do</font> you<font color="#E5E5E5"> see the bigger picture is when</font><font color="#CCCCCC"> you</font>

<font color="#E5E5E5">said</font><font color="#CCCCCC"> ok so what what I see is that</font> actually<font color="#E5E5E5"> the what's impressive the good</font> news<font color="#E5E5E5"> I think is that in the middle of</font> all of this or maybe because<font color="#CCCCCC"> of all of</font> this the countries have undertaken some pretty major structural reforms for

instance energy subsidies they've cut energy subsidies across the board in Saudi<font color="#CCCCCC"> Arabia and UAE in Kuwait and in</font> Morocco and Jordan Tunisia Tunisia not so much and in Egypt most most prominently and that augurs well because

that leaves the economy in a better position to<font color="#E5E5E5"> to benefit from global</font> growth from trade from investment in much better<font color="#E5E5E5"> way than they would would</font> otherwise so while growth I<font color="#E5E5E5"> think our</font> <font color="#E5E5E5">projections for growth</font>

20-17 are not very high there are these what<font color="#E5E5E5"> I might describe as green shoots</font> yeah in in the area and you mentioned <font color="#CCCCCC">Egypt now in Egypt had a serious</font> macroeconomic problem over the<font color="#E5E5E5"> last 18</font> months which was thankfully resolved in

<font color="#CCCCCC">the late last year with the devaluation</font> and then floating of the egyptian pound of introduction of the value-added tax and atmosphere and some energy<font color="#E5E5E5"> subsidy</font> reforms and that has left that has rendered the economy in much better

shape than it was before and we're already<font color="#E5E5E5"> seeing remittances</font><font color="#CCCCCC"> arbitration</font> <font color="#CCCCCC">saw that and someone directed exactly a</font> now he said that's that's good news the point is that what that is really refreshing is the fact that<font color="#E5E5E5"> the economy</font>

was very distorted and now it's it's getting the benefits of violence is all that that's<font color="#E5E5E5"> not necessarily something</font> that can sustain growth for a long time it's like<font color="#CCCCCC"> a one-shot improved dividend</font> kind of way for sustaining growth they

still need to<font color="#CCCCCC"> do a lot</font><font color="#E5E5E5"> more structural</font> reforms I mean the Egyptian business climate is still very very sensitive because of red tape and<font color="#E5E5E5"> a difficulty of</font> doing business that's one or are<font color="#E5E5E5"> there</font> still pricing issues well they're

related the pricing issues have to<font color="#CCCCCC"> do</font> with oligopolies in the only magician directly to political elites and crony capitalism so the<font color="#E5E5E5"> Egyptian industrial</font> sector is still not very dynamic<font color="#CCCCCC"> and in</font> <font color="#E5E5E5">particular there's very little growth</font>

and small and medium<font color="#CCCCCC"> enterprises which</font> are the ones that are going<font color="#E5E5E5"> to create as</font> well because of<font color="#E5E5E5"> sort of local monopoly</font> right so there you have monopoly<font color="#CCCCCC"> higher</font> that ever then<font color="#E5E5E5"> I'm usually connected to</font> the<font color="#CCCCCC"> political elite yeah that are able</font>

<font color="#CCCCCC">to sustain very high prices and we see</font> it's the<font color="#CCCCCC"> same thing in</font><font color="#E5E5E5"> Tunisia and we</font> want to eat<font color="#CCCCCC"> you</font><font color="#E5E5E5"> if you also have sort of</font> the<font color="#CCCCCC"> military-industrial or the military</font> business side of things that choice they don't pay taxes they don't you know they

have much<font color="#CCCCCC"> better condition and that</font> crowds out even the Egyptian private sector that that's what they say yes actually the Egyptian private sectors sometimes competing but the main<font color="#E5E5E5"> the main issue is</font>

there is a small and medium enterprises <font color="#E5E5E5">we need to come up with ways in which</font> they can grow and flourish and really be you know Egypt could be a major manufacturing exporter it has well play as well plays it's got a great work<font color="#E5E5E5"> 4-8</font>

location and<font color="#E5E5E5"> boris and canal and a</font> reasonably educated population but we need to get break the the<font color="#CCCCCC"> we need wing</font> domestic competition real genuine domestic competition indeed well you talked earlier<font color="#CCCCCC"> about the</font><font color="#E5E5E5"> old social</font>

contract and now with the lifting of subsidies with floating us and I'm not just talking about Egypt that's the many the state is no longer able to<font color="#E5E5E5"> be the</font> welfare state or the you know national socialist state and then an economic

sense that it was and yet you know the political arenas have been closed off as well do you see a new<font color="#CCCCCC"> social contract</font> taking place or simply the<font color="#E5E5E5"> absence of</font> the contract no I think<font color="#CCCCCC"> there is a new</font> social<font color="#CCCCCC"> contract because it's not the</font>

case that the state is completely withdrawing from from the economy<font color="#CCCCCC"> on the</font> contrary I think we need a system where the state promotes the private economy rather than captures it and that's what's happening<font color="#E5E5E5"> I mean take the end at</font>

it support<font color="#CCCCCC"> and enable it</font><font color="#E5E5E5"> in a takes care</font> of the most of all today exactly<font color="#CCCCCC"> either</font> they exactly and<font color="#CCCCCC"> you</font><font color="#E5E5E5"> think about energy</font> subsidies which is a reflection of this <font color="#E5E5E5">when you have energy subsidies and when</font> you're spending six seven ten percent of

GDP em on fuel necessary energy right what that means is that what it tells the poor person if<font color="#E5E5E5"> you want to get a</font> benefit from the state you have<font color="#E5E5E5"> to</font> consume fuel right and as a result of course the rich are the ones who get the

biggest benefit<font color="#E5E5E5"> the graph drive</font><font color="#CCCCCC"> the</font> gas-guzzling<font color="#CCCCCC"> cars if</font><font color="#E5E5E5"> you convert that to</font> a cash transfer then the individual says you tell the individual you<font color="#E5E5E5"> can spend it</font> <font color="#E5E5E5">on whatever you like very priority' they</font> prioritize wasn't the state priors

risers for you so that's the<font color="#E5E5E5"> shift in</font> the<font color="#CCCCCC"> social have a number of</font><font color="#E5E5E5"> countries</font> <font color="#E5E5E5">gone with cash transfer payment I mean I</font> Iran did it no one yeah we just<font color="#E5E5E5"> Egypt</font> <font color="#E5E5E5">has done it I mean it's scaling it up</font> but I would cover

I don't know 10 milligram dose yeah Morocco they all have pieces<font color="#E5E5E5"> of it</font> <font color="#E5E5E5">Morocco and Tunisia but interestingly</font> but the Gulf states are<font color="#E5E5E5"> now going you</font> know Saudi Arabia just introduced a cash transfer program Kuwait is considering

it so all of these<font color="#CCCCCC"> countries are</font> beginning to to move in that<font color="#E5E5E5"> in that</font> direction and I<font color="#E5E5E5"> think those are the</font> ingredients of a new social<font color="#CCCCCC"> contract</font> we're not<font color="#CCCCCC"> there gather yes but let me</font> ask you something about economic

integration a lot of the<font color="#E5E5E5"> economies in</font> <font color="#CCCCCC">the in the region where r NT York State</font> selling raw<font color="#E5E5E5"> materials or they were</font> rather closed off crony capitalist that <font color="#CCCCCC">a you know a certain point import</font> substitution and so on<font color="#E5E5E5"> and now we're in</font>

a<font color="#E5E5E5"> world where you know if you want to</font> really get ahead to export you have to be<font color="#E5E5E5"> competitive and open up to what</font> degree do you see regional economic integration as essential or can countries in the region just<font color="#E5E5E5"> go you know</font>

from country to global or do we have to pass through the hard work of regional infrastructure regional integration so that we really<font color="#CCCCCC"> have a synergy of a</font> region now you know the<font color="#CCCCCC"> menna is the</font> least integrated region in the world but

on the<font color="#E5E5E5"> other hand it it's understandable</font> because they produce more or less the same products so there's not much gain to be had by trading with each other which<font color="#CCCCCC"> is why they don't have much trade</font> with each other the<font color="#CCCCCC"> big-ticket item is</font>

going to be trade with the rest of<font color="#E5E5E5"> the</font> world now there are<font color="#CCCCCC"> some cases where</font> <font color="#E5E5E5">regional integration can facilitate that</font> they take the Maghreb for instance<font color="#E5E5E5"> and</font> trading with Europe right there were huge gains from opening up trade with

with your no question about that<font color="#CCCCCC"> but you</font> could think<font color="#E5E5E5"> of it where there's a value</font> <font color="#E5E5E5">chain within the Maghreb between Tunisia</font> Algeria and Morocco where products are made along the<font color="#E5E5E5"> chain great integration</font> and then sold to Europe yeah so that

sense regional integration can have a <font color="#E5E5E5">huge benefit if it is accompanied by</font> <font color="#E5E5E5">this opening up of trade yeah they were</font> like a clear target as it were benefiting a global market the only other<font color="#CCCCCC"> thing I would add is that trade</font>

integration may not by itself generate big benefits but infrastructure integration could have huge benefit to you guess what i was i could have a regional electricity market exactly water yeah so those could

have could have huge benefits and let me add that and this is one<font color="#CCCCCC"> of the</font><font color="#E5E5E5"> thinking</font> that<font color="#E5E5E5"> this is our thinking at the moment</font> it is that all<font color="#CCCCCC"> of these things including</font> trade integration<font color="#CCCCCC"> help build some kind</font> of trust among the countries and that

because it's not<font color="#CCCCCC"> a secret that some of</font> these countries<font color="#CCCCCC"> are engaged in proxy</font> wars with the eldest success so it could be<font color="#CCCCCC"> that trade information would be a way</font> <font color="#CCCCCC">of trying</font><font color="#E5E5E5"> to build trust and then bring</font> down some of the hostility around<font color="#CCCCCC"> or</font>

<font color="#E5E5E5">might it also encourage some foreign</font> direct investment because if they can invest<font color="#E5E5E5"> in a regional market and regional</font> capacity is rather than country-by-country diversify a bit more right let<font color="#CCCCCC"> me</font><font color="#E5E5E5"> ask you a bit on the on</font>

conditional status of women and<font color="#E5E5E5"> mina</font> economies what's the general picture and what<font color="#E5E5E5"> are the trends are we doing better</font> are they being squeezed out and then<font color="#CCCCCC"> i</font> want<font color="#CCCCCC"> to ask about obviously the big</font> cohort of youth but let's start with the

women I mean there's again good news and <font color="#CCCCCC">bad news the good news is women are</font> being<font color="#E5E5E5"> educated at unprecedented rates</font> right the percentage<font color="#E5E5E5"> of women</font><font color="#CCCCCC"> there more</font> women than men in primary school secondary school and<font color="#E5E5E5"> yet all what it was</font>

at<font color="#CCCCCC"> university of yellow at all levels</font> the enrollment rates are higher so basically the the women and the Arab world are more<font color="#E5E5E5"> educated than that the</font> bad news is the labor force participation rate is the lowest in the

world in the<font color="#CCCCCC"> world it's like twenty</font> <font color="#CCCCCC">three percent and of</font><font color="#E5E5E5"> course the</font> unemployment rate for those in<font color="#E5E5E5"> the labor</font> force is also very high it's like double the average unemployment rate so this<font color="#E5E5E5"> is</font> <font color="#E5E5E5">very disturbing because these women are</font>

extremely<font color="#E5E5E5"> well educated and then are</font><font color="#CCCCCC"> not</font> in the labor force and that's a<font color="#E5E5E5"> huge</font> loss I mean you can think<font color="#E5E5E5"> of how much</font> more these<font color="#E5E5E5"> countries can do in any</font> country is done particularly well and is it a cultural<font color="#CCCCCC"> thing is it a regulation</font>

issue is it's my feeling it I think it goes back to<font color="#CCCCCC"> the</font><font color="#E5E5E5"> labor market yeah see</font> basically the women were disproportionately higher than the public because that was a safe environment and

it had predictable hours and and the conductor<font color="#CCCCCC"> conditions then when the</font> public<font color="#E5E5E5"> sector stopped hiring a lot of</font> the<font color="#CCCCCC"> manic</font><font color="#E5E5E5"> right the men started working</font> in the informal sector but the informal sector is not very hospitable to women

it's insecure and they can get harassed without any any retribution hunters environment exactly and so<font color="#CCCCCC"> they dropped</font> <font color="#E5E5E5">out of the labor force entry so I</font> actually don't buy I<font color="#CCCCCC"> mean I'm sure</font><font color="#E5E5E5"> there</font> is<font color="#E5E5E5"> there are cultural factors involved</font>

but the studies that I've seen<font color="#E5E5E5"> show that</font> this this is a pure market phenomenon that is dead standing the way so again we come back to if we can build the formal private sector then you might see more women are women and tackling and

there's no question you know if you want to<font color="#E5E5E5"> grow a</font><font color="#CCCCCC"> middle class you have to have</font> a<font color="#E5E5E5"> middle class where there are two</font> <font color="#E5E5E5">adults working in the family</font><font color="#CCCCCC"> and that's</font> the way all successful countries have have<font color="#CCCCCC"> done it and I think</font><font color="#E5E5E5"> we should be</font>

going<font color="#E5E5E5"> that direction on youth obviously</font> an enormous cohort what you know what's the<font color="#CCCCCC"> picture first of all and obviously</font> the prospect there's always repeated that you know you need 10 million jobs over the next so many<font color="#E5E5E5"> years and they're</font>

not<font color="#E5E5E5"> going</font><font color="#CCCCCC"> to</font><font color="#E5E5E5"> happen on judge well well</font> the current situation what are the prospects as far as well I think<font color="#E5E5E5"> again</font> the the<font color="#CCCCCC"> youth unemployment rate is</font> double the average unemployment rate and this is<font color="#E5E5E5"> this is perhaps the number one</font>

priority in the region because it's more <font color="#CCCCCC">than just the fact that the young people</font> <font color="#E5E5E5">and by the way the University educated</font> <font color="#CCCCCC">once I've been even higher unemployment</font> <font color="#CCCCCC">great deadly underage less well-educated</font> ones and it's more than the fact that

when you're unemployed you don't have a job it's also a sense of exclusion see if you're<font color="#CCCCCC"> unemployed in Egypt or your</font> young male unemployed you have you lived with your family you<font color="#E5E5E5"> can't marry and</font><font color="#CCCCCC"> you</font> frustrated be good to get in power yeah

<font color="#E5E5E5">you're get excluded from society and</font> we've done<font color="#E5E5E5"> some</font><font color="#CCCCCC"> work that actually shows</font> that its associated with the propensity to go and join terrorist groups like daesh so the youth unemployment problem has huge externalities all over the

so this has<font color="#CCCCCC"> to be our number one</font> priority now when<font color="#CCCCCC"> you say for example</font> let me make one thing to<font color="#E5E5E5"> the other when</font> <font color="#E5E5E5">you say one might expect growth of four</font> percent<font color="#CCCCCC"> in Gyptian economy but how</font><font color="#E5E5E5"> much</font> <font color="#CCCCCC">is that correlated with you with job</font>

growth yeah no it's because<font color="#E5E5E5"> those could</font> go and<font color="#CCCCCC"> duplex right and we've</font><font color="#E5E5E5"> had that</font> right i mean as i said they had<font color="#E5E5E5"> seven</font> percent growth and very little job growth so no<font color="#CCCCCC"> i think</font><font color="#E5E5E5"> the focus has to be</font> on on job creating growth and is that

because of different sectors or more exactly on<font color="#E5E5E5"> it if how would you summarize</font> it's it's it's it's<font color="#E5E5E5"> the ronte sector</font> versus the productive sector so you've got that you<font color="#CCCCCC"> know to</font><font color="#E5E5E5"> Egypt the big good</font> real estate and<font color="#CCCCCC"> the extractive</font>

industries and so on were<font color="#CCCCCC"> the big</font> sources of growth but what<font color="#E5E5E5"> you really</font> need is the chemicals in manufacturing the plastics in<font color="#CCCCCC"> the electronic sector</font> that can that can create create jobs and that's that is<font color="#E5E5E5"> the the big challenge but</font>

as<font color="#E5E5E5"> I said the we also know what it's</font> going to take to get that growth which is creating domestic competition the conditions and<font color="#CCCCCC"> then meta grows</font><font color="#E5E5E5"> organic</font> exactly well when<font color="#CCCCCC"> you talk about sectors</font> and you've talked a lot about the

manufacturing export and so on yet we see countries for example i kindie amazon which has taken all for some parts of the indian economy<font color="#E5E5E5"> has taken</font> <font color="#E5E5E5">off put on the</font><font color="#CCCCCC"> high tech or services or</font> you know software and that<font color="#E5E5E5"> kind of and</font>

then it's created a great boom in some parts of India for example and there's some dynamism in Egypt and George and UAE and Beirut and so on on V the new technology servicing the information revolution to in Europe sort of surveys

and studies to what degree is that sector a real you<font color="#E5E5E5"> know a</font><font color="#CCCCCC"> heavyweight</font> <font color="#E5E5E5">that could that could make an impact</font> it's significant particularly as you said in Jordan places like that but it's <font color="#E5E5E5">not going to be the big employer and by</font>

<font color="#E5E5E5">the way it's not the big employer in</font> India either green<font color="#CCCCCC"> India has a labor</font> force of 400 million and the entire IT enabling services sector hires what formula so it's<font color="#E5E5E5"> you know one present and that</font>

<font color="#CCCCCC">you're never</font><font color="#E5E5E5"> an exceptional yeah yeah</font> that's that's the blimp or the<font color="#CCCCCC"> biggest</font> so<font color="#E5E5E5"> but I would say that the service</font> <font color="#E5E5E5">sector in general could be an engine of</font> growth of<font color="#E5E5E5"> job creating good but that's</font> <font color="#CCCCCC">Ric tourism hospitality all of those</font>

also<font color="#E5E5E5"> could be engines of growth but for</font> that you need the both the investment climate but also peace and some some level of the<font color="#CCCCCC"> bills well as were</font><font color="#E5E5E5"> pending</font> because time is coming a little bit to a close i wanna ask a<font color="#E5E5E5"> little bit about how</font>

<font color="#E5E5E5">you do see the new us</font><font color="#CCCCCC"> administration's</font> potential economic policies and<font color="#CCCCCC"> impact</font> and then<font color="#E5E5E5"> i want to ask you a bit about</font> the bank and what what what is what it <font color="#E5E5E5">does</font><font color="#CCCCCC"> in intimately so you know at the</font> bank you're<font color="#E5E5E5"> looking at these</font>

developments you have to you know well Lana and you know there's no I think<font color="#CCCCCC"> the</font> one the one constant is that there's huge uncertainty you know the level of uncertainty has gone up around what the administration will do the new US

administration and I would say there are two again countervailing factors I mean if the administration goes ahead with its plan for a stimulus which is a tax cut and an increase in infrastructure that's going to have a boosting effect

on the US economy is getting even have a breach on<font color="#CCCCCC"> the car so that's that area</font> it's not okay but if<font color="#E5E5E5"> you if they also</font> impose tariffs or other kinds<font color="#E5E5E5"> of</font> restrictions on trade again that may not yeah it's only<font color="#CCCCCC"> if it turns into a trade</font>

war could that be a real disaster for mennah if by itself it might have some effect but not not be kind<font color="#E5E5E5"> of like a</font> global pattern then then it early to<font color="#E5E5E5"> I</font> would<font color="#CCCCCC"> imagine a global down yeah oh that</font> was very serious role at downturn yes so

you hope for one and not the other <font color="#E5E5E5">expenses so in ending what do you guys</font> do with them at<font color="#E5E5E5"> least today a World Bank</font> how do you see your mission what in fact you have well we have about a year and a half ago decided that we were going to

dedicate our mission in the Middle East and North Africa towards promoting peace and stability in the region through economic and social inclusion so it's<font color="#E5E5E5"> not the usual World Bank style</font> of bills<font color="#E5E5E5"> again and and also exactly</font><font color="#CCCCCC"> the</font>

building infrastructure for the sake of building infrastructure when you've got a civil war<font color="#CCCCCC"> going on is not</font><font color="#E5E5E5"> necessarily</font> <font color="#CCCCCC">the best way to proceed and we've had</font> cases where we built the road and then there's been a bomb and the road<font color="#CCCCCC"> has</font>

disappeared so we are trying<font color="#E5E5E5"> to</font> strengthen institutions to create social and economic inclusion so for<font color="#E5E5E5"> instance</font> we have<font color="#CCCCCC"> a project focusing on</font><font color="#E5E5E5"> Upper</font> <font color="#E5E5E5">Egypt so southern Egypt trying to create</font> jobs<font color="#E5E5E5"> and build infrastructure for small</font>

community communities in upper region and<font color="#E5E5E5"> this is having that sense of</font> empowerment because what we realize is that and that's done through projects with the government the government the central government borrows the money but

then the money actually ends up in the governor<font color="#CCCCCC"> rich in the three governors</font><font color="#E5E5E5"> and</font> what kind of things are being in operation yeah so there's there's there's some infrastructure mainly maintenance of roads and and create a

local economy yes and enable people to go<font color="#E5E5E5"> to work whether it will be either</font> then there's a entrepreneurship<font color="#CCCCCC"> for</font> especially<font color="#E5E5E5"> focused on women some</font> self-help businesses and things like that and then some agriculture

development as well fantastic are you able<font color="#CCCCCC"> to do anything in the conflict</font> country yeah so what<font color="#E5E5E5"> would ya Yemen well</font> perhaps the most<font color="#E5E5E5"> interesting one is we</font> just recently just started disbursing <font color="#E5E5E5">two loans to Yemen they're actually</font>

glance which were already approved before the war started but our usual rules are when there's a de<font color="#CCCCCC"> facto</font> government we stop dispersing but you know this Wars been going on now for almost two years and<font color="#E5E5E5"> so what we decided</font>

was that there<font color="#CCCCCC"> is a way to disperse</font> these<font color="#E5E5E5"> loans without necessarily having a</font> government if there was a third party that could actually make sure that the money<font color="#E5E5E5"> was spent for the purposes to</font> which it was intended so we have one

loan which is for immunizing children and that's very necessary we're going to avoid<font color="#E5E5E5"> some long-term</font> damage and that's being dispersed through WH oh and another one which provides cash grants as a social fund

for development which is<font color="#E5E5E5"> a very well-run</font> organization but that's being dispersed through undp so we are<font color="#CCCCCC"> working in the</font> conflict area in Iraq as well we are actually we have a project in Iraq that helps to rebuild infrastructure in those

areas that daesh has just vacated yeah and this both because dice when they leave tend to destroy the entire<font color="#E5E5E5"> city</font> but also it helps to build<font color="#CCCCCC"> trust with</font> the communities<font color="#CCCCCC"> and the and the</font> government come back and they<font color="#CCCCCC"> live that</font>

<font color="#E5E5E5">triumph so then that's a that's alone in</font> <font color="#E5E5E5">Iraq so we're trying every which way to</font> do as much<font color="#CCCCCC"> as we can fantastic well</font> thank you<font color="#CCCCCC"> shanta this has been very very</font> fascinating and very very interesting and thank you for<font color="#CCCCCC"> being with us today</font>

we've been<font color="#E5E5E5"> with dr. Guevera John head of</font> the chief economist for the Middle East and North Africa at the World Bank and thank you for coming<font color="#E5E5E5"> and we'll see</font><font color="#CCCCCC"> you</font> <font color="#E5E5E5">next time</font>



Video Description

February 8, 2017 - Shanta Devarajan, chief economist of the World Bank’s Middle East and North Africa Region, joins host Paul Salem to discuss economic challenges facing Egypt and crisis areas in the region, how the World Bank is adapting its approach to handle ongoing conflicts, and where there may be signs for optimism looking to the future for regional economies.