10/9/2010World Bank economists urge GCC countries to "step up" private sector development
WASHINGTON, Senior economists at the World Bank said Gulf Cooperation Council (GCC) member states need to "step up efforts" in boosting private sector development and recruitment as an alternative to non-oil source of growth.
A World Bank report released at the annual meeting of the World Bank and International Monetary Fund showed that while in the Middle East and North Africa (MENA) have largely avoided a catastrophic recession during the global economic and financial crisis, the regions economy is growing at a weak pace.
In particular, GCC countries and other OPEC member states faced oil producing restraints that curtailed economic growth, according to economists. They said that while oil-producing quotas outlined by OPEC has the incentive to stabilize volatile oil prices, World Bank economists said GCC and oil-exporting countries should allow national oil reserves to be sold on the market.
"The region has a lot of potential. They have to deal with the non-OPEC supply and that non-OPEC supply has been increasing. In the face of that rising non-OPEC supply, they need to contract their own because this is a global-supply demand situation," Elena Ianchovichina, lead economists of the World bank findings, told KUNA in an exclusive interview.
A stark message within the report is the need for GCC and other countries, whose revenues depend heavily on finite oil revenues, to diversity their economies. Referring to examples such as United Arab Emirates which now boasts a thriving port and has increased trade with Asia, Ianchovichina said of the GCC "they need to step up efforts to encourage their nations to educate and place them in the private sectors going in the non-oil part."
A World Bank report released Saturday showed that while countries in the MENA region have largely avoided a catastrophic recession during the global economic and financial crisis, the regions economy is growing at a weak pace. According to the report by Ianchovinchina, growth in the region will average four percent in 2010, compared to the 5.6 percentage point over growth projected for advanced economies and 4.6 percentage points in developing nations.
On the urgency of implementing these changes, Acting Chief Economist of the Middle East Farrukh Iqbal told KUNA these recommended changes, "should have been implemented yesterday." "It is always urgent, but on the whole if you follow progress of reforms in the region, many countries have taken a strong interest in business reform measures to improve the climate for business," Iqbal said.
"If you follow the doing business indicators many countries in the region, Egypt, Iran, Morocco have taken a special interest in improving the business climate. You do see more actions in some areas than in others," he added. "We want things to be happening on all fronts."
http://www.kuna.net.kw/NewsAgenciesPublicSite/ArticleDetails.aspx?id=2116657&Language=en
