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Final Report on Private Sector Development in the MED-11 Region

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  • Richard Woodward
  • Mehdi Safavi

Abstract

This report is concerned with the analysis of privatization and private sector development for the eastern and southern Mediterranean countries partnered with the European Union and collectively known as MED-11. Noting that the analysis applies to the situation prior to the dislocations of the Arab Spring, we review the shift in the relative shares of the public and private sectors in these countries, as well as the business climate affecting the development of the private sector, examine a number of cultural factors that may influence the development of the private sector, and discuss some alternative scenarios for future developments. In the last 20 years, efforts have been made in all countries of the MED-11 to encourage private sector development and, to a greater or lesser extent, privatization of stateowned assets. However, there is a great deal of differentiation among the countries in the group. In the MED-11, Israel has not only the most business-friendly policy environment but also the most developed private sector, accounting for almost 80% of employment. The other countries of the region can be divided into two groups: one, including Algeria, Libya, and Syria, where reforms promoting privatization and private sector development have been very limited, and the rest, in which they have been much more extensive (the Palestine Authority is, for obvious reasons, a rather special case). A generally poor business environment makes for a large informal sector in almost every country in the region; however, generally speaking, we do not find the cultural factors we examine to be hostile to private sector development. Optimistic, reference and pessimistic scenarios are discussed; which of these is realized in any particular MED-11 country will depend greatly on the direction of change following the events of 2011’s Arab Spring.

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Bibliographic Info

Paper provided by CASE-Center for Social and Economic Research in its series CASE Network Reports with number 0110.

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Length: 57 pages
Date of creation: Oct 2012
Date of revision:
Handle: RePEc:sec:cnrepo:0110

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Keywords: Private Sector; Privatization; Business Climate; Middle East; North Africa;

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  1. Khalidi, Raja J. & Samour, Sobhi, 2010. "Neoliberalism as Liberation: The Statehood Program and the Remaking of the Palestinian National Movement," MPRA Paper 29642, University Library of Munich, Germany.
  2. Igor GURKOV, 1994. "PRIVATIZATION IN ISRAEL The Creation of a Mature Market Economy," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 65(2), pages 247-279, 04.
  3. Piotr Kozarzewski & Richard Woodward & Mehdi Safavi, 2012. "Background Report on Private Sector Development in Latin America, the Post-Communist Countries of Europe and Asia, the Middle East and North Africa," CASE Network Studies and Analyses 434, CASE-Center for Social and Economic Research.
  4. Attia, Sayed Moawad, 2009. "The informal Economy as an engine for poverty reduction and development in Egypt," MPRA Paper 13034, University Library of Munich, Germany, revised 27 Jan 2009.
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