Harnessing trade for development and growth in the Middle East

Thirty to forty years ago, a number of key MENA nations were on an economic par with Asian countries. According to the report, in the 1950s, per capita income in Egypt was similar to that in South Korea; Egypt's per capita income today is less than 20 percent of South Korea's. Long-held suspicions that corrupt practices and other economic inefficiencies and bottlenecks undermine prospects for outside investment and economic growth are confirmed by a multi-country business and economic survey conducted specifically for this study: 20 percent of the respondents said corruption payments averaged between 2 percent and 9 percent of the value of traded goods. To rectify these economic problems, MENA countries must not only liberalize trade, but also pursue a regulatory agenda that encourages genuine economic competition. MENA economies must also move quickly to reform their service sectors, such as banking, if they are to generate outside investment.