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Job creation through infrastructure investment in the Middle East and North Africa

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  • Ianchovichina, Elena
  • Estache, Antonio
  • Foucart, Renaud
  • Garsous, Gregoire
  • Yepes, Tito

Abstract

In the next 10 years or so, the infrastructure sector has the potential to generate significant employment. This paper estimates annual job creation of about 2.0 million in direct jobs and 2.5 million in direct, indirect and induced infrastructure-related jobs just by meeting the infrastructure investment needs of about 6.9 percent of gross domestic product (about US$106 billion) for the Middle East and North Africa region on average. The breakdown in expected needs is 11 percent in developing oil exporters, 6 percent in oil importing countries, and 5 percent in the Gulf Cooperation Council oil exporters. Needs are particularly high in electricity and roads. While important, infrastructure job creation will not resolve the region's unemployment problem alone and its job creation potential varies greatly across countries. Moreover, the current ability to finance and hence meet the infrastructure needs varies significantly across countries. Oil importers are likely to fall short under business as usual scenarios. In a region in which the public sector is the main source of infrastructure financing, fiscal choices will thus matter to job creation through infrastructure. But there are more challenges, including the governance of job creation, and the proper targeting and costing of subsidies for job creation and the (re)training programs needed. Managing expectations will also matter, as infrastructure jobs will help but will not solve the region's unemployment and underemployment problems.

Suggested Citation

  • Ianchovichina, Elena & Estache, Antonio & Foucart, Renaud & Garsous, Gregoire & Yepes, Tito, 2012. "Job creation through infrastructure investment in the Middle East and North Africa," Policy Research Working Paper Series 6164, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6164
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    References listed on IDEAS

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    Cited by:

    1. Rougier, Eric, 2016. "“Fire in Cairo”: Authoritarian–Redistributive Social Contracts, Structural Change, and the Arab Spring," World Development, Elsevier, vol. 78(C), pages 148-171.
    2. Ruiz Nunez,Fernanda & Wei,Zichao, 2015. "Infrastructure investment demands in emerging markets and developing economies," Policy Research Working Paper Series 7414, The World Bank.
    3. Daniel Camos-Daurella & Antonio Estache & Mohamad M. Hamid, 2017. "Quasi-fiscal Deficits in the Electricity Sector of the Middle East and North Africa: Sources and Size," Working Papers ECARES ECARES 2017-47, ULB -- Universite Libre de Bruxelles.
    4. Shahid Yusuf, 2014. "Middle East Transitions; A Long, Hard Road," IMF Working Papers 14/135, International Monetary Fund.
    5. Monica Beuran & Marie Gachassin & Gaël Raballand, 2015. "Are There Myths on Road Impact and Transport in Sub-Saharan Africa?," Development Policy Review, Overseas Development Institute, vol. 33(5), pages 673-700, September.
    6. Jordan Z Schwartz & Fernanda Ruiz-Nuñez & Jeff Chelsky, 2014. "Closing the Infrastructure Finance Gap: Addressing Risk," RBA Annual Conference Volume,in: Alexandra Heath & Matthew Read (ed.), Financial Flows and Infrastructure Financing Reserve Bank of Australia.

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    Keywords

    Transport Economics Policy&Planning; Labor Markets; Banks&Banking Reform; Public Sector Economics; Labor Policies;

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