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| Authors: | Bernard Hoekman Patrick Messerlin |
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| Publisher: | Council on Foreign Relations |
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Release Date: February 14, 2002
79 pages
ISBN 0-87609-308-X
$10.00
Many observers of the Middle East and North Africa (MENA) believe the lack of economic prospects and poverty in the everyday life of people in the region contribute to extremism, and perhaps even to terrorism. According to this report, MENA countries must dramatically reduce the role of the state in their economies and cut bureaucratic red tape and corruption to develop their economies. Without major moves like these, both at the border and behind the border, nations of this region will fall even further behind the rest of the world, concluded the study.
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.
Bernard Hoekman is research manager for trade at the World Bank’s Development Research Group.
Patrick Messerlin is professor of economics at the Institut d’Etudes Politiques de Paris and director of the Groupe d’Economie Mondiale.
Task Force Members:
ODEH F. ABURDENE, the Capital Trust Group
NOFAL S. BARBAR, Arab Bank PLC
JUDITH BARNETT, Georgetown Global Investment Corporation
MARJORIE ANN CHORLINS, Motorola Corporation
SAM Y. CROSS, Columbia University
RICHARD A. DEBS, Morgan Stanley Dean Witter & Co.
ISHAC DIWAN, the World Bank
EDWARD P. DJEREJIAN, the James A. Baker III Institute for Public Policy
LAMINE DJILANI, Arab Banking Corporation
MOHAMED EL-ERIAN, Pacific Investment Management Company
ABDALLAH EL-MAAROUFI, embassy of Morocco to the United States
STEPHEN P. FARRAR, Guardian Industries Corp.
HANI K. FINDAKLY, Potomac Capital
ALBERT FISHLOW, Violy, Byorum & Partners Holdings, LLC
RANDOLPH H. FLEITMAN, Bureau of Near Eastern Affairs, Department of State
JEFFREY A. FRANKEL, Harvard University
JONATHAN M. FREDMAN, Central Intelligence Agency
MICHAEL GADBAW, General Electric Company
GENE M. GROSSMAN, Princeton University
TAREK BEN HALIM, Goldman, Sachs & Co.
MICHAEL W. HODIN, Pfizer, Inc.
BERNARD HOEKMAN, the World Bank
GARY C. HUFBAUER, Institute for International Economics
SHAFIQ ISLAM, BRN Associates
PAUL JABBER, Geoffrey (USA) INC.
GEOFFREY KEMP, The Nixon Center
MARTHA N. KESSLER, Central Intelligence Agency
SHAKER A. KHAYATT, Khayatt & Co.
ZAHI W. KHOURI, Palestinian Telecommunications Co.
NEMIR A. KIRDAR, Investcorp
ORDE F. KITTRIE, U.S. Department of State
EPHRAIM KLEIMAN, Hebrew University of Jerusalem
DENISE EBY KONAN, University of Hawaii
HARVEY KRUEGER, Lehman Brothers
GERALD W. LUKOMSKI, Motorola, Inc.
ROBERT A. MALLEY, Council on Foreign Relations
PATRICK MESSERLIN, National Foundation of Political Science, World Economy Group
RICHARD W. MURPHY, Council on Foreign Relations
MUSTAPHA NABLI, the World Bank
KARIM NASHASHIBI, International Monetary Fund
JOHN PAGE, the World Bank
THOMAS PARKER, U.S. Department of Commerce
LOUIS PERLMUTTER, Lazard Freres & Co. LLC
GUSTAV RANIS, Yale University
EUGENE REGAN, Irish Institute of European Affairs
DANI RODRIK, Harvard University
ROBERT L. ROSEN, National Financial Partners Corp.
GEORGE R. SALEM, Akin, Gump, Strauss, Hauer & Feld
ANTRANIG SARKISSIAN, Citicorp
JEAN-FRANCOIS SEZNEC, The Lafayette Group, LLC
HENRY SIEGMAN, Council on Foreign Relations
JOAN E. SPERO, Doris Duke Charitable Foundation
PETER SUTHERLAND, Goldman Sachs International
KEVIN R. TAECKER, Enterprise – Saudi Arabia
EMAD TINAWI, Arent, Fox, Kintner, Plotkin & Kahn
IRVING A. WILLIAMSON, Williamson International Trade Strategies, Inc.
FRANK G. WISNER, American International Group, Inc.
JAMEL ZARROUK, Arab Monetry Fund
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