Harnessing Trade for Development and Growth in the Middle East

February 14, 2002

Report

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Middle East and North Africa

Trade

Overview

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.

More on:

Middle East and North Africa

Trade

Task Force Members Up

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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