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.