Thursday, June 25, 2015

Is economic growth where everyone benefits possible?

Dubai: The UAE has topped countries in the Middle East and Africa (MEA) region for inclusive growth, with a score of 57.58, according to MasterCard’s 2015 Middle East and Africa Inclusive Growth report.
Factors including the UAE’s diversification of its economy away from oil and gas, encouragement of entrepreneurship and the development of its education, health care and tourism sectors, creating more jobs, have resulted in the county’s higher ranking for inclusive growth, or sustainable output growth that is broad-based across economic sectors, creating productive employment opportunities and reducing poverty, as defined in the report.
The report, which covers 34 countries, aims to benchmark developing nations in the MEA region against the developed countries of the Organisation for Economic Cooperation and Development (OECD).
The UAE’s score is 6.8 points behind the OECD average of 64.38, according to the report.
The UAE was followed by Qatar, with an index score of 55.2, Bahrain (54.56), Saudi Arabia (51.45) and Oman (50.9). Next came Tunisia, Lebanon, Bostwana, Jordan, Kuwait, South Africa, Egypt, Namibia, Morocco, Cote d’Ivoire, Rwanada, Kenya, Ghana, Zambia and Senegal.
Present conditions that are driving the region’s inclusive growth include economic growth, expanding economic opportunity and equality of outcomes, while the enabling conditions are employment and productivity, access to economic opportunity, governance and youth.
In the Middle East, inclusive growth is critical for social equality and well-being, as well as basic social and political stability, according to the report. “Three core and interlinked areas have to be addressed in this context: managing the ‘youth bulge’, enabling the private sector, and improving governance and rule of law.”
Yasar Jarrar, co-author of the report and vice chair of the Global Agenda Council on the Future of Government, said that inclusive growth is arguably the solution for economic development concerns in the MEA region.
“When income distribution and opportunities are equalised, countries will be able to boost local consumption, power growth, and reduce poverty and unemployment, while also seeing a rise in social and economic mobility, leading to an expanding, dynamic and increasingly prosperous middle class,” he said in a statement.
While some countries in the region have taken steps to grow their economies, the current economic development models are “not fit for purpose anymore” amid challenges including political instability, growing economic divide, social unrest, and rising youth aspirations and demands, according to the report.
“These difficult conditions will continue to hamper the ambitions of regional governments and citizens until a more robust, and inclusive growth model is successfully developed and adopted. The sharp drop in oil prices recently has further highlighted these concerns and brought the region — again — into question in terms of future growth and sustainability,” MasterCard stated.

Image by: Emirates 24/7 News

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