Abstract
MENA’s economies have not delivered when it comes to meeting the needs of their growing population and the aspirations of the youth by creating jobs. As a result, people have protested demanding change during the Arab Spring and recently, 2019, in Algeria. The region’s economies rely excessively on oil for all their hard currency earnings to import food and to buy the peace, while the autocrats enrich themselves.
Such an approach is not a long-term solution without serious structural changes in the economy as well as meeting the challenges from:
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The shale oil revolution that competes for the same markets as MENA’s
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The development of energy alternatives and renewable energy
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Efforts to mitigate climate change
These will result in a decrease in the demand for MENA’s oil and fossil fuels, which should give them an incentive to embark on an economic diversifying program and to encourage foreign direct investment. Such a course of action requires an institutional environment that is conducive to such a policy.
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- 1.
This list is a generalization. All of these points do not apply to all MENA governments. Kuwait, for example, has a parliament and does well by its citizens and even invests a share of oil revenue for future generations.
- 2.
The reality is that the youth in MENA prefer to work for the government because of the better pay and the job security. At the same time, the private sector is not as keen to employ nationals because of the much higher cost compared to expat labor but also because of the lack of the skills required among the citizens. This speaks to the poor performance of the MENA’s educational system in not delivering graduates with the skills that match the demands of their respective economies. A decade ago, the World Bank has produced an important report addressing the education sector, but progress has been slow (see World Bank 2008).
References
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Raghavan S (2019 Their president gone, Algerians now want democracy. Will the army allow it? The Washington Post, 3 April. https://www.washingtonpost.com/world/their-president-gone-algerians-now-want-democracy-will-the-army-allow-it/2019/04/03/ebcfa436-5263-11e9-bdb7-44f948cc0605_story.html
World Bank (2008) The road not traveled: education reform in the Middle East and North Africa. MENA Development Report. World Bank, Washington, DC. © World Bank. https://openknowledge.worldbank.org/handle/10986/6303 License: CC BY 3.0 IGO
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Akacem, M., Miller, D.D., Faulkner, J.L. (2020). Why the Status Quo Is Unsustainable. In: Oil, Institutions and Sustainability in MENA. Springer, Cham. https://doi.org/10.1007/978-3-030-25933-4_8
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DOI: https://doi.org/10.1007/978-3-030-25933-4_8
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