The document summarizes the work of The Centre for Economic Growth (CEG), which is a collaboration between the private sector and a business school that provides research on economic issues impacting the Middle East and North Africa region. The CEG addresses critical challenges like youth unemployment and inclusive economic growth. It also discusses the need for private sector-led growth in MENA countries to generate jobs and address social issues. Reform is needed to move economies from informal to formal sectors to encourage business formation and job creation, especially for women and youth. An improved investment climate and regulatory framework is required to support greater private sector participation and entrepreneurship for economic development.

1. Patricia J. McCall
Executive Director

2. The Centre for Economic Growth (CEG)
 The CEG is the first of it’s kind – a unique collaboration between the region’s
private sector and a leading global business school to provide
groundbreaking original research and publications on the key economic
topics impacting the region.
 The CEG is providing a platform for dialogue for both the private and public
sectors to address the critical economic challenges facing the wider MENA
region.
 The CEG will address the need for timely, independent data and economic
research, and provide for increased private sector engagement on critical
issues including youth unemployment, job creation and inclusive economic
growth.

3. Private Sector-led Economic Growth in MENA
Private sector led growth is critical for MENA in addressing key
economic and social challenges
• Many regional Governments given stretched finances and rapid population
growth are no longer able to absorb workers and be the “employer of choice”
• MENA requires GDP levels of above 6% to impact unemployment rates:
• High levels of unemployment, particularly the youth, was one of the driving
factors of the Arab Spring
• 29.5% youth unemployment in MENA raising up to 50% in some countries
• More diverse and inclusive growth that impacts social indicators and generates
stronger sustainable growth and employment
• Such growth improves living standards, education, health and achieving social
goals.

4. Reform to Address MENA’s Informal Economy
• Account for almost 66% in some MENA countries and account for 1/3 GDP in non-GCC
countries
• Lack framework and incentives that encourage formal businesses
• Informal economy effects individuals and firms: no government protection, access to
credit restricted, low quality jobs, lower wages
• Encouragement to START a business can actually increase the informal economy
without the proper framework especially for WOMEN that tend to migrate to the informal
sector. Entrepreneurs face barriers and choose not to register.
• Once a worker is informal – very unlikely to move to formal and impacts life-time
earnings potential
• Move to formal economy can increase revenues, support entrepreneurs, increase
access to finance, enhance trade and competitiveness
ILO survey: “Job informality among youth reaches above 50% in Jordan and Tunisia,
while it is over 90% in Egypt and Occupied Palestinian Territories”

5. Private Sector needs to LEAD the growth
• Role of private sector in the region versus the state
• Each country in the region is specific and at different levels of development in
regards to the private sector (investment climate, trade openness,
competitiveness, promote diversification, legal frameworks)
• Role of a comprehensive private sector development framework of which
supporting business formation is one pillar – but the critical pillar. Needs to be
complemented by:
• Transparency and governance (despite efficient registration processes the
increase in enterprise creation will be slowed if the overall environment is not
conducive to investment)
• Examples of one-stop–shop and advances in supporting efficient registration
lead to greater private sector participation in economic growth

6. Youth and Women
• 12% of women in the Arab world are entrepreneurs – more than men. Many
are in the informal economy and tend to be small 1-2 people businesses.
• Labor force participation rate in MENA for women is the lowest in world at
21%
• Of those women in the labor force 18% unemployed (vs. 6% globally)
• In Algeria, Egypt, and Jordan, young women face unemployment rates
approaching 50%
• The public sector is the largest employer of women in the MENA region
• Supporting women in entrepreneurship or leading SME’s critical to
addresses the large numbers of jobs that need to be created (total at least 4
mn/year)

7. The Opportunity: Economic Growth and Business
Entry Rates
• GDP/Capita and domestic credit to private sector credit is linked to business
entry rates
• Increased productivity in economy due to increased numbers of firms,
competition, innovation, lower pricing
• Modernizing processes have positive impact even before implemented
• Entrepreneurship and SME formation increase GDP:
• Increase participation in the formal sector
• Leads to better governance and transparency if accompanied by
comprehensive framework
• Tax revenue base increases

8. Thank You