« It would be a mistake if the economic reform process underway in the Middle East and North Africa were to be thrown into reverse,” said Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF).
In an article entitled: “Economic Growth and Fairness in the Middle East and North Africa” published on the IMF blogs site, the official said rising social tensions and protests in several countries across the region “are a clear indication that the aspirations of the people of the region—for opportunity, prosperity and equity—remain unfulfilled.”
A few days before the regional conference that the IMF is organising—jointly with the Arab Monetary Fund, the Arab Fund for Economic and Social Development, and the Government of Morocco—in Marrakech on “Opportunity for All: Promoting Growth, Jobs, and Inclusiveness in the Arab World,” Azour pointed out that frustration of peoples in the region is understandable.
“And precisely because of that, it would be a mistake if the economic reform process currently underway were to be thrown into reverse,” he also noted.
He added that reforms are the key to address the fundamental problems that have plagued so many countries of the region for so long—low growth, high unemployment, and corruption.
Azour’s remarks are part of a series of statements by IMF officials following protests in Tunisia against reforms under the 2018 Finance Act and accusing IMF to want to impose austerity in Tunisia without taking into account the vulnerable groups.
According to the official, governments should ensure they are socially balanced and properly phased; above all, they need to deliver on the promise of a better life for everyone, but especially the poor and vulnerable.
“In the programmes it supports, the IMF has also been paying increasing attention to protecting the most vulnerable from tax increases and spending cuts,” Azour recalled.
Citing the example of Tunisia, he said “the government expanded the low-income cash transfer programme, doubling the number of families and tripling the average transfer amount; overall social spending is monitored through a spending floor in the IMF-supported programme, he also indicated.
Throughout the region, the IMF has advocated the reduction of costly energy subsidies because these subsidies mainly benefit the better-off in society, Azour stressed, adding that At the same time—importantly—the IMF has strongly advised against cutting food subsidies, for example, for bread in Jordan and Tunisia.
He, in this regard, pointed to the failure of the model of state patronage adopted for decades by many countries where the public sector supports every fifth job.
“Not only has this failed to improve the quality of public services such as health and education, it has also dramatically reduced the scope for governments to fund social programmes aimed at vulnerable populations and much-needed infrastructure investment,” he also underlined.
In his view, the reform priorities include reducing corruption, promoting fair competition, investing in talent—particularly the young—for the new economy by modernising education and training, and helping them find jobs.
These also include ensuring opportunities for all through equitable and growth- promoting spending, fair taxation and strengthening women’s legal rights.
On the Marrakech Conference, the official said it will help discuss with policymakers, the private sector, and civil society how to do more to put an inclusive growth agenda into action.
“The task is urgent. Indeed, the broad-based current global economic upswing offers an opportunity—in the region and elsewhere—to make headway on long overdue reforms,” he also indicated.
He added that reversing, or even delaying reforms would be the wrong option and continue to hurt future generations. “So we need to ensure that reforms continue and are applied equitably, with due regard to their social implications, and phased in gradually to the extent that available resources and macroeconomic conditions permit.”
TAP
