Private Sector and Enterprise Development

Private Sector and Enterprise Development

Fostering Growth in the Middle East and North Africa

Lois Stevenson

This important and well-researched book examines the challenges to private sector growth in twelve Middle East and North African (MENA) countries, assessing comparative performance against a number of indicators and focussing on the special role of SMEs and entrepreneurial activity.

Chapter 3: Economic Growth Challenges

Lois Stevenson

Subjects: development studies, development economics, economics and finance, development economics, social policy and sociology, migration


During the first decade of the 21st century, governments in the MENA-12 economies have become increasingly engaged in creating the conditions for private sector growth. Some have achieved more progress in doing this than others, but in all cases the private sector remains underdeveloped. Given the trend towards greater liberalization and openness, a diminished role for the public sector in economic activity and employment, and the need to improve the standard of living for citizens, the impetus for accelerating further development and growth of private sector-led activity continues to be strong. In this regard the MENA-12 face a number of major economic and social pressures and challenges. Seven are identified as being the most salient: 1. 2. 3. 4. 5. 6. 7. the job creation and employment challenge; the informal economy challenge; the education, skills and knowledge challenge; the science and technology (S&T) and innovation challenge; the world economy integration challenge; the gender challenge; and the micro, small and medium enterprise (SME) and entrepreneurship challenge. The first six of these challenges are elaborated in Chapter 3 and the SME and entrepreneurship challenge in Chapter 4. It should be noted that this set of challenges is very much interrelated, one influencing and affecting the other. JOB CREATION AND EMPLOYMENT CHALLENGE One of the most compelling challenges in MENA countries is employment creation. The 2002 Arab Human Development Report (AHDR) states that this task is probably more formidable in the Arab region than in any other region in the world (UNDP...

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