Chapter 5: The Sustainability of Economic Reform: Governments, Social Contracts and Marginalized Groups
5. The sustainability of economic reform: governments, social contracts and marginalized groups Private sector growth is key to enhancing the growth momentum. Macroeconomic stability will continue to nurture the private sector as an engine for growth. Recent tax and trade reforms, and continued reforms to reduce red tape and bureaucratic constraints are all serving to increase the contribution of the private sector to the economic recovery. Government of Egypt, Ministry of Finance, March 2008 Over the past two decades the approach of Arab Middle East governments to economic management has been transformed, at least at the conceptual level and often in practice as well. All Arab Middle East governments publicly espouse similar commitments to the core principles of economic reform and good governance. They enthusiastically describe their record in the introduction of measures to address economic underperformance. Governments acknowledge the need to attract investment, improve competitiveness and productivity and significantly increase exports to achieve sustained economic growth.1 To sustain their competitiveness as a destination for foreign direct investment they have been forced to decide their priorities in the allocation of energy resources between exports and investment partners, industrial development and domestic consumption. Public infrastructure is being expanded or refurbished, and in some areas, privatized. Governments are more attuned to the requirements of modern financial and business management, even if they still have a long way to go in terms of transparency, accountability and delivering the benefits of reform across the community as a whole. It remains to be seen however...
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