Fostering Growth in the Middle East and North Africa
Chapter 8: Profiles of More Dynamic PSD Environments
8. Profiles of more dynamic PSD environments This chapter includes brief profiles of the six MENA-12 countries with above-average levels of private sector dynamism based on the categorization in Chapter 5. These are presented in the following order: Lebanon, Morocco, Jordan, Egypt, Tunisia and Turkey. THE CASE OF LEBANON Context for Private Sector Development The Lebanese Republic is a small, upper-middle-income country with an estimated population of 4 million, growing at a rate of 1.1 per cent a year, and 2009 gross domestic product (GDP) per capita (purchasing power parity – PPP) of US$14 266 (IMF 2010 database). Lebanon is a major service, transport and financial hub in the MENA region with a tradition of liberalism and a history of private sector domination. It is described as one of the Middle East’s most advanced economies (Holmes et al. 2008). Some indicators suggest that state involvement in the economy is rather significant. Government expenditures as a share of GDP averaged 36 per cent from 2002 to 2005, above the average for other upper-middle-income countries by a wide margin (EC 2005a). Progress on privatization has been slow and the process complicated by investor hesitation due to the unstable political situation (EC 2005a). Lebanon has the second-highest gross capital formation in the MENA-12 (about 31 per cent of GDP in 2008) and highest level of private capital formation (29 per cent of GDP), a dramatic increase over 2007. Private investment accounts for almost 95 per cent of the gross. The private sector share...
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