ABSTRACT
MENA economies face a number of difficult challenges. Keeping economic growth rates sufficiently high to create millions of new jobs every year for younger generations entering the labor market, as well as to reduce high rates of unemployment, is certainly the most pressing among them. By the World Bank (2003a) estimates, the number of new entrants to the labor force will average 4.2 million a year during the first decade of the 2000s, twice the annual average for the previous two decades. High growth rates, together with improvements in distribution of income, are also necessary to cut down on poverty and hence to minimize the risk of social unrest and political instability. The region already has a long history of turmoil and domestic and regional conflict and since it sits on major oil reserves, such conflicts in the region always have the propensity to create repercussions for the whole world. As such, MENA is a region where increased stability and welfare is most desirable for global stability and prosperity. Maintenance of high rates of growth is therefore considered necessary for both regional prosperity and global stability. Yet, the growth performance in most of the MENA countries has been intermittent over the past decades, especially after the 1970s.
