ABSTRACT
Two aspects of the problems of economic adjustment in the Middle East and North Africa (MENA) region have been highlighted in the recent literature. The first one relates to the slow pace of structural reform in the region compared to other parts of the world, e.g., Latin America, Central and Eastern Europe and even parts of Sub-Saharan Africa. The second pertains to the apparent lack of commensurate supply response in situations where limited economic reform has been introduced. This chapter is concerned with broad sectoral patterns of specialization and trade, and the constraints imposed by general levels of resource availability as well as by international trade agreements. The MENA economies are unlikely to be able to compete with the Asian economies in low skill manufacturing exports, once they lose their preferential advantages in the European Union's markets with the phasing in of the Uruguay Round agreement.
