IMF's Long Term Growth Prospects for the Middle East and Central Asia

Mitsuhiro Furusawa, Deputy Managing Director, IMF
Masood Ahmed, Director, Middle East and Central Asia Department, IMF
Uri Dadush, Senior Associate and Director of the International Economics Program, Carnegie Endowment for International Peace, and Senior Fellow, OCP Policy Center, Rabat Morocco
Hung Tran, Executive Managing Director, Institute of International Finance

Moderated by John Lipsky, Senior Fellow, Foreign Policy Institute

March 22, 2016

Leaders of the IMF's Middle East and Central Asia departments held a panel discussion at the SAIS Washington campus to launch a new report on economic prospects for these regions. "Avoiding the New Mediocre" considers the critical need for jobs and higher living standards that the relatively young populations of Middle Eastern and Central Asian nations are demanding.

Panelists shared their research on the impacts of the Arab Spring movement of 2011, which continues to drive changes throughout the Middle East as its proponents push for jobs, better quality of life, and greater inclusiveness.

Oil rich economies in the Middle East have historically depended on oil revenues and government spending as their main drivers of economic activity, but the current slump in oil prices is putting their relative high standards of living at risk. The oil price shock also factors heavily into the severe economic slowdown facing Central Asia countries – the region's worst recession in a generation.

The headwinds to long term growth will not disappear overnight, said IMF Deputy Managing Director Mitsuhiro Furusawa, but Central Asia and Middle East governments are responding with multifaceted reform agendas. Large and inefficient energy subsidies are being reduced or eliminated, which is freeing up resources that can be directed to growth-enhancing investments including infrastructure, education, healthcare, and targeted social assistance.

Panelists presented a wide range of structural reform recommendations for lifting the long term growth prospects of these regions. They also pointed out that careful prioritization will be needed in implementing reforms, because the economic vulnerabilities, security challenges, and sociopolitical tensions will complicate the policymaking environment.

Video available at https://www.youtube.com/watch?v=_StNx3AMZJ8.