The Financial Crisis, Recovery, and Long-Term Growth in the Middle East and North Africa
and regulations, as they appear “on paper,” are applied consistently and predictably in MENA. The same surveys also show that regulatory policy uncertainty, unfair competition practices, and corruption often appear as top constraints to businesses. The challenge is to enable a new generation of entrepreneurs to emerge, to create dynamic firms that can compete on the basis of productivity and that are efficient enough to export even advanced products to the rest of the world. It is important that this new generation sees evidence that businessfriendly policy reforms will benefit them as well—and not just a minority of privileged or connected individuals. Institutions need to be reformed to implement private sector policies equitably and consistently. For a real improvement in the business environment in the region, transparency, accountability, and quality of service in public agencies interacting with firms should be at the core of reform. There are some regional examples where this has begun to occur, such as customs reform in Morocco and Tunisia and the one-stop-shop for investors in Egypt’s General Authority for Investment (GAFI). More transparent and computerized processes, strong incentives for agency staff members to improve the quality of service to investors, and limiting of the points of interactions with public servants (thus limiting opportunities for discretion) have allowed GAFI to reduce delays for business registration at its Cairo offices from 34 days to 3. Streamlining also eliminated some 40 procedures. Business registration increased dramatically thereafter. To be sure, such institutional reforms will need to expand to other agencies for their impact to be felt. The private sector also has a responsibility—and an important role to play—within this agenda. Too often, its voice has been dominated by proponents of the status quo in order to maintain their privileges. But the world is changing. Already, a new generation of entrepreneurs is emerging in MENA. Their ability to influence the future direction of reform will be crucial. For this, the private sector needs to be better organized and more inclusive. It needs to be a stronger partner with governments in developing, implementing, and evaluating reforms. Skeptics voicing doubt that the private sector will succeed in generating needed jobs and growth are legion in the region and elsewhere, and the global financial crisis may have added to this skepticism. However, the lessons of past crises as well as the current one support the core
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