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The tremendous impact of COVID-19 is likely to be long lasting, paired with waves of young and increasingly educated populations that will continue to come of age and enter the labor force. It is time for the region to shake the sclerotic labor market and private sector and harness the economic potential of a growing, competent, ambitious labor force.

To address this huge, urgent challenge, this chapter provides new evidence of the need to focus on labor demand and lack of market contestability, which influence job creation through several direct and indirect channels.

To make markets more contestable, the governance model in the region should shift from one that supports the state’s role as a competitor in the private sector to that of a guardian of equity and welfare and from a governance model that favors politically connected firms to one that ensures a level playing field for public and private sector firms.

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Chapter 8: Governance, Migration, and Forced Displacement in the Middle East and North Africa

by Nelly Elmallakh