Promoting Economic Growth
A loan from a USAID-supported microfinance institution helped Iraqi entrepreneur Susan Abdul Razak Aziz rebuild and expand her Yasmn frozen food company. The company's revenues have soared by 30 percent, and Aziz now employs 19 people—70 percent of them women. (Photo: David DeVoss)
MIDDLE EAST BUREAU ECONOMIC GROWTH PROGRAMS
Egypt, Iraq, Jordan, Lebanon, Morocco, West Bank/Gaza, and Yemen
CONTACTS
James Walker
Senior Economist
Tel: (202) 712-4043
Email: jwalker@usaid.gov
Danielle Dukowicz
Economist
Tel: (202) 712-1782
Email: ddukowicz@usaid.gov
Overview
Unemployment and underemployment have been major factors driving the uprisings against governments in the Middle East and North Africa. Over one-fourth of young people in the region are unemployed. This high rate of unemployment is largely the result of slow economic growth and policies favoring elite supporters of autocratic regimes. Slow growth is caused by poor economic governance institutions and policies, as well as low rates of international trade and investment. USAID implements economic growth programs in the Middle East and North Africa to address these problems.
Programs
Building Strong Economic Policies and Institutions
Jordan is still recovering from the recession that began in 2009. To help the government strengthen its public financial management, USAID has been working with Jordan's Ministry of Finance to rein in or eliminate 22 high-cost or inefficient government agencies; collect tax arrears, focusing on the most feasible; expand simplified customs processes (the customs single window) to cover over 80 percent of imports; and develop Ministry staff’s data analysis capabilities for better macroeconomic management.
Supporting Small Business Development
In Lebanon, USAID helps small and medium enterprises in the agribusiness and tourism sectors to develop linkages with dominant firms and thereby increase their sales and export revenues. As a result of the project, targeted agribusinesses have achieved an 8.5 percent increase in domestic sales ($3 million) and a 4.7 percent increase in international exports ($1.5 million). In addition, the project created 570 jobs in agribusiness and tourism, and launched the Beyond Beirut non-governmental organization as a platform for rural tourism.
Improving Business Environments
A business-friendly environment is essential for private sector investment and growth. USAID has partnered with Egypt to reduce the capital required for new businesses, shorten the time needed to obtain construction permits, and create commercial courts to resolve disputes quickly. As a result, Egypt was recognized as a top reformer in the World Bank's 2010 Doing Business Report.
Like other countries in the region, however, Egypt's business environment still does not create enough job opportunities for its growing youthful labor force. Consequently, USAID launched a project to investigate the relationship between specific policies and the lack of private sector growth and job creation in the Middle East. For example, the project will examine economic policies that subsidize capital investments over labor, which result in economic growth with limited job creation. In addition, the project will focus on constraints to job creation, examining policies that favor only certain portions of the population, usually "elites" who are supportive of the ruling regime. It will also study government support of capital-intensive monopolies, state-owned enterprises (through contracts), and subsidized credit.
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