Over the next two years economies in the Middle East are set to grow at twice the speed they did last year, but diversification and job creation need to increase, according to the International Monetary Fund.
The IMF is based in Washington and expects to see increases of 4.2 per cent in 2010 and 4.8 per cent in 2011 for the Mideast region that includes 22 countries ranging in location from North Africa to Pakistan.
These forecasts compare with the 2.3 per cent growth the Mideast experienced last year as falling oil prices and other ramifications of the worldwide financial crisis were felt.
In a recent outlook report the IMF stated that a “generally robust recovery” is happening within the region mainly due to increased oil prices and timely government policies that have diminished the negative effects of the global crisis.
Increasing oil prices will create a combined $150 billion surplus in the current accounts of Gulf nations and other exporters of oil in the region. This is a substantial increase from the $70 billion surplus of 2009 and creates more spending freedoms.
Outside of the energy industry growth is not as aggressive. The IMF noted that nations dependent on oil exports need to diversify and reduce that dependence. Also they need to address other issues that came out during the economic crisis, including the large debt being carried by companies in Dubai linked with the government.
Other countries in the region that import oil, those that tend to be much poorer and dependent on tourism and trade, are forecasted to experience 5 per cent growth in 2010. This forecast is up from 4.6 per cent last year and these nations are often dependent on worker remittances from the wealthier neighbouring countries.
According to the IMF, when looking at a per capita basis the growth in these nations is lagging behind other regions in the developing world.
That slower growth is creating challenges for the job creation necessary within their young and quickly growing population. Unemployment in these areas is consistently averaging around 11 per cent.
The IMF estimates that in order to create work for the unemployed and those soon to enter the workforce these nations should see growth of 6.5 per cent. That amount of economic growth would create about 18 million positions in the oil-importing Arab nations alone.
Oil exporting nations included in the IMF report are Saudi Arabia, the UAE, Iran, Oman, Bahrain, Qatar, Kuwait, Algeria, Iraq, Libya, Sudan and Yemen. The oil importing nations included in the report are Pakistan, Tunisia, Jordan, Lebanon, Egypt, Djibouti, Afghanistan, Morocco, Mauritania and Syria.Paul Holdsworth, Staff Writer, Gulf Jobs Market News