High oil prices fuel 6.3% growth in Mena region

Dubai: High oil prices fuelled 6.3 per cent GDP growth in the Middle East and North Africa (Mena) last year, helping the region create new jobs, the latest World Bank report says.

"The Mena region is undergoing a remarkable period of high economic growth. In parallel with that growth, job creation has increased and unemployment has declined," the report said.

According to the report, GDP growth reached 6.3 per cent for the region in 2006 - up from an average of 3.6 per cent a year during the 1990s.

"In view of the rapid expansion of the labour force - the fastest in the world - this is a remarkable feat. The private sector is becoming the main source of new jobs as the share of domestic and foreign private investment increases. However, outcomes are uneven - not all countries are benefiting."

The private sector will be operating within the context of greater integration into global markets, it says. "This signal the emergence of new engines of job creation that, however powerful, may be volatile. It also points to the need for better education systems to prepare workers for a more competitive environment and safety net mechanisms to address the needs of those that may be left out.

"Overall, Mena countries have the opportunity to use the economic boom to advance their reform agenda."

This is the fourth year in a row of robust growth performance, driven by high oil prices, economic recovery in Europe and reforms that are broadly going in the right direction. As a result, many jobs have been generated, primarily by the private sector.

"Countries in the Mena region need to remove the remaining barriers that hinder the business environment for the private sector in order to maintain growth, increase private investment and generate more jobs" Daniela Gressani, World Bank vice-president for Mena, said.