World Bank President David Malpass
According to Malpass, the countries in the MENA region must focus on encouraging more investment to create jobs, increase output, and boost production. Image Credit: AFP

Dubai: The Middle East and North Africa (MENA) region needs innovative solutions, a new way of thinking, and the right institutions to tackle the unprecedented climate crises it is facing, according to World Bank President David Malpass.

“Current and future governments need to balance complex goals,” said Malpass. “For example, on energy: on the one hand, they need to provide reliable and affordable electricity to their people. On the other hand, they need to find low-carbon growth paths and provide a just transition for society to lower GHG (greenhouse gas) emissions.”

Speaking on Day 3 of the World Government Summit in Dubai, Malpass emphasised that this was an intricate balancing act in turbulent waters. “Governments need to act with impact through these complexities and create conditions for sustainable and inclusive growth.”

Malpass also pointed out that the world is facing difficult macroeconomic conditions, with slower growth in advanced economies, high inflation, currency depreciations, high fiscal deficits, and debt. “It will take hard work to reignite growth and productivity,” he said. These problems compound the already devastating reversals in poverty, health, and education, or in other words - crisis-facing development.

Sound policies

As a precondition to growth, Malpass urged governments to implement sound macroeconomic policies, including those on the monetary, exchange rate, fiscal, and trade fronts. “Stable currencies can facilitate private capital flows, FDI and trade,” he said. “Countries should promote trade facilitation and avoid protectionist measures such as the latest wave of export bans on food and fertilisers and the local content requirements that will impede trade.”

According to Malpass, the countries in the MENA region must focus on encouraging more investment to create jobs, increase output, and boost production, allowing growth in consumption. “This requires improving the business enabling environment and strengthening the rule of law,” he said. “Restrictions on FDI and corruption are key factors limiting the quantity and quality of cross-border investment.”

Malpass also stressed the importance of reducing business startup costs and strengthening property rights to enable business growth. “An important part of the effort to build efficient markets, particularly for the MENA region, is transforming state-owned enterprises to well-governed, market-oriented, and financially sound enterprises,” he said.

In addition, Malpass highlighted the need for countries to work towards better debt transparency and sustainability. “This is especially relevant for the rising share of poor countries that are at high risk of debt distress.” This month, the Managing Director of the International Monetary Fund Kristalina Georgieva and the World Bank President will be co-chairing a roundtable to push for faster progress in creditor committees, fair burden sharing among creditors, and debt restructurings that reduce debt burdens to sustainable levels that attract new investment.

Sustainability and climate development

Malpass insisted that governments need to integrate climate and development in ways that increase energy access and speed up the transition to lower-carbon energy. “This needs to be complemented by increased investment in climate adaptation,” he said. “Investments in infrastructure to enhance energy, resilience and efficiency in transport, water and housing can foster long term growth.”

Finally, Malpass said that the path to sustainable and inclusive growth in the MENA region requires technological leaps to propel greener growth, as well as the full utilisation of the economic opportunities from digital technologies. “For the digital transformation to be successful, we need trusted, quality and inclusive public infrastructure; accessible and affordable internet; and the development of digital skills,” he said.