IMF MENA Monthly Update: Annual Meetings Recap

November 23, 2021/IMF

Welcome to this month’s edition of our Middle East and North Africa (MENA) newsletter, which follows our recently concluded Annual Meetings and the release of our Regional Economic Outlook (REO). This is a time of challenge for the region, but also one of great opportunity, and our discussions during last month’s meetings and our economic outlook focused on how countries can emerge from this crisis on a path toward a transformational recovery.

It was great being back in the region, where we held our first public outreach events since the pandemic began. The visit included our first in-person REO event since the beginning of the crisis, focusing on the impact of the pandemic on labor markets and the corporate sector. I also had a lively and interesting discussion with the students of NYU Abu Dhabi. I’ll have more to say on this and other aspects of my trip in our next newsletter. In this edition, I’ll highlight key REO findings, my takeaways from the Annual Meetings, as well as more news on the Fund’s work in the MENA region.


Jihad Azour, Director

IMF Middle East and Central Asia Department

The 2021 Annual Meetings

The 2021 Annual Meetings of the IMF and World Bank, which took place last month, were another great opportunity to bring together central bankers, ministers, parliamentarians, private sector executives, civil society organizations, and academics from across the MENA region to discuss the global and regional economic outlooks and most pressing issues affecting the region. This year’s discussions focused on the region’s recovery and emerging challenges, as well as on important issues like climate change, digitalization and informality. You can learn more about the Annual Meetings’ events here.

The IMF’s Managing Director, Kristalina Georgieva, held a meeting with the region’s finance ministers, central bank governors, and heads of regional financial institutions to discuss the region’s climate challenges and how to address them. There was consensus on the urgency of tackling climate change, and the meeting was an opportunity for countries to share their policy plans in the areas of adaptation, mitigation, and transition risk management. I was encouraged to hear that several countries are already taking action. Participants also expressed views on how the IMF can be most useful in supporting the region’s efforts. The upcoming paper from our department on climate change, which is set to publish in January, will provide further insights and guide our climate work going forward.

In addition, the customary meeting with the region’s central bank governors focused on the role of digital money, a topic of broad interest. Discussions covered the opportunities and challenges of digital money and how these should be managed. Governors debated also on the implications of digital money for financial stability, and the way regulatory frameworks should adapt to these new realities and facilitate progress. The crisis has provided the impetus for many MENA countries to make progress in this area, and the IMF stands ready to support these efforts and to collaborate further with regional institutions.

The Regional Economic Outlook (REO): Tradeoffs Today for Transformation in the Middle East and North Africa

Following an unprecedented contraction in economic activity last year, the recovery is underway despite resurgent pandemic waves, with growth projected at 4.1 percent this year and next. However, many countries will face difficult policy tradeoffs, with new emerging challenges, such as rising inflation, reduced policy space, and increasing inequities. But, the aim is still to make this recovery a transformational moment for the region by building inclusive, resilient, and greener economies. Hence the title of “Tradeoffs Today for Transformation in the Middle East and North Africa” for the October 2021 REO, which you may read here.  



Indeed, the crisis presents opportunities that could lead to this transformational recovery. Leveraging global trends, such as the use of digital technologies, will help improve the efficiency of social safety nets and ensure the region stays competitive globally. Investing in climate-resilient technology will be key to addressing the global existential crisis while also creating new job opportunities. In addition, reducing the role of the state through a thorough revaluation of the role and objectives of state-owned enterprises and their governance is critical to promote private sector innovation and growth.

Watch this video to learn more about the report’s key findings and IMF policy recommendations for the MENA region. You may also watch our press briefing where I answered journalists’ questions from across the region. 

Two critical challenges for the region were addressed by the REO’s analytical chapters: the pandemic’s impact on labor markets and the corporate sector. Our report discusses a range of policies to tackle job creation and informality challenges, with the unemployment rate rising to 11.6 percent in the MENA region, far exceeding levels seen during other recent crises. Meanwhile, the region’s corporate sector has recovered to pre-pandemic levels, but smaller firms and those in contact-intensive sectors are lagging behind. Our report shows how the pandemic has affected firms in the region and vulnerabilities going forward. It also discusses policies that countries could consider for boosting the sector’s recovery.


MENA Webinar: The Road Ahead to Recovery

A panel discussion, moderated by CNN’s Becky Anderson, focused on the MENA region’s emerging challenges, but, most importantly, the potential and opportunities ahead to secure a transformational recovery. I was joined by Monica Malik, Abu Dhabi Commercial Bank’s Chief Economist; Badr Jafar, Crescent Enterprises’ CEO; and Sherif Kamel, Dean of The American University in Cairo’s School of Business. Discussions addressed ways to empower the private sector, the changing role of the state, and opportunities that could emerge from accelerating the adoption of digital technologies in the post-COVID world.

You may watch the full webinar here.

A Closer Look at North Africa’s Informal Economy


What is the cause of ‘excess informality’ in North Africa? IMF staffer Hippolyte Balima looked at possible answers to this question in this presentation. He suggested that in addition to structural and socio-economic characteristics, informality in North Africa also reflects the existence of a few policy distortions, such as low quality of governance, limited access to finance and a relatively high tax burden. While reducing informality will require continuing to invest in human capital and structural transformation, addressing these policy distortions will contribute to lower “excess informality.”   

“The Moral Outrage” of Vaccine Inequity

The IMF’s Managing Director led a panel discussion that looked at the pandemic’s impact on fragile and conflict-affected states, which entered the crisis with little to no fiscal space. Indeed, the eight MENA fragile and conflict-affected states have seen a dramatic downturn from the COVID-19 pandemic, given their limited health care capacity and policy space, which aggravated further their existing economic and human challenges.

In a keynote speech during the event, United Nations Secretary-General António Guterres highlighted the need to address the “moral outrage” of vaccine inequity and growing disparity. He highlighted three areas of action for fragile and conflict-affected states: expanding liquidity, including through a substantial reallocation of Special Drawing Rights, and helping countries address mounting debt; strengthening social support systems and job creation; and a strategic partnership among international organizations to help countries in need.

To learn more about IMF’s role in helping fragile and conflict-affected states, we invite you to watch this very frank and dynamic discussion.

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