Ferid Belhaj, Vice-president for MENA, World Bank : Interview

Ferid Belhaj, Vice-president for MENA, World Bank

Ferid Belhaj : Interview

What more can be done to support inclusive economic growth in the Maghreb?

FERID BELHAJ: In spite of moderate growth in recent years, unemployment remains high in the Maghreb, at around 13.5%, according to the latest figures from the International Labour Organisation. It is especially high among young people, at 32.8%. Jobs often come from newly created enterprises. Developing entrepreneurship in the region is therefore an avenue for job creation, hence greater inclusion and economic development.

Entrepreneurship ecosystems in the Maghreb are underdeveloped, however, and a concerted effort is required to address obstacles for current and future entrepreneurs. The region’s economies will not prosper unless businesses that aspire to take risks and grow can succeed. The most effective government policies will employ a bottom-up and holistic approach based on consultations with an array of stakeholders. Furthermore, their focus needs to change from supporting broad-based entrepreneurship to more targeted policies aimed at innovation and developing growth-oriented firms. To ensure that the youth bulge is translated into an asset, Maghreb countries should pursue a two-way strategy. On the supply side this should include investment in human capital, especially in training and developing skills of the youth that the job market currently seeks, including in areas such as technology. On the demand side there is a need for a sharp increase in job creation, which could be achieved through economic diversification. Adopting business-friendly policies that help to strengthen the non-hydrocarbons sectors is imperative.

How can trade be boosted among Maghreb countries and sub-Saharan Africa?

BELHAJ: Although trade increased for Maghreb countries during the 2000s, this has not translated into deeper intra-regional integration. Trade across countries remains low, while market and product concentration levels are still high. We see a lot of potential for fostering trade across the Maghreb as well as with sub-Saharan Africa, and have welcomed recent regional free trade agreements. The effective implementation of these agreements could translate into important efficiency gains for member countries. To develop levels of trade within the region, various measures should be implemented, including improvements in the regulatory framework, trade facilitation and export training programmes. Improving the regulatory framework would imply improving transparency on all measures and regulations in each trade area, as well as enabling cross-border digital payments. This should be done through discussions among stakeholders to reach consensus on improvements and an implementation schedule. Existing regional trade agreements could act as coordination mechanisms. A second axis would be to develop firms’ ability to become exporters or expand their exports, for example through measures providing training and access to finance. This could be implemented through private sector organisations, chambers of commerce and export promotion agencies. A third axis would be to facilitate the movement of goods by harmonising border procedures and reducing the costs of connectivity.

To what extent could private companies support Algeria’s diversification strategy?

BELHAJ: The Algerian private sector has a key role to play in securing the future of the country. It is the only sector that can create jobs in a sustainable way in non-extractive sectors, and therefore support diversification. To be able to do so in the long term the private sector will need to benefit from a better business environment. Algeria must successfully implement a strategy that is based on improved competition, gradually withdraw from the productive sphere, open trade, develop more efficient sector policies and create an enabling environment for entrepreneurship.

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Cover of The Report: Algeria 2018

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