Policy Innovations The central address for a fairer globalization

A publication of the Carnegie Council

The Arab Economies in a Changing World

By Marcus Noland, Devin T. Stewart

Peter G. Peterson Institute for International Economics, April 16, 2007

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Devin Stewart interviews Marcus Noland about his forthcoming book, The Arab Economies in a Changing World. Noland and coauthor Howard Pack estimate that sustained 5 percent growth rates will be necessary to create jobs for the region's growing labor force. If this growth is managed well, the so-called demographic timebomb could yield a demographic dividend of dynamic young workers. Recent growth has been dependent on high oil prices, and therefore not evenly distributed across the Middle East.

Trade agreements are one tool to spur development in the region, but they are not a substitute for internal reforms where microeconomic barriers often discourage entrepreneurs. With the U.S. reputation in tatters in the region, multilateral channels become a more appealing means of engagement. The hope for the region's peoples is to avoid a downward spiral of political repression, instability and deterred investment, slow growth and rising unemployment, resulting in social tension and more repression.