Policy Contribution Issue n˚02/21 | January 2021 Economic crisis in the Middle East and North Africa Marek Dabrowski and Marta Domínguez-Jiménez Executive summary In the 2010s, the economic situation in the Middle East and North Africa (MENA) Marek Dabrowski deteriorated as a result of lower oil and other commodity prices, a new round of domestic (marek.dabrowski@ political instability, continuous intra-regional conflicts, stalled economic and governance bruegel.org) is a Non- reforms and, finally, the COVID-19 pandemic. Resident Fellow at Bruegel, a Professor at the Higher The growth of real GDP, which slowed after the global financial crisis of 2008-2009, School of Economic in further decelerated in the second half of the 2010s and became negative in 2020 as result of Moscow, and a Fellow at the COVID-19 shock. Fiscal balances have deteriorated, even in the oil-exporting countries, CASE - Center for Social and and public debt has grown rapidly. Economic Research MENA countries continue to face numerous long-term socio-economic and institutional Marta Domínguez- challenges including high unemployment (especially youth unemployment), low female Jiménez (marta. labour-market participation rates, the poor quality of education, costly and ineffective public
[email protected]) sectors, high military and security spending, high energy subsidies and trade protectionism. is a Research Analyst at Only comprehensive long-term reform programmes can address these challenges. Bruegel The European Union is MENA’s second largest trading partner after the region itself, and The authors thank Maria is one of two main sources of foreign direct investment and a major aid donor.