Cross-sector collaboration could lead to almost $1 trillion in additional GDP for the Middle East and North Africa (Mena) region, a report showed on Wednesday.
Majid Al Futtaim, the UAE-based shopping mall, communities, retail, and leisure operator, launched its ‘Picking up the pace of change: Opportunities to accelerate economic integration across Mena’ report at the 54th Annual Meeting of the World Economic Forum (WEF) in Davos.
The report presents an in-depth assessment of the dimensions of free movement most able to influence economic integration across the region. By tracking four key metrics – the flow of goods and services, the flow of capital, the flow of people, and the flow of data – and assessing regulatory frameworks, trade and market structures, as well as initiatives designed to stimulate investments and trade against other regional blocs, the report highlights collaboration opportunities for private and public sectors to drive greater economic growth .
Leveraging the Mena economic integration barometer
This year’s data reveals that while intra-regional trade in Mena has grown significantly since 2016, it accounts for just 14 per cent of total global trade and 16 per cent of foreign direct investment. Approaching Asean’s benchmarks of 19 per cent and 18 per cent in these areas could potentially unlock an additional $9 billion in FDI for Mena. Additionally, the region must concentrate on developing regional talent and job creation, crucial for reducing the ‘brain drain’ to Europe and North America, while harmonising data regulations to enhance AI adoption and technology sector growth.
The research also analysed all major sectors of Mena’s economic activity to help decision makers pinpoint areas where opportunities for further economic integration could be unlocked first, and the food and retail sector stood out. Tapping into the sector’s potential, the report found, would require substantial private sector investment to increase the capacity of cross-border supply chains, particularly with cold-chain infrastructure – which was identified as the main hurdle.
Other sectors with the potential to bolster economic integration across Mena include technology; industry and manufacturing; and banking and financial services.
Ahmed Galal Ismail, chief executive officer at Majid Al Futtaim, said: “Despite facing global and regional challenges, the Mena region is seeing rapid growth and economic improvement. Yet, with its share of world GDP at 3.3 per cent falling short of its 4.2 per cent global population share, bridging this gap could unlock nearly $1 trillion in additional GDP, fuelling the region’s aspirations and boosting prosperity for its people.”
He continued: “The role of the private sector in driving regional growth is critical to the collective success of all who inhabit the Mena region. Our role in providing the innovation, investment, and entrepreneurship is essential for the region’s economic transformation. Together, working in partnership to uplift our individual and collective contribution, we will usher in a new era of sustainable growth and prosperity.”
The report marks the culmination of four years of research since 2020, the company first launched its economic integration initiative at the World Economic Forum’s annual meeting. It underscores the progress made since identifying three pivotal levers for boosting Mena’s economic integration: fostering competition through selective deregulation; enabling the free flow of goods, services, capital, and data for seamless cross-border trade and mobility; and harmonising market norms to reduce compliance costs for companies operating in multiple markets.
“It is our hope that we are able to bring together like-minded organisations, from across all sectors and industries to explore ways in which we can individually and collectively create an environment of common good, where what serves our organisations also better serves the communities in which we operate,” Ismail said.