[Colleen Gorove-Dreyhaupt] Good afternoon and good evening, and welcome to this special event on the World Bank's recent Middle East and North Africa economic update entitled “Shifting Gears the Private Sector as an Engine of Growth in the Middle East and North Africa.” My name is Colleen Gorove-Dreyhaupt. I am the Manager of External Affairs for the Middle East and North Africa region at the World Bank, and I will be moderating this event today which is being broadcast on World Bank Live. I would like to welcome our viewers from around the world who are watching this live stream in Arabic, French and English. I would encourage everyone to take part in the conversation using the #MENAUpdate on Facebook, LinkedIn, YouTube and X. To start our program today, I would like to turn to the World Bank's Vice President for the Middle East and North Africa region, Dr. Ousmane Dione. Ousmane, over to you.

[Ousmane Dione] Thank you Colleen. Welcome everyone to the launch of the April 2025 MENA Economic Update Shifting Gears. First let me warmly thank Caroline and Omar for being with us today to share their valuable insights. And of course, none of this would be possible without Roberta and her outstanding team. Thank you for your hard work and dedication in bringing this report to life. Given the ever-changing economic landscape in the world and in the MENA region. The launch of this report is always a much anticipated moment for good reasons. It gives us not just a snapshot of where the region stands today, but also a sense of where we could go. This time, three messages stand out clearly. First, the macro outlook remains shadowed in uncertainty, especially as global policy dynamics continue to shift. Second, the MENA region remains far from the global frontier in terms of living standards. There is enormous potential to close the gap by having a dynamic private sector in MENA which we know is critical to job creation. And third, to unlock the potential, we need to boost the private sector by rethinking the role of government, and encouraging businesses to better harness talent in the region. These terms cut to the heart of the region's development story. They take on even greater urgency against the backdrop of the challenging regional context. One shaped not only by economic pressure, but also by geopolitical uncertainties. The MENA region's economic trajectory is shadowed by these ongoing challenges and fragility. While we are witnessing some positive signs, the situation remains delicate, and deep structural challenges persist amidst global uncertainty. On the positive side, I see reasons for measuring optimism. Our economic forecast moderate acceleration of growth in 2025 and 2026. But realizing that potential of high growth for the region will depend on our ability to navigate risk and advance much needed reforms to create better opportunities for people. The MENA region struggles with low standards of living, and that much of this is explained by low productivity. A dynamic private sector is essential to boost productivity indeed. So this report cannot be more timely and this is where I’d like to focus my remarks today. We have said it repeatedly. Businesses are the engines of innovation and job creation. At the World Bank we are deploying our knowledge, finance and technical assistance to support countries with the overriding priority of creating more and better jobs for people. This is a goal shared by all countries at all income levels. Jobs are more than just a livelihood and means to promoting growth. Jobs foster social equations and afford dignity to individuals and their families. When talking about jobs in MENA, the private sector is particularly crucial. By 2050, nearly 300 million young people will be looking for jobs in MENA. We know that this job will not be found in the public sector alone. So the pressing question is, can the private sector create the number of jobs needed to allow countries to tap into the amazing potential young people bring? This diagnosis from this report indicates that in MENA, there is significant room for improvement in the private sector. Our chief economist Roberta Gatti and her co-authors suggest that unlocking the MENA private sector as an engine of growth requires the government to rethink their role in markets. And firms need to harness talent more effectively. So let me emphasize one key point when it comes to talents, and that’s the role of women in the workforce. Many talented women have been left out of the labor market in the MENA region. Our region also holds the world's lowest female labor force participation rate at a sterning 19%. One way the private sector firms can harness the untapped talent of women is by attracting more women business leaders. Like the rest of the world, firms in MENA managed by women are more likely to hire more women. The share of women workers and businesses run by women are almost twice as high as in businesses run by men. This represents a transformative opportunity. We will dive into this issue and more in the discussion today. Now it is my pleasure to turn to Roberta Gatti to share the findings of this excellent report. Roberta, the floor is yours.

[Roberta Gatti] Thank you Ousmane for the kind introduction to the report. Let me now share the slides to start the presentation. Can you see it already? Very good. So, good afternoon, everyone and thank you for the opportunity of being here and presenting the findings of the April 25 MENA Economic Update which is the product of the Chief Economist Office of the MENA region and this time around was led by Asif Islam, with a team composed of Harun Onder, Jesica Torres, Gianluca Mele, Federico Bennett, Sumin Chun, Rana Lotfi, and Ilias Suvanov. Let me start with the macroeconomic outlook. Let me begin with something that I know has occupied our minds in the past month, which is Uncertainty. So what you see here is an index of global economic policy uncertainty and you can note the spike in economic policy uncertainty in the past month starting January 2025, spiking to levels globally that are only at par with what we saw during the pandemic. If we break down economic policy, by its components, as you can see on the right in this graph, all of these components have an increase starting from December 2024, but really that spike is driven by significant increase in trade policy uncertainty, which has increased to 60 fold and that is 6-0, 60 times between September 2024, and March 2025. Markets have taken notice, and let's focus here on oil markets which are very relevant for the region such as MENA. So what you see here in this graph is the spot price for Brent Crude in the black line, and you can see for example that in the first week of April oil prices took a drop of more than $10 and that was just in one week, and you see the expectation of oil prices are lower as depicted in implied prices based on future contracts signed in January 2025 and that is the blue line above and the implied prices based on future contracts signed in April which is the redline below. Global policy uncertainty really casts a long shadow on the outlook of the region. The region grew at a low but steady rate between 2023 and 2024. And what we expect for 2025 and this is based on the work of all our countries’ economies is a small uptick in growth so that the region is expected to grow at 2.6% for 2025. However, we also see significant downgrades from the forecast that we made in October 2024. Our region is very heterogeneous, and it is important to unpack these aggregate numbers into the different groupings of countries that we have in the region. Let's start with oil exporters and you see on the left our real GDP growth for GCC countries and in the center here real GDP growth for the developing oil exporters. There are two forces at play here, one the expectation of lower oil prices. Two the counter betting forces of expanded quantity as per the announcement of OPEC plus. This results in an uptick of growth for GCC countries that are expected to grow at 3.2% but a downshift in growth for 2025 for developing oil exporters. In GCC countries not only oil prices and quantities play an important role, but also growth is sustained by increasing efforts in diversifications which are starting to pay off. In the case of developing oil exporters, some of this dropping growth of the significant downgrades that you notice here between the forecast in October 2024 and the forecast now are also linked to idiosyncratic elements to the economy of Iran. If we think about developing oil importers, expected low oil prices end up being a positive shock and also we expect a better season for agricultural output in countries such as Morocco and Tunisia which have undergone years of drought, and also increasing consumption in a country like Egypt on the back of these monetary conditions and lower inflation. However, we spoke about uncertainty and trade policy and how trade policy uncertainty is paying out on the global scene. So we thought it might be useful to unpack what are the channels of impact of trade policy uncertainty vis-à-vis our region. Let's start with trade, so what you see here is a graph of export as a percentage of GDP across our countries in the region. Just at first glance, our region seems to be more integrated in global markets than the typical emerging and developing economy you see in the EMD countries on the left. However, oil and gas take the lion share of this integration with the exception of countries such as Morocco, Jordan, Tunisia, to some extent Oman, Bahrain, and the United Arab Emirates which export quite a significant share of manufacturing. So if trade policy uncertainty results in decreased demand from trading partners this can impact both oil and manufacturing exports for what concerns manufacturing exports, countries whose experts are concentrated in just a few products or just a few destinations tend to be more vulnerable to sector in country specific shocks who were less able to sort of buffer them. Besides trade there are also other economic channels and we already spoke about the importance of oil in our region, so an expectation of falling oil prices that might be the result of decreased global demand could put fiscal pressures and dampen economic growth in oil exporters but would result in a sort of improved terms of trade for oil importers. Although these will enjoy lower remittances coming from oil-rich countries. Disruptions in global value chains can also play a role and some of our countries particularly Morocco, Jordan, Tunisia are quite plugged in global value chains although mostly were sort of backward linkages. Inflationary pressures from higher import prices and disruptions in the supply can play a role and countries will need to think how to best navigate the trade-off between resilience and efficiency in production. Moreover, uncertainty has an impact in and of itself, it is connected to the investor sentiment, it can be connected to lower investment and also to low reduced capital inflows. These are some channels that can already play out in the short term in our region, but in the medium and longer term, reorientation of trade can also play out globally and to some extent benefit our region because of its proximity to large markets such as the EU and its untapped potential for exports. Now, to the global policy uncertainty, the continued fragility in the region overlays another layer of uncertainty, we see that there are prospects of peace and recovery continue to be precarious, notwithstanding some positive developments such as the formation of a new government in Lebanon and the change in the political situation in Syria where however we still predict a small contraction for 2025. When we turn to the conflict in the middle east facing Gaza, in addition to the dramatic human toll we also see a devastating economic outcome, economic activities almost halted in Gaza and there also is a significant drop in GDP in the West Bank. The spillovers of the conflict continue to persist and here's just an example. The projected uptick in the Swiss canal activity which is maritime trade has not yet materialized. This continues to have implications for revenues for Egypt. Now, the loss of life and the suffering of people affected by conflict really goes beyond numbers. But if we just focus on economics, economics have defined conflict development in reverse and I think this is really true for our region because in the past decades fragility has increased and economists have estimated that GDP per capita in the countries that have been affected by conflict in the past two decades could be 45% higher had conflict not occurred. 45% is a large number and it's equivalent to 35 years of development. This is something that gives us pause and really points at peace as a key precondition for growth. Conflict is intertwined in the manner with history of low chronic growth and low chronic growth has resulted in low standards of living. Ousmane has already pointed at this in his introductory remarks and the region's GDP per capita stands at 25% of the GDP in the frontier economy. Much of this gap is due to low productivity. So what can bridge that gap, can the private sector of MENA reverse this trend of low standard of living and be an engine of productivity, innovation, and innovation and growth. So let me shift gears here and move to shed light on some analysis of the state of the private sector in this region and then reflect with you on some of the constraints that we see on the policies looking forward. Let me start from the analysis of the private sector. This is based on the World Bank enterprise surveys which cover firms of five and more employees in the manufacturing and service sectors in the formal economy. And this is very important for how we will think about the private sector in MENA as we go along during this presentation. But what comes from this analysis is that productivity is low and definitely below the productivity that we see in compares. And investment in physical capital and human capital is proxied by formal training of employees is also low. And this goes together with low innovation which means really low investment in research and development, low introduction of product innovation and low introduction of new processes of production. So I mentioned this is a quick overview of the formal sector within the private sector but the informal sector is large. According to the latest labor force surveys anywhere between 40 to 80% of employment is informal. And according to simulations from computational general equilibrium models the output in the informal sector in the region is between 10 to 30% of GDP. So already we see that there is a larger formal sector which is however not very productive. Where does this happen? It happens also in the informal firms but not only, but we know much less about how much of the production happens in informal firms. According to older data, anywhere between 50 to 80% of firms in the region are informal. But actually we know very little only in two countries we have surveys of informal firms these are Egypt, and Iraq, and what we've learned there is that informal firms tend to be smaller than formal firms maybe this will not come as a surprise to you but also we see that some informal firms perform on par in terms of productivity with formal firms. This is very interesting. That means there is a lot of heterogeneity among informal firms and this is something that deserves being studied more and better. However data are scarce and the scarcity of data not does not only refer to the informal sector but also spills over to the formal sector. Researchers and policymakers need census or administrative administrative registered data at the firm level to be able to really understand what happens in the private sector. So I will give you just a couple statistics to give you a sense of how much data poverty affects the private sector and the understanding of the private sector in MENA. Only two countries those are Morocco and Tunisia we have the possibility of studying complete firm dynamics, this means understanding which are the firms where productivity grows, and what is known as the within effect in the literature whether these firms the more productive firms take larger market shares which is known as the between effect in the firm growth literature and even understanding who enters and exits these markets. This data poverty reflects into the possibility of research on firms and the private sector. So we applied machine learning with an algorithm on a database of 11 million research papers and out of these text analysis we can only find about 800 that were focused on the MENA region and the firms and even among these 800 that our TTLS actually looked at one by one, we found that the presentation of MENA is primarily through large firms that are publicly listed which are not really representative of the much broader and much more complex texture of the private sector in the region. Now I gave you a sense I hope of a quick diagnostic of the private sector in the region but if we see low productivity, why do we see that low productivity and what can be done? Let me turn first to the role of government, and governments can interact with markets in many different ways. Let's start with state owned enterprises which are prevalent in the region and by some estimates account for 20 to 50% of the share and value added in the region. That's a lot. And from our analysis, state owned enterprises play a dominant role in sectors such as let's say construction that are typically served by the private sector in other economies. Why is the presence of state owned enterprises problematic for productivity in MENA? That is the case because often state owned enterprises do not compete fairly with the private sector. They enjoy regulatory exemptions or concessional credit. What needs to be done is really a set of reforms that not only provide a clear rationale for why state ownership should be there in some sectors but also separate the state’s role of shareholder policymaker and regulator and importantly guarantees competitive neutrality between the public and the private sector. Now, the presence of state owned enterprises is not the only way in which governments interact with markets because governments also shape the business environment where firms operate through their regulations. As we pointed out in previous applications, MENA really suffers a bit of a governance deficit and firms report that political instability, perceived corruption and business permits and licensing are major constraints to their operation. What needs to be done simplify have more certain regulation and implement it also with certainty something that can really improve the quality of the business environment. But for those of you who have followed the debate around interaction between governments and the private sector they will not, they have noticed the increased debate in the policy arena but also in research on industrial policy. Now getting industrial policy right is really no feat because it requires a lot of capacity. Technical capacity to identify and address the right market failures, institutional capacity to implement industrial policy credibly and statistical capacity which means data production, data access and data used to evaluate and course correct depending on how the outcomes that are generated by these policy actions. Something that we also need to notice is that conducting industrial policy can be particularly challenging in the MENA region because some environments are already highly distorted. And in these times, of higher certainty, and unpredictability, conducting industrial policy can be even more problematic. Something that we wanted to point out here is notwithstanding the increased attention to industrial policy in the policy arena and in research this should not be seen as a substitute for macro stability and improvements in the business environment. But I focused a lot on the role of government but let me now turn on how firms can help themselves. And the report highlights two margins. One the intensive margin how can they make better use of the talent that they have already. A literature out there shows that up to one third of the different differences in productivity between US and other countries can be due to management practices. When we measure management practices in MENA we see that globally better management is associated with more product innovation, more process innovation and more R&D, all of those markers of innovation that can really push the frontier of research forward in our region. So there is an agenda for firms to really improve their management practice to make the best of what they have. This is not the only margin and as Ousmane made in his initial remarks has pointed out a tremendous potential that is out there and it is out there mostly utilized which is the talent of women. So this is the extensive margin as we would say in economic tapping on talent that is out there but still unutilized. Recent research shows that firms that are led by women are more likely to hire women no matter the sector in which they operate. This turns out to be true even in MENA. So on average you see here it on the panel A of the graph firms that are led by female top managers hired twice as many women than firms that are led by male top managers. The reality however is that the share of females in firms with a female top manager still runs in the single digits in MENA and you see it on the right hand side panel not only the share is low but is significantly lower than what we see in the rest of the world. So here there is an important agenda of leveraging female talent through the promotion of female entrepreneurship something that is likely to bring further growth in firms particularly because now women are more and more educated and so not leveraging their talent in the region really amounts to leaving money on the table of course firms can help themselves but also regulations and laws can help and this is the agenda that is followed by the women business in the law initiative in the World Bank that looks at equality of rights between men and women in this case in economic activity. Now I concluded my presentation but let me just move to a recap of what we saw before we move to the conversation. You probably have heard the word uncertainty one too many times by now but really the macro economic outlook of the region is surrounded in uncertainty. And the region's global policy uncertainty and conflict are intertwined with a history of chronic low growth which has resulted in low standards of reading in MENA and a number to remember, GDP MENA is 25% that of a frontier economy. The private sector can really be an engine of productivity and can really help to bridge that gap, bring innovation and bring the jobs that are so important to development and to social cohesion. However in MENA the private sector is not dynamic. What can be done about it? The government can retain its own role to be able to create conditions that allow the private sector to unleash its potential. How can you do that? Through SOE reforms that will guarantee competitive neutrality between the public and the private sector by improving the business environment with simpler and more certain regulation and being cautious with industrial policy. All of this should be underpinned by more data, better data and better use of data that would allow governments to course correct when needed. But firms can also help themselves and we saw they can make better use of the talent that they already have by improving their management practices and they can untap this large pool of underutilized talent which is the one of women by also supporting female entrepreneurship. Thank you so much for being with us and I look forward to the conversation that will follow. Thank you. Over to you.

[Colleen Gorove-Dreyhaupt] Thank you, Roberta, for the excellent presentation so now to our panel discussion. I would like to introduce our esteemed panelists. Their full biographies can be found on the World Bank Live site, so I'll keep this introduction brief. Dr. Caroline Freund is the Dean of the UC San Diego School of Global Policy and Strategy and a former Chief Economist of the MENA region at the World Bank. Dr. Omar Razzaz is the Senior Fellow of the Middle East Initiative at Harvard's Kennedy School of Government and a former Prime Minister of Jordan. Caroline let me start with you, we've heard from Roberta that to boost the private sector governments must rethink their role with the markets and the private sector must harness talent better. You were the Chief Economist at MENA at the World Bank over a decade ago. Could you share your thoughts on how much the private sector has changed since then, and if not what are the reasons for it?

[Caroline Freund] Yes, first let me congratulate the authors. I think the data transparency push is important and that analysis is really well articulated and for the most part I agree with the conclusions and also I would say that Roberta did an extremely clear presentation. So I really enjoyed that. So, basically many of these conclusions could have been given in reports I did and probably were as well as my predecessors and my predecessor's predecessors. This isn’t indicative of a problem with the report, but of stagnation in the region with very few bright spots. And my concern I guess is that I see the World Bank doing better analysis yet becoming far more cautious in its recommendations so I actually search the World Bank for MENA and the private sector reports and the earliest I found but there could be others and weren’t online was from 1995 the report called Claiming the Future that had been led by Minouche Shafik. And as time passed we seem to be less sure of a recommendation so let me tell you how the recommendations in this report and those in the 95 report compare, so in this report we talk about high quality and transparent data and I thought Roberta did a really nice job of showing we know 40 to 80% of jobs are informal will that's a really huge gap I mean is it 40% or 80%? Really big difference, 50 to 80% of firms and inability to do firm level studies that have been done extensively in other regions. The 1995 report mentioned getting on the international financial map providing clear rule for foreign investors and publishing economic data and went into detail about the importance of that. This report talks about rethinking and changing the state's role in the economy. I don't know what that means. The 1995 report said to make privatization a priority. I don't see privatization being used with the World Bank anymore and I wonder it may not be perfect but it's better than the ongoing bloat in the state system that we see, this report talks about better business environments, pretty uncontroversial that one had improved the investment environment both talk about reducing burdensome paperwork and cost of doing business etc., this report talks about being cautious about industrial policy. That one talked about using natural resources sustainably, eliminating remaining subsidies for natural resources and targeting interventions. So it went into detail about which sectors are problematic. So again cautious about industrial policy are you saying they should do it or not do it? I would say MENA don't do it, you don't have the structure and in other countries where it has worked it's been very focused on export sectors and I will say a couple more words about that. Then the very first recommendation in the 1995 report was credible and consistent trade liberalization. This report mentions trade liberalization twice, and is neutral. Some positives, some negatives. That report specifically said they moved to uniform tariffs below 5%. So what I'm concerned about as Ousmane started talking about jobs, and the need for jobs, and this is about the private sector, the private sector needs scale to grow and create jobs, small countries don't have scale demand, how do you do that without trade? So small countries really need to be part of the global economy. I understand there are lots of constraints, industrial policies involved, and trade policy or trade liberalization, is out of vogue and that's a real problem. But the last thing that it needs is industrial policy and a protected economy so I would just like to see maybe a little more boldness. Great great analysis but I'm very worried about the lack of boldness in our recommendations.

[Colleen Gorove-Dreyhaupt] Caroline, thank you so much for those insightful comments. So, Omar, let me turn to you and we are discussing a lot of the role of governments here. As a former minister yourself, it would be great to hear your reflections on the actions the governments have taken to strengthen the private sector. And on what needs to be done moving forward thank you.

[Omar Razzaz] Thank you, Colleen. And thank you Ousmane and Roberta for the introductions and let me just start by saying these reports are very important mostly for stock-taking where we stand and what did get accomplished and what did not get accomplished. That record is very very important. So thank you so much for keeping that. But also the report starts to sort of point forward at where the private sector can do more and government can do more, and indeed there is room for more of all those actors to do more going forward. But again realistically, the question becomes is it likely to happen given the tremendous uncertainty of growth and uncertainty, uncertainty due to trade policy uncertainty, this is the elephant in the room, globally, but uncertainty in the region is not that new. I mean whether it's conflicts, what's happening in Gaza, the killing and the starvation, in Sudan and other countries you have the combination of failed states, fragile states, low growth states, stable but low growth states etc., so I think the challenge for all of us now that this report kind of takes stock and highlights the gaps between this region and the rest of the world, the challenge is to say how do we get out of this mess? And there are no easy answers there's no push button kind of solutions to this, but going back to your question of what can government do, under crises, governments can do something, in partnership with the private sector just to give you a quick example of my experience in Jordan when I was Prime Minister during COVID, everything was shut down, trade was disrupted, all of the above, it was amazing however how quickly the garment industry in Jordan turned to making masks and robes for the hospitals and clinics and users, and how quickly pharmaceuticals started producing cleaning materials and disinfectants and things like that. And ironically in these sectors Jordan's exports started growing, so just a small example and we had to change some of our regulations to allow for this to happen. So yes in crises we can be creative, and we can make a difference. But that's at the national level. Now what I would like going forward for MENA and the World Bank and for all IFIs to explore is how do we de-risk this region? How do we de-risk the global economy, somewhat and it's not starting from scratch, let me start by saying this, I know that IFIs do not get involved in the politics, and they should try not to get involved in politics but I think the message to politicians around the world should be that without political stability, without peace it's very hard for economies to grow and it's very hard for the social outcomes that we desire to be achieved, so do not throw the ball into the arms of the IFI's in the countries when there is so much instability that can be reduced. Now my question it's more a question than an answer going forward is the extent to which the World Bank and other organizations can play a bigger role in de-risking and as I said we are not starting from scratch here. There's MIGA historically which has insured against political risk, there are instruments such as private capital mobilizations, PCM and PCE private capital enabling, and there's a CRIC, that are different instruments and the bank and other groups can use to de-risk the private sector to invest, otherwise if we tell the private sector to please invest in more labor hiring and more female participation, we know the answer, the answer is going to be we can't the risks are too high we cannot invest and we've seen from Roberta's numbers how little investment that they made in research and hiring and capital, etc. So the extent to which these institutions and instruments can help provide some certainty is important, and on industrial policy that the report does focus on I totally agree that we should be careful here about picking winners if you will and also about making open ended commitments which tend to make the sectors protected sectors closed for entry etc., I'm not that competitive. So I would say use it with caution but that's not the only instrument. This is about selecting export oriented sectors. The type of instruments we need are sort of insurance for everybody so that everybody has more so that you can get more competition and more investment in the future. And I just will end with this, that there are several things we can work on. The report mentions governments and I would zoom it down to the issue of voice and accountability which the World Bank has been working on for the last 20 to 30 years. There are instruments there are platforms that make people feel like they can complain and hold public sector accountable and I've been working on that a little bit, and all of these schemes that I have mentioned MIGA and others, these instruments but also social protection schemes under severe cases such as the weather, the climate change affect, the war effect, we really need these social protection schemes strengthened and expanded so that we can pick up and move forward from where we are. Thank you.

[Colleen Gorove-Dreyhaupt] Thank you so much Omar for those insights. Caroline, back over to you, you have a lot of great work on superstar firms especially the exporters. Could you share with us the characteristics of superstore firms, and then to reflect a bit, are the challenges that are facing the private sector in MENA the same ones that are prohibiting the development of superstore firms in the region?

[Caroline Freund] Yeah, thanks for the question and a big part of growth is allocative efficiency. So allowing the most productive firms to grow and I think Roberta did a nice job talking about this and also talking about the lack of data and the limited studies. So we don't know how important that is, this is kind of the between effect that tends to be weaker in MENA. And this is superstar firms, this is not about SOEs, it's allowing your most productive firm to grow in which case the whole economy gets lifted up because that creates jobs, and because that firm is more productive and its large overall productivity rises faster. So the only thing I'd really like to emphasize is the importance of trade in this. Because again to get it scale, how can you do that if you're not trading with the rest of the world? And in countries that have really supported large firms or even used industrial policies and that way like Korea focused on exporting firms. So they really insured that you know subsidized credit etc. went to firms that were expanding in the global market that were globally competitive and if you look at the top 10 firms in different regions, in MENA they are all resource related banks, state owned cement. If you look at the top 10 firms in East Asia they’re primarily tech companies, new, there's dynamism in there, and even in Latin America there's a mix you do see some materials and industrials, private telecom, so it's about private firms that are productive and growing, that's what a superstar firm is that creates jobs and they are highly highly associated with growth.

[Colleen Gorove-Dreyhaupt] Thank you Caroline. Omar. Back over to you. Shifting to conflict, conflict has devastated lives in the region, we are currently seeing some shifts and hope in Syria and Lebanon, so from your perspective are you hopeful? What are the critical economic steps that the new leaders need to take into account.?

[Omar Razzaz] Thank you I mean the region is plagued with conflict with failed states and very fragile states, there are at least six or seven countries in the region that are experiencing conflict of one sort or another, and we know that there are some neighborhood effects of that, so even the countries that aren't directly involved in conflict are affected by it, politically and socially and economically. So it is a damper for the whole region. Now the question is whether I'm hopeful or not, I have to think about this because we have been hopeful before. Things don't always go in the right direction so you have to be very cautious. Having said that, we cannot be but hopeful, we cannot and hopeful to me is different than optimistic, hopeful means that there is the possibility that something can happen and you have some cards to play, you have some means of realizing that objective. And so what I'm seeing is regionally, countries which probably in the Gulf and in North Africa, and Middle East countries disagree on everything, probably agreed today that a stable Syria and a stable Lebanon is a good thing for Syria and Lebanon for the region and for the world. And ironically, that seems to be the attitude globally as well with global powers, so for the first time if I may say we're seeing in alignment at the national level and regional level, and global level that creating about conditions that would allow for a sovereign nation to emerge, not as an authoritarian, we've seen that and we’ve seen these collapse. But as a sovereign nation as a state, a strong state, that respects the pluralism of the plurality of its population, that incorporates all of them, that is decentralized enough, and if that happens in Syria and Lebanon, I really think that this is a very strong foundation for economic growth, and increased productivity and reflection of that on standards of living. So yes I am hopeful, I guess but there's a lot of work to be done by everybody to make sure that the leaders of this country, the institutions are all pushing the same direction, the regional countries are helping them in this direction and we are seeing this happen. The absence of that, it's uncertainty that we've seen a spike, will spike even more. We have now in the last two days witnessed how the clashes between India and Pakistan might affect not just these two countries with superpowers as well. So we really need to make sure that first you contain and then you push in the right direction towards a sustainable development.

[Colleen Gorove-Dreyhaupt] Thank you, thank you so much and really thank you to you and Caroline for these very insightful comments which have thoroughly enriched our discussion. Now for our final questions Ousmane, I would like to turn to you, you know, following this discussion on the important role of the private sector and economic growth, to ask you how the World Bank is helping to support countries on this agenda and driving the private sector as an engine of growth.

[Ousmane Dione] Thank you Colleen and again let me thank Caroline, Omar and Roberta for this extremely thought-provoking conversation. And let me just share a reflection, coming first to the point you raised because we heard some of the challenges which as a region and people in MENA are facing. But also the opportunities for strong growth. And I do hear you Caroline, there seems to be some kind of déjà vu, but I still would be hopeful to use the term of Omar that progress is possible. And this is where perhaps the role of the World Bank can become even more critical in working with development partners you refer to how the IFI's can come together to de-risk MENA so that the private sector can strive and Omar I think this also some of the agendas which I believe we need to be much more stronger going forward let me just pick up a very few example of what currently we are doing on that sense. Caroline, you refer to trade in small countries and let me take the case of a country like Djibouti where currently we are partners with the EU to boost the growth for micro, small and medium enterprises. Where we foster entrepreneurship and where we boost their capacity through links access to digitalization to improved accounting practices, credit applications, and business plans. These programs are currently helping in Djibouti to strengthen the livelihood for people and to also improve their lives and I think we need to do much more on this in a number of the small countries going forward. If I take in terms of just going through the sense you mentioned Omar, the upper Egypt, the World Bank finance program is helping to promote local economic development by supporting businesses to grow and the government to deliver high-quality infrastructure and services. This is part of the de-risking or part of creating you know the enabling environment and one of the key program activities and initiatives is currently to help local businesses with access to new markets. And to date we have more than 6,300 businesses and workers who have benefited from these initiatives. We need to do more on this and we need to bring many more IFI's on the way. We can use a series of different instruments in order to de-risk your business and countries like Egypt and so on. And let me look to your own country Omar, in Jordan where our operations are helping the country as it works we generate jobs and expand economic opportunities, especially for youth and women. I really believe that in the context of MENA, if we want to aim for stability, the point you mentioned Omar if we want to see some kind of an inclusive growth where somehow no one is being left behind as you mentioned Caroline, the youth and women agenda has to be in the forefront of this development. Here, today some of the programs we have in Jordan have reached 48,000 Jordanians among which 52% of them are women. To have secure formal sector jobs and 3000 of them are also receiving on job trainings so over the five coming years in Jordan we hope that 10,000 more new opportunities will be created you know for the youth, and we are taking a holistic approach to create better jobs and more opportunities for people. And I think this is part of the backbone of looking for stability this is also the backbone on how the delivery machine of the state can create that enabling environment and how it might be also a way through which policies and reform can then really de-risk the environment for the sector for the private sector not to come in. So I think a brighter future for MENA with the private sector could be within reach. And I'm hopeful about this despite knowing the challenges which we mentioned. It is precisely because of this I believe that we must work together with determination to help the region seize those opportunities that lie before. Now I join the report team on calling all of us, the government and the private sector, development partners to take the necessary steps to realize a brighter future for the region. And we can’t do this with a clear eyed understanding of the many challenges MENA is facing including complex geopolitics. Both countries across borders from economic pressures to geopolitical uncertainties. So for the millions of young people across the MENA region, their hopes, their ambitions, depend on our collective ability. Collective ability to navigate these complexities and to deliver meaningful changes. So it's a shared responsibility, this is where the World Bank needs to partner with more. This is where also you know within countries, voices and participation and the notion of accountability has to be much more featured you know going forward. So then that shared responsibility can be turned into shared opportunities. And then we can unlock the potential and the promise that belongs to the people of this region. It is possible, we should always have that prospect of a positive narrative despite the challenges and to make sure that you know we call for actions which can really lead to those opportunities going forward. Let me stop here Colleen, and again thank Caroline and Omar for the excellent you know thoughtful and thought-provoking insights they have provided to this report and we look forward to more because it is just, it should not just be a report. The way I do see it as regional vice president is how we can translate this into policies for decision-makers. How we can translate this into actions working together with other partners to serve people in government in this region. Thank you.

[Colleen Gorove-Dreyhaupt] Thank you Ousmane and thank all of you for your thoughtful interventions today and I'd like to thank the audience for tuning in and watching this broadcast. And I would encourage you all to continue the conversation at #MENAupdate and to read the report.