[Abderrahim Foukara] Welcome, everyone, to the World Bank's headquarters in Washington, D.C. Good morning to you if you're in North America, if you're elsewhere in the world, such as the Middle East and North Africa, good afternoon to you. I have the pleasure today of moderating a panel for the launch of the World Bank's latest Middle East and North Africa Economic Update. My name is Abderrahim Foukara. I'm the Bureau Chief of Al Jazeera in the Americas. I will be joined in this conversation by Ferid Belhaj, who is the World Bank's Vice President of the Middle East and North Africa region, along with Roberta Gatti, who is the World Bank's Chief Economist for the region. This conversation obviously comes to you, comes to us all, ahead of the Annual Meetings of the World Bank and the IMF in Marrakesh. Marrakesh, known locally as the Rose in the Palm Grove, next week. This is also an exclusive event for Al Jazeera. I have the pleasure of representing the network, moderating this event. It is also an unprecedented event in the sense that this is the first time that the World Bank launches a report like this, in a format like this with a television network, which happens to be, on this occasion, Al Jazeera. I also would like to say that this event is broadcast on Al Jazeera Mubasher, one of the many outlets of Al Jazeera Network. And in addition to the questions that I will be discussing with my two World Bank guests, we will be receiving questions from you, wherever you may be, that I will pose to them. So once again, welcome to this beautiful setting where we are, the atrium of the World Bank, with its modern architecture combining metal and glass, which allows for a lot of natural light. There's also a water theme represented by a man-made waterfall. We cannot hear it. The World Bank has done us the favor of turning it off so that it doesn't interfere with the sound. Welcome to both of you. Welcome to all of you following this event online. To kick us off in this exclusive event, we will hear first from Roberta, who will share with us the findings from this new report, which is called “Balancing Act: Jobs and Wages in the Middle East and North Africa When Crises Hit,” then we will go into a lively discussion with Ferid and Roberta herself. If you would like to read the full report, please go to www.worldbank.org/mena, Middle East and North Africa region. Over to you, Roberta.

[Roberta Gatti] Thank you, Abderrahim. It's such a pleasure and an honor to be here with you and with my Vice President, and to have the opportunity to present the main messages of the Middle East and North Africa Economic Update, MENA, as we call it for short, Balancing Act. So, let me start with the macroeconomic outlook, and the big picture here is that we are seeing a sharp slowdown in economic activity. 2022 was an exceptional year, and the region saw a real GDP growth of 6%. But 2023 is not looking as shiny, and the slowdown will be to the tune of going down to growth of 1.9% for real GDP. Where does this come from? It's coming from essentially the growth rate of oil exporters, and the forecast for them went down from above 6% to about 1.5%. And this is amidst oil production cuts, that we all know about, and also sort of a slowdown in global demand for oil. Oil-importer countries in our region are not doing as great as well. So, their growth is slowing down from 4.9% to 3.6%, and this is because many of these countries are really grappling with the effects of the global tightening of economic conditions. What we're doing in this report is really to make sense of one of the key human costs to these economic downturns and series of shocks. The headline message here is really that five million people are unemployed due to the economic shocks that hit the region since 2020. What are we talking about? The COVID-19 pandemic, the volatility in commodity prices, rising inflation, the tightening of global financial conditions that I was referring to above, below, and before, and really have to do with higher interest rate and the currency depreciations. So, does the MENA region look like the other regions in how labor markets react to economic downturns? I would say yes and no. For a variety of elements, for example, labor force participation or informality, I think the MENA region is no different from other regions. However, there is one aspect where the MENA region is unique, and this is how much unemployment reacts to economic downturns. We said five million unemployed because of the crises and the shocks that hit since 2020. It turns out that this reaction of unemployment is almost twice as large than it would have been in other emerging markets and developing economies. This is what you see here in the slides that I'm sure you are seeing on the channel, referred to as EMDE. So, why do we worry so much about unemployment? It's because it carries long-term consequences. We, labor market economists, tend to call these labor market scarring. But essentially, it means that when somebody loses a job, even 10 years later that job loss, this person can have lower earnings, be less likely to be employed, or much more likely to be employed in an informal sector. And what you see on the slides are numbers that are taken from a study on Egypt, which had excellent data that we could work on, showing that displacement. Men who lost their job involuntarily are nine percentage points more likely to be informally employed 10 years later, and women who were displaced from their jobs experienced a 20% wage penalty 10 years later. Now, unemployment is not the only margin that can move or can adjust in the labor market. When shocks trigger inflation, and we see quite a bit of inflation in our region these days, unemployment might be less reactive to the downturns, and I would say that this is a good thing because of this long-term cost. But at the same time, what happens is that real income falls. What does it mean? It really means what many of the people in the region are feeling right now, the drop in their purchasing power, their inability sometimes to put main staples on their table. Here again is something that we did in the report as an example to really try to unpack what is happening to families. We looked at the devaluation in Egypt of 2016, and you see these numbers here on the slides. That devaluation corresponded to an inflation rate of about 30%, which is about ten percentage point lower than what we see now in the country. It turns out that workers in Egypt lost up to a fifth of their real income 15 months after the devaluation of the episode. But at the same time, unemployment declined, because this devaluation actually came about with an increase in labor demand, and so, an increase in competitiveness. How should we think about these types of reactions in the labor market? This is what we call “the balancing act.” During economic downturn, when labor demand falls, there are these two possible reactions. One, job losses. And we know that they are costly because they bring loss of skills and inability to have the career path that these workers, who lost their jobs, would have had otherwise. On the other hand, lower real wages. Negative implication of standard of living is how we economists would say, but this really means erosion of your purchasing power. It can also come together with an increase in poverty. It can come together with an increase in inequality. So, what to do? It turns out that the policy implications probably, for once, are quite clear. It's important that economists maintain a real wage flexibility so that they can minimize these costly losses in terms of unemployment. At the same time, we know the purchasing power is going down, and we need to protect the most vulnerable in the population. How to do that? With well-targeted cash transfers. So let me stop here, and I look forward to our conversation.

[Abderrahim Foukara] Thank you. Thanks very much, Roberta. The title, as you've just explained, of this report is “Balancing Act: Jobs and Wages in the Middle East and North Africa When Crises Hit.” Obviously, we assume, not just assume, we also hope that the people following this broadcast are not just experts, ordinary people in the MENA region. And based on that, if I could get you to say a little bit more about the meaning of the balancing act, who needs to do the balancing?

[Roberta Gatti] This is a very good question, and it sort of helps us look back to these three years of overlapping crises that have hit the world and that have played out importantly in the region. As I try to briefly say, this report really focuses on the human consequences of some of these macroeconomic crises. We look at the labor market, which is one of the channels that transmits these macroeconomic consequences to people. We saw that when there are economic downturns, there are two key reactions in labor markets, and this means people's jobs. Either people lose their jobs or people lose their purchasing power. Job losses carry long-term consequences because of the loss of skill while being unemployed, particularly if that unemployment is protracted. On the other hand, when inflation happens, and we know that inflation has been a new reality in the past three years in the world and in the region, people and families lose their purchasing power. This is the balancing act, and it's a policy balancing act. It's something that policymakers need to navigate thoughtfully in a way that minimizes the long-term losses, so minimizing the unemployment but also protecting the one who lose more. So, it's a balancing act between minimizing job losses, but also protecting the purchasing power who those who are most vulnerable, and that's where building on social protection systems and targeting well cash transfer would come in.

[Abderrahim Foukara] Okay. So, on that note, let me balance the conversation by going to Ferid now. I wanted to ask you about the recent floods and the earthquake in Morocco. But before that, the Annual Meetings that I referenced a little while ago, they will be held in Marrakesh, Morocco. What is the message of the location that the World Bank and the IMF... You speak obviously for the World Bank. What is the message that, holding the Annual Meetings in Marrakesh, Morocco, you're trying to send out?

[Ferid Belhaj] Right. First, again, welcome to this fantastic atrium, as you mentioned. This is named after one of our greatest presidents, Jim Wolfensohn, who had, it so happened, a very strong relationship to Morocco. Jim Wolfensohn used to come to Morocco almost every year, and he built that kind of strong bond. So, for us, it is quite an interesting signal that we are sending by having you here under the broadest soul of Jim Wolfensohn. This is going to be the first Annual Meetings on the African continent since 1973, since Nairobi. So, it is a very strong city. This is the Bank moving ahead and really sending a strong message to the African continent. Choosing Marrakesh is also important because Marrakesh is a city that is open to all sorts of cultural and demographic influences. It is important. This meeting has taken some time to finally materialize. We have postponed it twice because of COVID-19, et cetera. Now we are very happy that it is happening, I would say, in spite of or precisely because of what happened with the earthquake. It is also a signal that we are standing by the Moroccan people and by Morocco. And you were talking about this balancing act, and I think Roberta gave you a very structured answer. I would add another dimension to this balancing act.

[Abderrahim Foukara] If you'd allow me, before you add that, what do you have to add to the balancing act, on the issue of Africa that you've just mentioned now, obviously Africa has, for a long time, been the land of opportunity and challenges.

[Ferid Belhaj] True.

[Abderrahim Foukara] It is today the land of opportunity and challenges. So, what has changed that prompted holding the Annual Meetings in Africa? What has changed in the conditions of Africa?

[Ferid Belhaj] Well, look, I mean, Africa is, as you mentioned, lots of challenges, huge opportunities. Africa is a continent that today has the potential of becoming one of the major engines of growth for the whole world. We look at demographics. Within the coming few years, we'll be looking at more than two billion people living in Africa. And this is a continent with tremendous, tremendous natural resources. And you combine that with the human resources, we are looking at, as I said, a huge potential. Now, holding the Annual Meetings on the African continent is a signal, but it's clearly not enough. We need to do way more for our African countries and for the African people, and we need to make sure that we look at linkages between the continent and its broader environment, Europe, East Asia. This is a place where, today, we need to put our minds together to make sure that we make of a big challenge, and we see what's happening now, vis-à-vis Europe, et cetera, a huge opportunity, huge opportunity to build more growth possibilities in Africa, but also to build more interaction and dynamics between the African continent and Europe.

[Abderrahim Foukara] Okay. Now, you wanted to add something to the balancing act.

[Ferid Belhaj] Yes. So, the balancing act that Roberta was mentioning, and I'd like to add a third dimension, and that is the policies that governments need to make. Now, when we engage in every dialogue with our governments, we keep very much in mind that public policies, economic policies need to jive with the reality on the ground, with the political reality on the ground, with the absorption capacity of the politicians. So, yes, we need to engage, for instance, on this flexibility of wages. It's important to make sure that we don't lose too many of those jobs. But at the same time, we know what that means. We know that when you engage in a dialogue in your society, in your constituency on the flexibility of wages, on the flexibility of jobs, you would be facing a big pushback. The Bank is not disjointed from the realities of those politics. What we try to do is to make suggestions, propose alternative policies, try to, through numbers, through data, to put on the table what can be done in a sustainable way, and I believe this is really the third leg of this balancing act.

[Abderrahim Foukara] We'll try to come back to this very issue a little bit later on, because it ties into the notion of skepticism, as you know, which a lot of people in the region have vis-à-vis the Bretton Woods Institutions. But please, Roberta, bear with me.

[Roberta Gatti] Absolutely.

[Abderrahim Foukara] One more question to Ferid and I'll come to you. Now, circling back to Morocco and Libya, the earthquake and the floodings. I mean, what are the economic implications of these natural disasters according to the World Bank?

[Ferid Belhaj] Look, first, again, deepest condolences to the peoples of Libya and of Morocco. We express that and we have engaged with both countries to help, both in terms of looking at the assessment of the damages, but also on the possibility to come and help, financially and in all kinds of ways. Now, economically, of course, you will see a downturn over the coming few months. This is a shock. At the same time, and sometimes you use a crisis to come out of it on top. We know that within the coming two, three, four years, the efforts of reconstruction, that economic dynamic that will come with it will bring about a growth that will help these countries, and notably Morocco, move past this. And when I look at the effort that the Moroccan government is making, putting on the table very sizable financial means to reconstruct, rebuild, build back better, as they say, we are confident. We really hope that in Libya, that Derna, which is a city of culture, a city of people with intellectual might, that we see having been destroyed and it's really painful to everybody, hopefully that city as well will be rescued and that the very large financial power that Libya has will help there. And as I mentioned, the Bank and others will come to the rescue, and we'll make sure that within the coming few years, hopefully that place will be revived.

[Abderrahim Foukara] Back to you now, Roberta. One of the extraordinary topsy-turviness, if I may use that term, that your report points to is that it predicts that oil-producing countries will grow at a much lower rate than last year, and that non-oil-producing countries will not be as worse off as the oil-producing countries in the region. Talk about that a little bit.

[Roberta Gatti] This is a very good question. Let me start from the big picture. As we saw in one of the first slides, we saw that there was this overall slowdown of the region from 6% to 1.9%. So, something that is important to see there is that as much as there is a slowdown in 2023, 2022 was exceptional. And so, we looked at the data looking back all the way to decades, and it turns out that to find a rate of growth as high in the region, we had to go back to 2007. So, there's something about 2022 being exceptional because it came in the wake of the Russia invasion of Ukraine with a shock to oil prices that played out very favorably in the region for oil producers. This is one side of looking at how come oil exporters are now slowing down as much. What happened since is that there have been successive production cuts from the OPEC+ countries, and these successive cuts have come amidst a very muted global demand for oil. And so, they didn't play out in a way that might be expected. Talking about expectations, actually, when we looked at how expectations for growth were revised every month after the oil production cuts, it was clear, to the markets at least, that growth in oil-exporting countries would have gone down. Now, you're asking me about the comparison with the…

[Abderrahim Foukara] Did you…? I mean, if I may interrupt you there, in 2022, was there anything on the horizon that would've told you that in an oil-producing country in 2023, growth would go from the sevens of the world, for example, to the ones of the world? I mean, those are extraordinary figures. [Roberta Gatti] Those are extraordinary figures, and I can't tell you about the precise figure, but the writing was on the wall because 2022 was exceptional. Second, when the production cuts came, and I think the first ones were in already October 22, the forecasters starting downgrade their forecast, and even our own April issue of the MENA Economic Update already has a subdued forecast for 2023. So that was already visible to those who were working on the macro. There is, of course, a long-term picture in terms of oil production, which has to do with the diversification that Ferid and I and the whole Bank is working on together with our client countries that sees the demand for oil eventually subsiding and the need to transition to a growth path for growth as an urgency, of course, for climate change.

[Abderrahim Foukara] Now, in your presentation, you talked about the human costs to many of these figures that you point to in your report. Five million jobs have been lost. You referenced the war, the invasion of Ukraine. There was COVID-19. All these things, you say, will culminate in the loss of five million jobs. What is the human cost of that loss?

[Roberta Gatti] So, this is an important and equally painful question, because it's undeniable that these shocks have hit the region. The labor market and the loss of jobs is about one of the human costs that we measure. Now, let me focus on those five million jobs lost. Something that is very unique to the MENA region is that if the MENA region behaved like other emerging market and developing economies, that loss would not have been five million but would have been three million. Why does it matter? And you were asking, "Where is the cost?" The cost is that these five million people will find it much, much harder to find good jobs in the future. They will be losing their skills. They will be more likely to work informally. They will be less likely to be able to support their families. So, there is a cost to unemployment that is undeniable and that stems even from temporary shocks, carries on for the longer term. As I said, this is not the only one. In the previous report, we actually looked at the cost of inflation on people and family, and I'd be happy to talk about that if it is something that you think would be of interest to your viewers.

[Abderrahim Foukara] Yes. Yeah. Well, I'll come back to the issue of inflation a little bit later on, but let me, for now, go back to Ferid. Ferid, we've heard what we've heard now about the realities of growth in the region, about the human cost. Was there anything that the World Bank, for example, could have done ahead of this downturn? And now that we do have this downturn, what could the World Bank do to help the countries of the region deal with it?

[Ferid Belhaj] Well, frankly, we haven't heard everything, because what we need to hear is that our countries, in the Middle East and North Africa, are lagging behind at three levels. One is, I would put it clearly and straight out there, gender. 50% of the population of MENA is not employed the way it should be. A country like Jordan, we're looking at 14%, 15% of female labor employment. It's really terrible. We look at other countries like Morocco going down. Many other countries are in a situation that is not good at that level.

[Abderrahim Foukara] What do you mean by jobs are not the way they should be?

[Ferid Belhaj] Meaning, if you have… out of the women that are ready in terms of age, willing to participate in the job market, if you have 14% of those who can actually find a job and keep it, that's a problem. The second issue is the issue of investing in infrastructure. If you look at a large number of our countries, we are not investing enough in infrastructure. You take countries that are investing around 2% to 3% of their budget in infrastructure, and that's a problem. You know why? Because the rest is going into recurrent expenditure. The rest is going into very costly subsidies. The rest is going into very costly public sector waste. So, this is an issue.

[Abderrahim Foukara] What is a good percentage in your view that those countries should have been investing in infrastructure? [Ferid Belhaj] Of course, it really depends on where we are and what the needs are, but clearly way more than the 2%, 3%, 5%, 6% that we see in a number of our countries. And the third point is to join the 21st century, notably in terms of the digitalization of the economy. That is important because it opens ways for businesses, it opens ways for engaging with the world, but also, it instills more transparency into all of the dealings, whether it is the dealings of the public sector, when you get into places where you are, in a way, getting away from the middleman and you have clearer, clearer ways of engaging between the citizen and the state. This is one. And second, it allows for your entrepreneurs, for your youth; notably, to have more space to express themselves. And that leads you to what? Leads you to more of a private sector-led engagement, and that's what we need in the Middle East and North Africa. Let me add one last point. When I look at each one of our countries in MENA, the presence of the state in the economies is overwhelming. It is heavy and it is, frankly, counterproductive. What we need is to move the needle back from there to a place where the private sector will have more oxygen and more of a role in terms of growing the economy. Otherwise, we will not be able to absorb the hundreds of millions of young people coming to the job market in MENA.

[Abderrahim Foukara] I would like to go on to some of the questions and comments that we're getting online. But before that, you mentioned the private sector. I referenced skepticism earlier in this conversation. And as you know, in the region, there are a lot of people who are very skeptical, even hostile to the private sector because they see it as a ravaging force making people's conditions worse. How concerned is the World Bank that its name may be associated with the private sector and private sector reforms in a lot of countries of the region?

[Ferid Belhaj] Well, I am not concerned that the name of the World Bank is associated to private sector, because private sector means growth, means more transparency, means more competition. I would be concerned when the name of the Bank is associated to a corrupt private sector. And of course, we are all pushing back against that. What are we putting on the table in order to prevent that? We are putting on the table a predictable and professional judicial system. We are putting on the table regulatory agencies that can actually be empowered and that can regulate the way the private sector operates, and we are putting on the table as well all sorts of transparency measures that allow us, the citizen of these countries to make sure that the private sector does not run amok of the laws and the regulations of the country. So, we are not advocating for the law of the jungle. We are advocating for a well-framed and regulated private sector. Regulated by whom? By the state. And the state's role is not to be an entrepreneur. The state's role is to be an enabler so that entrepreneurs can do what they do best, meaning create wealth.

[Abderrahim Foukara] Okay. It'll be interesting to see how what you're saying about the private sector rings in the ears of many people in the Middle East, but thank you for making those views clear. Let me go to Roberta with a question that we got online. Unfortunately, we didn't get the name of the person who's asking the question or even the country it's coming from. But the question is, "How has the economic slowdown influenced real wages in the MENA region, and what are the implications for individuals and households?"

[Roberta Gatti] This is a very good question. The economic slowdown in countries where inflation has been triggered, and think about a country like Egypt, where now inflation is at about 40%, has definitely decreased the real wage and sort of eroded the purchasing power of people. Now, if we think about inflation, this is like a consumption tax. And so, it's something that is contractionary in an economy. It's also a regressive tax, one that affects the poor more than the rich. So, we have evidence from the previous study that shows that inflation can be all the way to two percentage points different from the lowest quintile of the population to the highest.

[Abderrahim Foukara] And inflation, for those who are not experts, what should my grandmother, for example, understand from the word inflation?

[Roberta Gatti] The increasing prices that you see every day on the staples that you buy. That is what the rate of inflation is. Inflation has an impoverishing effect on countries and can also increase inequality. So, a couple of things. First of all, where it comes from. In our region, we saw that countries that had flexible or managed exchange rates, in some of these countries, the depreciation of currencies was the main culprit for increases in inflation. What can be done about it? Because of this impoverishing effect, it's even more important to build those systems of social protection with good social registry and databases to understand who are the families who need it the most and compensate and help them out in that way.

[Abderrahim Foukara] Excuse me for interrupting. I'm assuming the concern here is more about non-oil-producing countries of the region, the Egypts of the region, the Tunisia of the region, the Moroccos of the region, and so on. More than the Saudis of the region, the Qataris of the region, and so on.

[Roberta Gatti] I think it's important for every country to have a strong system of social protection, because you never know when a shock is going to hit. So, you need to have systems that protect against temporary shocks to poverty, but also to chronic poverty. On this one, unfortunately, you'll be able to get me to talk too long. But in this juncture at the moment, definitely, I think this action on well-targeted cash transfers is even more important for the oil-importing countries and for the ones that saw inflation increase the most.

[Abderrahim Foukara] Okay. We have another question from somebody out there. We don't have the name of the person or the country they are sending us the question from, but the question is, and to you, Ferid, "How can..." This ties into what you talked about just a little while ago, but "How can governments and businesses in the MENA region adapt to the heightened economic volatility and uncertainty?"

[Ferid Belhaj] Look, the world and MENA are going through this polycrises. Roberta earlier mentioned all of those issues that are becoming constraints to us. So, the reality is what it is. Governments and policymakers are there, if I may put it bluntly, are paid for finding solutions of that. And those solutions, as I was mentioning earlier, you don't need to look very, very far. Those solutions are to really deregulate your economy or, at least to a large extent, delegislate some of your economy so that you allow for the private sector to have more space. I have a number that I always put on the table because it's important. It talks to people. By 2050, that is in 27 years, you will have, in MENA, from Morocco to Iran, more than 300 million young people knocking at the door of the job market. 300 million, which is more or less the population of MENA today if you take Iran out of the equation. How can you find jobs for these kids, for these people, for these young people who are educated, who are open to the world, who are ambitious? You are not going to find those jobs in the public sector. There is no way. There is no fiscal space and there is no need for them. What you need is for these kids to go to the private sector. And this is why, again, when you look at around the world, all countries are going into this dynamic of liberal economies. You may have a couple that are still hanging on the old, old, ways and they're not necessarily examples to follow. So, the point is, and I understand where some people are coming from because we have this tradition in our region to look at the state as the savior and the doer of everything. It's not there anymore. That social contract that existed between the state and the citizen about 50 years ago is not there anymore. It's been overridden. We need to find a new social contract.

[Abderrahim Foukara] And on that, before you go on, I mean, is it within the purview of the World Bank to worry about the political instability that may create in some of the countries?

[Ferid Belhaj] Absolutely, and that's the point I was making earlier. We need to be able to read with precision and with professionalism, if I put it this way, the political economy of the reforms that we are talking about. And that's why when we talk about reducing subsidies, we immediately put on the table targeted cash transfers, and we immediately put on the table mechanisms that would allow for those cash transfers to be actually targeted and to be efficient. And we have many examples around the world where we succeeded at that. We are not in the business of pushing people to the streets. We are in the business of making sure that people go and get jobs that are sustainable and that those countries get out of the stagnation that we're looking at. If you look at the report today and you look at the projections, the growth projections country by country, for 2023, of course, and 2024, we are far away from numbers that would allow these countries to even partially absorb the young people coming onto the job market today.

[Abderrahim Foukara] And I wanted to ask you about that. I also have a question for Roberta about that from somebody following this conversation. But let me ask you first, Ferid. I mean, 300 million young people in 2050, that's a dizzying number even by the economies of Western countries. I'm assuming that many of those 300 million young people will not find jobs in their own countries and will be thinking about going to Europe, for example. Now, you also have people from sub-Saharan Africa probably seeking passage to Europe through North Africa. What sort of pressures do you expect that will create for North Africa, but also for its relations with Europe?

[Ferid Belhaj] Immense pressures, and we don't need to wait until 2050 to see those pressures. We are living them today as we speak. And today, as we speak, we see, frankly, very uncertain policies being taken by Europe. We see it and we need to say it clearly. We see also extreme pressure put on North African countries, because not only do they have to deal and to manage their own young population and find jobs for them, but they also have to deal with all of those young people, families desperate to find a better life, and coming from sub-Saharan Africa. For us, for me, Africa is one continent. There is no sub-Saharan and North Africa. It's one continent. And that continent, as you mentioned earlier, has tons of potential. The only way to make sure that we are in a situation of acceptable equilibrium is when countries that have now the capacity of doing so come and pour more resources into Africa, give more possibilities and potential to those young kids so that they can find jobs, so that these countries can grow, and create their own good dynamics, and not just be there and play defense in a way and think that Fortress Europe is the way to go.

[Abderrahim Foukara] Okay. Roberta, to close with you, with a question to you, as I said, from somebody out there reaching into this broadcast online, the question touches on the labor market. The question is, "How has the economic..." Sorry, "What strategies or policies do you believe should be implemented to address the labor market challenges in the MENA region?"

[Roberta Gatti] This is a very good question, and the headline in this report for what concerns this type of shocks that we hope to be temporary is really to maintain flexibility in real wages, not index wages, and through that, allow a minimization of the unemployment losses that otherwise would follow, very naturally, any economic downturn. At the same time, investing in the social protection systems through social registries and good targeting is fundamental. I wanted to say that actually, I don't want to be too doom and gloom, because some of our countries actually made significant progress in this respect. A country like Egypt, for example, has deployed Takaful and…

[Ferid Belhaj] Karama.

[Roberta Gatti] ... Karama to expand the coverage of families and protect the most vulnerable from these types of shocks, similarly did Morocco and similarly did Jordan. However, more work needs to be done, and the fiscal space can come from winding down and dialing back subsidies that are universal, inefficient as such, and end up often, particularly when they touch the fuel, skewing the choices of people and firms towards something that we know is bad for our environment.

[Abderrahim Foukara] And with that, we come to the end of this conversation. Thank you very much, both of you, Roberta Gatti and Ferid Belhaj. Thank you to our audience also for joining us on this broadcast and also joining us on Al Jazeera Mubasher. This was a conversation in the World Bank about their report for North Africa and the Middle East titled “Balancing Act: Jobs and Wages in the Middle East and North Africa When Crises Hit.” My name is Abderrahim Foukara from Al Jazeera. Thank you all very much.

00:00 Welcome

03:41 Main findings from the report

10:34 The meaning of the balancing act

12:33 WBG-IMF Annual Meetings in Marrakech, Morocco

14:50 Africa: Opportunities and challenges

18:40 The impact of the earthquake in Morocco and floods in Libya

20:52 Oil producing countries

24:40 Human costs of the loss of 5 millions jobs

26:35 The support from the World Bank to the region

30:28 The role of the private sector

32:46 Economic slowdown, wages and households

36:06 Adapting to the economic volatility and uncertainty

40:20 North Africa and Europe

42:57 Addressing the labor market challenges in the MENA region

44:34 Closure