From Austerity to Inclusive Development: A Political Lens to Improving IMF Program Design in MENA

Many countries in the Middle East and North Africa (MENA) were already struggling with low growth, low health and education spending, macroeconomic instability, governance challenges, and a lack of transparency before the COVID-19 pandemic hit. While some economies have started to recover, MENA countries are increasingly feeling the burden of the high costs of borrowing to meet public budget demands. Public debt across the region is soaring.

Recurrent programs by the International Monetary Fund (IMF) have been a constant in several low- and middle-income MENA countries over the past decade, with some countries currently negotiating or enacting new programs. In order to deliver on the aspirations of MENA governments, societies, and the IMF’s goals to establish macroeconomic stability and inclusive growth in the region, the shortcomings of previous programs need to be addressed. Programs have consistently failed to account for the political context in which economies operate, and to address the root structural causes that hamper economic development. Harsh austerity measures have not only undermined political stability but also depressed domestic demand, deterring investment and hampering much-needed economic growth.

This event, taking place on the occasion of the World Bank annual meetings in Marrakech, will explore how IMF programs can better respond to the political and economic realities of MENA countries.