Empowering the Private Sector

Source：Ringier Release Date：2011-06-04 90

Policymakers in the Arab world must work to expand the middle class through social, economic, and political reforms, analysts say

IN DEVELOPING countries worldwide, the middle class is often the catalyst for positive change. The demographic segment in the Middle East and North Africa differs in one key way: it is not a significant source of GDP generation or innovation.

One reason is that the region’s middle class has become overly reliant on governments for jobs and services, new analysis from global management consulting firm Booz & Company finds. This reliance when combined with weak social and economic infrastructures has prevented this societal stratum from advancing in a way that will help national economies become stronger.

National Bellwether

The creation and nurturing of a vibrant and sustainable middle class is critical to the future of nations in the MENA region. Its success is in essence the success of a nation, and its advancement brings ancillary benefits for social and economic groups, such as the poor.

“The middle class is a bellwether for a nation’s overall prospects, and its confidence in the economy can determine the future direction of that economy. Its trust in government and public institutions can serve as societal ballast during periods of disruption, just as a lack of trust in these institutions can trigger instability and social upheavals,” said Richard Shediac, a senior partner with Booz & Company.

They must work to expand the middle class, through social, economic, and political reforms that empower the private sector. “Before they can tailor such reforms, however, policymakers must develop a better understanding of the middle class,” he added.

Results of the firm’s regional survey expose trends and feelings about key lifestyle factors from over 1,450 middle class respondents in Egypt, Saudi Arabia and Morocco to expose the issue, and determine how the situation can progress.

Hatem Samman, director of the Ideation Centre, Booz & Company’s think-tank in the Middle East

“To that end, the survey results shed significant light on this group – their aspirations, concerns, and anxieties. We also have some clear policy recommendations for government reforms that help address the current concerns of the middle class and help this demographic segment take its rightful place as an engine of future growth in the MENA region.” Mr Shediac added.

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