The Middle East needs economic and political reform. That's the conclusion of a panel of experts convened in Washington by the International Monetary Fund to discuss the region's slow economic growth.
"Some factors that explain this economic malaise include the size of the public sector and the weak financial sector," said George T. Abed, Director of the I-M-F's Middle Eastern Department. Government is too large and the private sector too small to sustain economic growth.
"The educational system is mostly bankrupt," said Professor Shibley Telhami of the University of Maryland. Educational systems are not giving young people the skills they need to compete in the world economy. "This labor force cannot be employed," said Mustafa Kamel Nabli of the World Bank. "The unemployment rate is rising and will continue to rise," he said.
In Iran, officials report that the unemployment rate among young people fifteen to twenty-nine years of age is over twenty-eight percent. Poverty breeds despair and rage -- often finding outlets in drug abuse, crime, and terrorism.
Privatization of the economy is needed to stimulate growth in the Middle East. Economist Amer Bisat said, "in financial markets there needs to be an impetus or a trigger to spark an influx of capital. Privatization tends to be the most typical trigger in situations like these."
Free market reforms are badly needed in the Middle East, but cannot be implemented without the rule of law. Private business and investment cannot flourish without protection from theft, fraud, extortion, and violence.
Middle East economic specialist George Abed said, "in the absence of political reform, the economy cannot go very far." Authoritarianism, in various forms, has been tried in many Middle Eastern countries and has yielded only economic stagnation and poverty. It is time to give free markets and democracy a chance.
