BUS613: Advanced International Business

Limited integration has stifled the Middle East and North Africa (MENA) region's significant potential for economic growth and job creation. Home to 5.5 % of the world's population and 3.9 % of the world's gross domestic product (GDP), the region's share of nonoil world trade is only 1.8 %. By contrast, countries opting for a liberal trade and investment regime - most notably in East Asia - have seen significant increases in trade, employment, and per capita income. If petroleum and gas are included, MENA is far more integrated in the world economy, with exports accounting for 6.2% of global trade. Oil and gas exports are three-quarters of total MENA's exports. 

MENA is characterized by exports of primary commodities, largely oil and gas (76% in 2008–10). Manufactured goods account for just over 11% with other sectors accounting for the remaining 13 %. MENA countries' exports are highly concentrated and less diversified overall in-spite of recent efforts, with Egypt, Jordan, Lebanon, Morocco, and Tunisia faring better than the rest. Also, exports are unsophisticated, needing only low skill levels. Only 21 % of exports from the above five countries are medium or high-technology products compared to 37% in other middle-income economies. This combination of limited export diversification and low-technology industry hampers already low productivity growth. 

MENA's service exports are currently dominated by low value-added tourism-related travel services. Travel and transport together made up 78% of total MENA service exports in 2008. In contrast, South Asia, led by India where information and communications technology and finance are the leading export services and constitute 55% of service exports. 

Source: Mustapha Rouis and Steven R. Tabor, https://openknowledge.worldbank.org/bitstream/handle/10986/20566/780730BRI0QN950nowledge0note0series.pdf
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