Looking forward, the MENA region is now better placed to deal with key elements of its urgent unfinished policy reform agenda. Both domestic and international factors pose important challenges for policymakers, business leaders, and regional and international institutions. On the international front, competition is intensifying, while the increased mobility of capital implies increased marginalization for those whose reform efforts are lagging. This is a world of enormous opportunities, but as the recent currency crises in Southeast Asia have illustrated, it is a more complex world, which increases the premium for sound economic management. We now have a well-established body of international experience that sheds light on the main elements of a successful strategy.
Strategies aimed at disengaging government from commercial activities can take many forms.
This not only enhances transparency and reduces the risks of market disruption, but also helps policymakers. While we should rightly draw encouragement from the recent economic progress made by the MENA region as a whole, we must also recognize that not all economies are doing well. In particular, the Palestinian economy has been hit hard by the reversals in the peace process and measures taken by Israel. This has disrupted investment and growth, and added to unemployment and economic deprivation. If the peace process revives, the Palestinian economy will be able to put behind it the stagnation and disruptions of 1996 and 1997.