# **<mark>3. Sub-regional context</mark>**

The overall infrastructure and maintenance needs are quite large and assessed at about 106 billion dollars per year or 6.9% of the annual regional GDP through 2020. The estimated differences in needs across sub-regions are just as impressive. Developing oil exporting countries (OEC) are expected to have to commit almost 11% of their GDP annually ($48 billion) on improving and maintaining their national infrastructure endowments, while the oil importing countries (OIC) and the GCC oil exporters will need approximately 6% and 5% of their GDP, respectively, to ensure enough infrastructure to meet their growth and poverty reduction targets.

Investment and rehabilitation needs are likely to be especially high in the electricity and transport sectors, particularly roads. Electricity and transport are each estimated to account for about 43% of total infrastructure needs in MENA, followed by ICT (9%) and water and sanitation (5%). Fulfilling the electricity need alone would require approximately 3% of the annual, regional GDP or $46 billion, of which 10 billion will be spent in oil importing countries, and around 36 billion in the oil exporting countries. During the next decade developing oil importers in MENA will need to spend about $86 billion dollars on upgrading their transport networks, while the developing and GCC oil exporters will need $225 billion and $145 billion, respectively. Rehabilitation needs are expected to account for slightly more than half of total infrastructure needs.

While oil exporters will be able to meet their national infrastructure needs if they maintain investment spending at rates prevailing in the 2000s, oil importers will fall short. Since the vast majority of funding for infrastructure comes from public budgets, it will be critical to protect public investment budgets and try to increase resources going to the sector in the case of oil importers. Doing so will be a smart choice for governments looking to create jobs and growth. The fiscal challenge will be the toughest for the poorest countries of the region since they are the least likely to be able to attract private financing for infrastructures required to meet population’s needs.

# **<mark>4. Current infrastructure employment</mark>**

A comparison of employment shares by sector and country to international benchmarks provides a first-round assessment of the extent to which infrastructure activities could play a role in speeding up job creation in MENA. The shares are computed using ILO data that disaggregate employment into industrial sectors at the 1-digit ISIC level allowing an identification of electricity and water sector jobs as well as jobs in transport and communications. Data on construction is included as an important element of infrastructure investment. The construction category encompasses housing and building construction. These two activities are likely to be the main drivers of job creation, but other infrastructure investments are still likely to account for a significant share of employment creation.

Table 6 shows that MENA’s infrastructure sectors, including construction and infrastructure services, employ close to one-fifth of the regional workforce, or 18.2 million people. About 11 million workers are employed in construction while the remaining 7.5 million provide infrastructure services. Within infrastructure services, the transport and communication sectors are the biggest employers, representing jointly about 7% of total employment, while workers employed in energy and water represent approximately 1%. These aggregate numbers 8