Younger people, particularly women, are catalysts of growth in the Middle East and Africa ,and enabling them to flourish will be key for a prosperous 21st century, International Monetary Fund managing director Kristalina Georgieva said.
The broader Africa and Middle East is the world's last growth frontier, and it is time to bridge the gender gap and harness the region's abundance of talent, she told a panel discussion on Tuesday.
“It is very clear that the responsibility of policymakers is to create an environment for young people to flourish,” Ms Georgieva told delegates at the IMF and World Bank 2023 annual meetings in Marrakesh.
There are barriers including complicated procedures and restrictive regulations, which coupled with the lack of access to finance are inhibiting progress of young entrepreneurs, especially women.
Young entrepreneurs are often denied funding due to their lack of credit history, which indicates that “things are stagnant, that we are not moving forward, and we are marching in the same place”, Ms Georgieva said.
“What I would be telling policymakers here is to start with an important message: If we want to live in a prosperous world in the 21st century, you have to unleash the tremendous human potential.”
Population trends over the next five decades indicate that Africa would be the powerhouse of talent, Ms Georgieva said.
“China is already the top of population growth and [is] going to decline, ageing and shrinking," she said.
"Europe has been doing it for some time now. North America does have Latin America, where there is some reservoir of youth but not huge.
“Where is the power … in Africa. It is the only place where young people would be coming, eager to work, eager to contribute, to unleash their potential.”
Policymakers, she said, need to be very “mindful of what they have done and not done and correct those mistakes”.
Those who have doubted the potential of growth of Africa and the Arab world also need to open up their eyes,” Ms Georgieva said.
“You want to have expansion? Go to Africa. And we from our side, we will do our part to provide more financing to … the Arab world [and] the African continent."
The IMF will be promoting removal of barriers that inhibit growth as it is not only important for young people “it is important to us all”, she said.
The Washington-based fund has often voiced concerns about complex rules, restrictive policies and lack of financing for young entrepreneurs in Africa and the Middle East region.
It has advised member countries to bridge the gender gap and accelerate policy and structural reforms to bolster growth and enhance economic resilience.
The IMF in September said that narrowing the gap between the number of working men and women can boost emerging and developing economies' gross domestic product by about 8 per cent over the next few years.
Raising the rate of female labour force participation by 5.9 percentage points in these countries will to help drive inclusive growth amid the world's weakest medium-term economic growth outlook in more than three decades.
Only 47 per cent of women are active in labour markets today, compared with 72 per cent of men.
The average global gap has fallen by only 1 percentage point annually over the past three decades and remains unacceptably wide, the IMF said at the time.
“My very strong belief in bringing women forward comes from the categorical evidence that no country can be truly rich if it only rides on the talent of half of its population, it is as simple as that,” Ms Georgieva said.
One of the best examples of eliminating legal obstacles to women’s participation in the labour market is Saudi Arabia, she said, where the policy change has led to female participation climbing to about 34 per cent.
“That is higher than some advanced economies,” she added.
The increasing participation of women in the Saudi workforce is expected to boost the country’s economy by $39 billion, or 3.5 per cent by 2032, if the current rate of growth continues, S&P Global Ratings said in September.