- Report finds that MENAP economic cooperation has become a strategic imperative for prosperity and socio-economic development
- Food safety represents a priority area for businesses in the region to come together and push for meaningful progress
- Research shows that most of the impact – around 75% – can be achieved through unilateral measures taken by individual countries
Dubai, United Arab Emirates and Davos, Switzerland: Majid Al Futtaim, the pioneer of shopping malls, communities, retail and leisure in the Middle East, Africa and Asia, in partnership with the World Economic Forum, launched The Time is Now: A Perspective on Economic Integration in the MENAP Region, a report outlining how the region can advance and reach its full potential through an economic integration initiative fostering collaborative public and private sector progress through critical parameters.
Common standards and the free movement of capital, goods and services should help unlock $230 billion in GDP. However, the value at stake in the MENAP region (Middle East, North Africa and Pakistan) is much higher. While 8.5% of the world’s population lives in the MENAP region, it accounts for 3.4% of global GDP. Research shows that an additional $2.5 trillion would need to be generated for the region to produce its fair share of GDP.
To realize its potential, economic cooperation in the MENAP region has become a strategic imperative for prosperity and socio-economic development. However, the region currently remains a collection of fragmented economies, very few of which have the scale, scope, depth, institutional development and regulatory environment to be considered attractive markets for investment.
Alain Bejjani, general manager of Majid Al Futtaim, said, “The past two years have brought incredible challenges and shown the global community the values of perseverance. In MENAP, we continue to face social, economic and geopolitical headwinds. While the idiosyncrasies of individual markets have experienced different speeds of advancement, what unifies us is the breadth of our region’s untapped potential. Today, as the public and private sectors reinvent their growth trajectories and adapt to reshaped priorities, we have the opportunity to take concrete actions defined and aligned to close a $2.5 trillion gap in potential GDP and increase MENAP’s contribution to global economies. As a first step, stakeholders must collectively establish the mechanism to drive action and define common standards, areas of opportunity and direction. It is only with unity of resolve, bold political action, meaningful dialogue and deliberate involvement of the private sector that progress can be made.
The Majid Al Futtaim report notes today, more than ever, that a fundamental political imperative is needed due to five regional and global developments that have catapulted the region into a new economic reality. These include the pandemic, the conflict in Ukraine, the oil price crash, global supply shocks and commodity price volatility. Furthermore, he recommends that the private sector play a more active role in policy dialogue within the framework of stakeholder capitalism if the region in question is to realize its full potential.
The economic pressure on MENAP countries for diversification further stipulates the urgency of economic integration with expectations that reform will have a positive impact on the region. The acceleration of the global energy transition will affect the region more than most, given the traditional dependence of many of its countries on energy exports. This transition has raised the stakes of non-oil economic diversification, especially since the cost of renewable energies is expected to drop steadily by -50% between 2022 and 2035 to assimilate to non-renewable sources. The case is specific to GCC countries that have been heavily dependent on oil activities as a source of revenue. For example, Saudi oil revenues have fallen from 50% of total GDP in 2011 to 31% in 2021.
A key priority for unlocking the economic potential of the MENAP region must focus on developing and retaining local talent. The training and development of future leaders was noted as a critical factor in the progress of the region which represents a crucial pillar for prosperous economic prospects. While the MENAP region has 8% of the total number of university students in the world, it has only 1.5% of the top 500 universities, which leads many of those who are able to leave to study abroad. and, in many cases, not to return to the area. The report suggests that the region should consider launching initiatives that improve national education opportunities and create an enabling environment for attracting and nurturing the best talent, from the region and the world.
The report was published by Majid Al Futtaim in partnership with the World Economic Forum and knowledge partner McKinsey & Company. The full report can be downloaded here.
About Majid Al Futtaim
Founded in 1992, Majid Al Futtaim is the pioneer of shopping malls, communities, retail and leisure in the Middle East, Africa and Asia.
A remarkable business success, Majid Al Futtaim started from the vision of one man to transform the face of shopping, entertainment and leisure in order to “create great moments for everyone, every day”. It has since grown into one of the most respected and successful companies in the UAE, spanning 17 international markets, employing over 41,000 people and achieving the highest credit rating (BBB) among companies. private in the region.
Majid Al Futtaim owns and operates 29 shopping malls, 13 hotels and four mixed-use communities, with other developments underway in the area. The mall portfolio includes Mall of the Emirates, Mall of Egypt, Mall of Oman, City Center malls, My City Center neighborhood malls and five community malls which are in joint venture with the Sharjah government. The Company is the exclusive franchisee of Carrefour in more than 30 markets in the Middle East, Africa and Asia, operating a portfolio of more than 400 points of sale, including City+, the first cashless store in the region, and a boutique in line.
Majid Al Futtaim operates over 600 VOX Cinemas screens as well as a portfolio of world-class leisure and entertainment experiences in the region, including Ski Dubai, Ski Egypt, Dreamscape, Magic Planet, Little Explorers and iFLY Dubai. The company is the parent company of a fashion, home and specialty retail business representing international brands such as Abercrombie & Fitch, Hollister, AllSaints, lululemon athletica, Crate & Barrel, LEGO and That, a concept store and a Majid Al Futtaim fashion app. In addition, Majid Al Futtaim operates Enova, a facilities and energy management company, through a joint venture with Veolia, a global leader in optimized environmental resource management.
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