If countries in the Middle East succeed in achieving full democracy, it will increase per capita GDP by 4% between 2015 and 2020, according to the chief economist of the World Bank for the Middle East and North Africa, Shantayanan Devarajan.
During the “Challenges of Growth” session, Devarajan said there is a close relationship between democracy and achieving high economic growth but only where complete democracy is practised.
He also called for the presence of a new social contract between governments and citizens, through which citizens can hold their governments accountable.
Devarajan believes that subsidies have further pushed the growth of unemployment. He also sees that rising salaries in the governmental sector in some countries, including the Gulf, weakens the competitiveness of the private sector, the main driver of growth.
Caroline Freund, a senior fellow at the Peterson Institute for International Economics, said: “There is a strong relationship between democracy and achieving high rates of economic growth.”
Freund also said there is a need to focus on large companies, including multinationals, as they are regarded as a motivation for growth unlike small- and medium-sized companies.
Karima Karim, a professor of economics at the University of Al–Azhar, said there is economic progress in China even though it is a dictatorship with widespread corruption.
Magda Kandil, executive director and director of research at the Egyptian Centre for Economic Studies, said earlier that political stability is the most important feature of democracy.