The Middle East and North Africa (MENA) region has performed well in managing the crisis caused by the novel coronavirus (COVID-19) pandemic, according to Jihad Azour, Director of the International Monetary Fund’s (IMF) Middle East and Central Asia Department.
Azour said that, with the challenges that many countries in the region faced when entering this crisis, the region has still managed the shock, both in terms of sanitation and economics.
“The way the region managed the shock, both the sanitary as well as the economic, proved to be very well done in terms of limiting the spreading of the virus, the fatality rate, and the region is performing much better than other parts of the world,” Azour added.
His remarks came during a virtual panel discussion entitled “Mitigating Long-lasting Impacts from COVID-19 in the Middle East and North Africa”, held on Thursday.
Azour also said that some of the best practices in terms of using technology came from the region.
“Despite the differences in infrastructure, all countries in the region reacted very quickly, putting the right healthcare and safety measures to protect lives,” Azour said, “But we also saw countries deploy a series of fiscal and monetary actions to provide support to the real economy.”
He added that the risk countries face in the current period is that of complacency, with many at risk of thinking that the crisis is now over.
“In order to maintain the overall stability that we all need, which is the essence of confidence, we need to ensure macroeconomic stability, but also to review what reforms are needed today to leapfrog the transformation, and accelerate from crisis management to recovery,” Azour said.
He assured that the global pandemic will be a transformative crisis that will change the way economies work going forward. The reason for this stems from the disruption caused by the crisis.
Azour said that certain activities and sectors, such as tourism, were heavily disrupted due to the coronavirus, creating a vertical crisis whereby these sectors were affected in some of their main components.
He added that there is an acceleration, with countries seeing a spurt in the development and movement of technologies and their uses. Although not new trends, they have been vastly accelerated due to the crisis.
“It’s important in any crisis to quickly recognise the nature of the crisis, and to react fast, and accelerate the recovery,” Azour said.
Referring to previous crises, the IMF regional director said that the global pandemic has differentiated countries. This has entailed that some were able to accelerate the transformation and use the crisis as an opportunity to undertake reforms.
He noted that it has been these countries that had pre-existing reforms plans that have been able to recover very fast, compared to those that did not have such plans in place.
Azour added that this aspect was one of the lessons the region learned from the 2008 global financial crisis. IMF analysis shows that those countries that reacted fast to this crisis were able to prevent serious long-term damage and keep reforms on going.
“Secondly, it is very important to look at the silver linings, and to build on that, but recognising them is not enough as it requires a set of actions, a set of policies and this is where the role of the state is very important,” Azour noted, “It needs a set of actions which this is the role of the private and financial sectors, as well as investors, which is very important, in addition to the role of international institutions like the IMF and others in helping accelerate those trends.”
He assured that it is also very important to address some of the scars left by the coronavirus pandemic that will last for a long time. This includes the need to address the vulnerabilities that were revealed during the crisis, such as in deploying support to large parts of the population.
“The capacity to work flexibly, and work from home or remotely, proved to be one of the issues or handicaps that did not allow some countries in the region to accelerate their adaptation,” Azour said.
He also said that “making sure that our infrastructure is ready especially in terms of technology, education, training and capacity building, and access to finance is very important particularly as we rank low on that”.
Azour concluded by noting that inclusion is very important, particularly among youth and women who are the key drivers for growth. The region, however, is unfortunately not tuning into these two key segments of the population to reap their full benefits.