Regional Cooperation Series

This Policy Paper is part of The Middle East Institute's Regional Cooperation Series. Throughout 2016, MEI will be releasing several policy papers by renowned scholars and experts exploring possibilities to foster regional cooperation across an array of sectors. The purpose is to highlight the myriad benefits and opportunities associated with regional cooperation, and the high costs of the continued business-as-usual model of competition and intense rivalry.

Summary

Economist Bernard Hoekman analyzes the state of economic integration in the Middle East and North Africa and concludes that MENA countries have failed to reach their economic potential in large part due to trade barriers, failure to diversify their economies, and lack of investment incentives. He questions the prospects of relying on top-down, traditional trade agreements such as those typically pursued by the Arab League, and instead proposes cross border economic cooperation on an à la carte, bottom-up, pragmatic basis. This strategy, he argues, offers greater prospects for countries of the Middle East to establish conditions for shared prosperity.

Key Findings

  • In recent years, MENA accounted for 3 percent of agriculture exports, 2 percent of manufactures exports, and 2.5 percent of services exports globally
  • A typical MENA country exports less than half, and as little as one quarter, of its potential
  • Ambitious ‘top-down’ regional initiatives central to MENA international relations have failed to bring about increased trade and economic growth
  • Intra-regional trade offers an opportunity for MENA to boost economic growth and job creation through lower non-tariff barriers and reduced trade costs
  • Regional cooperation in MENA offers better prospects for supporting growth if pursued on an à la carte, bottom-up, pragmatic basis involving greater participation from businesses and communities
  • Much like Europe, regional cooperation could generate long-term payoffs for MENA that go beyond economic growth by creating incentives to sustain peace and security

Read the full Policy Paper.