Energy price shock is perceived as the biggest risk for doing business in the MENA region, according to the report ‘Regional Risks for Doing Business 2018’ published by the World Economic Forum (WEF).
The report names the top 10 risks in MENA as: energy price shock; unemployment or underemployment; terrorist attacks; failure of regional and global governance; fiscal crises; cyber attacks; unmanageable inflation; water crises; illicit trade; and failure of financial mechanism or institution.
Although the top two risks across the region are economic in character, the deep fissures within and among many of the region’s countries are evident in the responses to the survey, the report said.
This is perhaps clearest in Lebanon, where the most-cited risk to doing business was ‘state collapse or crisis’, with ‘terrorist attacks’ and ‘failure of national governance’ in second and third positions, respectively. Lebanon has not been able to form a government since the elections in May 2018, in part because of the strains caused by increasingly complex geopolitical rivalries across the region. Although the country has endured long periods without a government before, Lebanon now faces serious economic challenges and is in dire need of reforms.
Other countries attaching high prominence to domestic and regional fractures in the survey were Tunisia, with ‘profound social instability’ ranked first, and Algeria, where respondents ranked ‘failure of regional and global governance’ first. In both Israel and Jordan, ‘terrorist attacks’ topped businesses’ lists of concerns.
In Yemen – where a profound humanitarian crisis has resulted from a protracted civil conflict that is deeply entangled in the aforementioned regional rivalries – the gravity of conditions in the country is illustrated by the spread of concerns that respondents prioritised from the WEF’s list of 30 global risks, including: ‘failure of national governance’, ‘failure of regional and global governance’, ‘failure of financial mechanism or institution’, ‘failure of critical infrastructure’ and ‘spread of infectious diseases’.
The findings presented in the report are based on data from the WEF’s executive opinion survey. Each year, the WEF canvasses the views of business leaders from around the world on the state of the business environment where they are based. The survey was conducted in 2018 between January and June, and the survey’s risk-related question received 12,548 responses from eight regions namely, Europe, Eurasia, Sub-Saharan Africa, North America, Latin America and the Caribbean, East Asia and the Pacific, South Asia, and MENA. The respondents were presented with the core list of 30 global risks and asked to select five global risks that they believe to be of most concern for doing business in their country within the next 10 years.
The countries covered in MENA are: Algeria, Bahrain, Egypt, Iran, Israel, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, the UAE, and Yemen. M