Corruption ‘hinders progress of Middle East private sector’
DUBAI // The development of the Middle East’s private sector is being held back by corruption and political instability, said the president of the European Bank for Reconstruction and Development. Sir Suma Chakrabarti said unreliable electricity supplies, poor access to finance, a skills gap and restrictions on free trade were also obstacles that needed to be overcome if the sector was to fulfil its potential as the greatest area for economic growth.
Referring to a survey conducted by the World Bank, European Investment Bank and the EBRD to evaluate obstacles faced by the private sector in the region, Mr Chakrabarti said corruption was by far the biggest factor hindering development, with more than 50 per cent of companies identifying it as an impediment.
Mr Chakrabarti said to tackle corruption governments had to encourage transparency and improve competition, something his institution is helping with. With the region producing some of the world’s cheapest renewable energy, he said a strong private sector could help address interruptions in the supply of electricity.
“The private sector is acting as a catalyst for one of the greatest transformations of our time: energy efficiency,” he said.
Supporting small and medium-sized enterprises and emphasising development of the youth’s skills needed for the market should also be a priority, Mr Chakrabarti said.
“Technical education, vocational education and education training suitable for private-sector jobs are far too low a priority.”
He also called on governments to ease restrictions on free trade and increase foreign direct investment (FDI).
“Excessive red tape prevents firms from realising the potential of export markets. FDI not only brings more funds and technology but more effective management techniques,” he said. Headquartered in London, the EBRD is a developmental investment bank owned by 65 countries and two EU institutions.