Book Description

February 1997 More robust, dynamic growth could significantly boost sustainable economic growth and rural development in countries in the Middle East and North Africa with a comparative advantage in agriculture. But high levels of protection in many of those countries contribute to overvalued exchange rates and a significant bias against agriculture. The proposed solution: trade liberalization, especially open regionalism. Despite petroleum's prominence in the Middle East and North Africa (MENA), agriculture remains important to most of the region's economies. And more robust and more dynamic agricultural growth could significantly boost sustainable economic growth and rural development in those countries. An appropriate avenue for improving agricultural growth is to expand agricultural exports in MENA countries with appreciable-to-large agricultural sectors and comparative advantage in cereal grains, agricultural raw materials, fruits and vegetables, and many categories of livestock and dairy products. But high levels of protection in many MENA countries, especially for manufactures and some food products, contribute to overvalued exchange rates and a significant bias against agriculture. Trade liberalization and other economic reforms to promote agriculture and improve rural welfare in MENA might be pursued through regional economic cooperation, but should be guided as much as possible by the principles of open regionalism - under which trade concessions negotiated between regional trading partners would be extended unconditionally to all trading partners, including trading partners outside the region. This paper - a product of the International Trade Division, International Economics Department - was presented to the Fourth Annual World Bank Conference on Environmentally Sustainable Development, Rural Well-Being: From Vision to Action, September 25-27, 1996, Washington, DC.