Infrastructure in the MENA Region: The Current State...

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Infrastructure in the MENA Region:

The Current State of Play

Nicholas Morris and Rosalind Carey

IPA Energy + Water Economics

Background Report

• IPA Commissioned by the World Bank

• Prepared Background Report:

− Takes a brief look at infrastructure in the region

− Reviews policy and regulatory reform to date

− Identifies some key challenges

− Considers how to move the infrastructure agenda

forward

− Examines the case for a Regional Forum of

Infrastructure Regulators

This

session

Session

III + IV

Tomorrow

Considerable Growth in the Region

• GDP in MENA increased ~60% 1997-2008

• Compares well with:

− Euro Zone, Latin America and Sub-Sahara Africa

• Less well compared to:

− East Asia (130%) and South Asia (100%) and

Europe/Central Asia (70%)

GDP Regional Growth

Change in GDP (1997= 100, constant 2000 US$)

100

120

140

160

180

200

220

240

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

East Asia & Pacific Europe & Central Asia Euro area

Latin America & Caribbean Middle East & North Africa South Asia

Sub-Saharan Africa

MENA

Population Growth & Urbanisation

• MENA population growth ~20% in last decade

• Faster than all comparator regions except Sub-Sahara Africa

Change in Population (1997= 100)

100

105

110

115

120

125

130

135

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008



Sub-Saharan Africa

MENA

Infrastructure Implications

Demographic

trends

+

Rapid pace

of

urbanisation

=

Increased demand

for new

infrastructure

+

Pressure on

existing networks

Importance of Infrastructure

• Infrastructure investment crucial to support:

− Economic growth

− Poverty reduction

− Competitiveness

• 3-5% GDP in infrastructure investment in

MENA in last decade

• 20-25% GDP in total public investment

• Higher than in LA, Europe and Central Asia

….but lower than South & East Asia

Gross Fixed Capital Formation

Gross fixed capital formation (% of GDP)

15

20

25

30

35

40

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008



Sub-Saharan Africa

MENA

Impact of Investment

• Despite significant investment in MENA

…growth impact lower than elsewhere

Infrastructure Access & Quality

• Most countries have universal access to

infrastructure services

• But struggling to cope with increases in

demand

Mobile cellular subscribers (per 100 people)

0 50 100 150 200 250

Djibouti

Yemen, Rep.

West Bank and Gaza

Syrian Arab Republic

Lebanon

Egypt, Arab Rep.

Iran, Islamic Rep.

Morocco

Libya

Tunisia

Algeria

Jordan

Malta

Oman

Kuw ait

Qatar

Saudi Arabia

Israel

Bahrain

United Arab Emirates

1997 2002 2007 2008

Telecoms – mobile

Mobile cellular subscribers (per 100 people)

0

20

40

60

80

100

120

140

Sub-Saharan

Africa

South Asia East Asia & Pacif ic Middle East &

North Africa

Latin America &

Caribbean

Europe & Central

Asia

Euro area

1997 2002 2007 2008

MENA

Telecoms – Internet usage

Internet user (per 100 people)

0 20 40 60 80 100

Djibouti

Yemen, Rep.

Libya

Oman

West Bank and Gaza

Algeria

Egypt, Arab Rep.

Tunisia


Iran, Islamic Rep.

Jordan

Morocco

Saudi Arabia

Israel

Qatar

Bahrain

Kuw ait

Lebanon

Malta


1997 2002 2007 2008

Internet users (per 100 people)

0

10

20

30

40

50

60

70

Sub-Saharan

Africa

South Asia Middle East

& North

Africa

East Asia &

Pacific

Europe &

Central Asia

Latin America

& Caribbean

Euro area

1997 2002 2007 2008

MENA

Electricity – generation & consumption

Change in Installed Capacity and Electricity Consumption

(1997=100)

100

110

120

130

140

150

160

170

180

190

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

MENA Installed Capacity MENA Electricity consumption

World Installed Capacity World Electricity consumption

Supply

Gap?

Electricity – Large Regional Variation

• Installed generation capacity per capita:

− Highest: 4.18kW

− Lowest: 0.05kW

− MENA average 0.54kW

− World average 0.61kW

• Network losses

− Highest: 24%

− Lowest 3%

− MENA average: 16%

− World average: 9%

Water - Access

Improved water source (% of population with access)

0

10

20

30

40

50

60

70

80

90

100

Sub-Saharan

Af r ica

Sout h Asia East Asia &

Pacif ic

Middle East &

Nort h Af r ica

Lat in America &

Caribbean

Europe & Cent ral

Asia

Euro area

1995 2000 2006

Improved sanitation facilities (% of population with access)

0

10

20

30

40

50

60

70

80

90

100

Sub-Saharan Af r ica Sout h Asia East Asia & Pacif ic Middle East & Nort h

Af r ica

Lat in America &

Caribbean

Europe & Cent ral

Asia

1995 2000 2006

MENA

MENA

Water – Scarce Resource, High Losses

Water resources: total internal renewable per capita (m3/inhab/yr)

0

1000

2000

3000

4000

5000

6000

1958-

1962

1963-

1967

1968-

1972

1973-

1977

1978-

1982

1983-

1987

1988-

1992

1993-

1997

1998-

2002

2003-

2007

DZA BHR DJI EGY IRN IRQ ISR

JOR LBN LBY MLT MAR OMN QAT

SAU SYR TUN ARE WBG YEM

Country Unaccounted

for water %

Bahrain 15%

Egypt 50%

Iraq 50%

Jordan 50%

Kuwait N/A

Lebanon 50%

Oman 23%

Palestine 40%

Qatar N/A

Saudi Arabia 50%

Syrian Arab

Republic

48%

United Arab

Emirates

N/A

Yemen 30%

Transport Systems

• Relatively well developedRoads, paved (% of total roads)

0 20 40 60 80 100 120

Yemen, Rep.

Djibouti

Oman

Saudi Arabia

Morocco

Iran, Islamic Rep.

Algeria

Bahrain

Egypt, Arab Rep.

Tunisia

Iraq

Kuwait

Qatar

Malta


Israel

Jordan


West Bank and Gaza

1997 2002 2006*

Transport Systems

• Extensive road networks in most countries

− Relatively high proportion paved

• Few railways in MENA countries

− Tend not to be interconnected

• High proportion of world air traffic

− International rather than domestic

− Airports operating at capacity

− Major developments in GCC (70% of passenger

growth Qatar & UAE alone)


• Gaps in quality of infrastructure services


• Infrastructure gaps hinder competitiveness

• Businesses see infrastructure as a ‘serious’

problem in MENA….

Importance of Infrastructure to Regional

Integration• Intra-regional trade is below 10% in all but 3 MENA countries

• In EU, 62% imports originate in other EU States

Snapshot – in Summary

• Demand for infrastructure outstripping supply

• Constraints in availability of quality services

• Could constrain competitiveness & growth

• Investment requirements huge,

• Likely to need:

− Private sector finance

− More effective public spending

• Reform of traditional infrastructure sector

Infrastructure in the MENA Region: The Current State...

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