Job Creation Through Infrastructure Investment in the Middle East and North Africa

28 Pages Posted: 20 Apr 2016

See all articles by Elena Ianchovichina

Elena Ianchovichina

World Bank

Antonio Estache

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Renaud Foucart

affiliation not provided to SSRN

Gregoire Garsous

affiliation not provided to SSRN

Tito Yepes

World Bank

Date Written: August 1, 2012

Abstract

In the next 10 years or so, the infrastructure sector has the potential to generate significant employment. This paper estimates annual job creation of about 2.0 million in direct jobs and 2.5 million in direct, indirect and induced infrastructure-related jobs just by meeting the infrastructure investment needs of about 6.9 percent of gross domestic product (about US$106 billion) for the Middle East and North Africa region on average. The breakdown in expected needs is 11 percent in developing oil exporters, 6 percent in oil importing countries, and 5 percent in the Gulf Cooperation Council oil exporters. Needs are particularly high in electricity and roads. While important, infrastructure job creation will not resolve the region's unemployment problem alone and its job creation potential varies greatly across countries. Moreover, the current ability to finance and hence meet the infrastructure needs varies significantly across countries. Oil importers are likely to fall short under business as usual scenarios. In a region in which the public sector is the main source of infrastructure financing, fiscal choices will thus matter to job creation through infrastructure. But there are more challenges, including the governance of job creation, and the proper targeting and costing of subsidies for job creation and the (re)training programs needed. Managing expectations will also matter, as infrastructure jobs will help but will not solve the region's unemployment and underemployment problems.

Keywords: Transport Economics Policy & Planning, Labor Markets, Banks & Banking Reform, Public Sector Economics, Labor Policies

Suggested Citation

Ianchovichina, Elena and Estache, Antonio and Foucart, Renaud and Garsous, Gregoire and Yepes, Tito, Job Creation Through Infrastructure Investment in the Middle East and North Africa (August 1, 2012). World Bank Policy Research Working Paper No. 6164. Available at SSRN: https://ssrn.com/abstract=2128000

Elena Ianchovichina (Contact Author)

World Bank ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-8910 (Phone)
202-522-1159 (Fax)

Antonio Estache

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium
32 (0)2 6503838 (Phone)

Renaud Foucart

affiliation not provided to SSRN ( email )

Gregoire Garsous

affiliation not provided to SSRN

No Address Available

Tito Yepes

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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