Part of their exchange:
Devin Stewart: Tell me about this book. It is coming out very shortly. You mentioned to me earlier that it was divided up into several very, very hot topics. Can you just give us an overview of the book?Read the entire interview.Marcus Noland: Sure. We argue that looking at the Middle East region as a whole, which we define as from Morocco in the west to Iraq in the east, that the principal challenge facing the region over the next decade or two is job creation. The demographics of the region are such that labor force growth is on the order of 3.5 percent a year. That is without increases in female labor force participation, which in fact has been rising. Given plausible assumptions about investment capital deepening and productivity, we calculate that the region as a whole will have to grow at a pretty steady rate of 5.5-6.0 percent a year over the next decade or so to absorb all that labor and create jobs.
Now, one of the principal ways that countries have rapidly expanded employment in the past is through a process of outward-oriented development. That allows countries to rapidly expand production in labor-intensive manufacturing or services sectors.
But the second driver that we identify in the book is globalization. Here the region's track record has not been good outside the petroleum sector. So while there is a demographic imperative to create jobs, one of the main ways that countries have done it in the past, through a successful process of globalization, is a question mark.
That uncertainty is deepened by the politics of the region, which combine in a unique fashion authoritarianism and political stability. So, while there is a kind of stability on the surface, we argue that these regimes may in fact be brittle and that there is a possibility for very abrupt political change. And as you know, the political opposition in most of these countries has an increasingly religious orientation.
So those things put together — a demographic imperative to create jobs, a questionable track record on globalization, and some deep uncertainty about political transitions — all work to create a very serious set of challenges for the region over the next decade or so.
--Marshal Zeringue