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State-Owned Enterprises in the Middle East and North Africa

Engines of Development and Competitiveness?

image of State-Owned Enterprises in the Middle East and North Africa

State-owned enterprises (SOEs) are an important feature of the economic landscape in the Middle East and North Africa region and yet, their contribution to the local economies has not been subject to a systematic investigation. SOEs in the region are generally perceived as inefficient and subject to sub-optimal governance arrangements but at the same time, and somewhat paradoxically, they are often charged developmental mandates that typically go beyond their stated commercial objectives. This phenomenon owes to the historically prominent role of the state in the economic development in the region and the recently renewed interest in using select SOEs as anchors of national industrialisation and competitiveness strategies.

This publication contributes to the limited existing literature on the role of SOEs in the economic development by examining the contribution of MENA SOEs to industrial development, diversification, poverty elimination and the provision of goods and services to the public more generally. Second, it provides an overview of the diverse mandates and roles of MENA SOEs and assesses the costs of these obligations with a view to isolate ownership and governance practices that have contributed to the success of some companies and poor performance of others. Recommendations to policymakers as well as management and boards of SOEs are made based on these observations at the end of the publication.

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Executive summary

State-owned enterprises (SOEs) constitute an integral feature of almost all economies in the Middle East and North Africa (MENA) region, and yet, unlike family-owned or listed companies, they have for the most part not been subject to systematic research, either in a regional or in a country-specific context. The OECD publication of country case studies of SOE sector reform in the MENA region entitled Towards New Ownership Arrangements in the Middle East and North Africa aimed to address this gap, highlighting the progress made and the challenges tackled by governments in recent years in privatising SOEs and upgrading the regulatory frameworks for companies remaining under state control.

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