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.

English Arabic


The role of state-owned enterprises in MENA development and competitiveness

This chapter is focused on exploring the role of MENA SOEs as engines of economic development and industrial competitiveness. It highlights the variable use of SOEs to achieve established socio-economic outcomes such as urban development, creation of housing for the poor, development of sectoral clusters and other socially beneficial outcomes. More generally, this analysis looks at SOEs as one mechanism for subsidisation of basic goods and services, on which the social contract in most MENA countries relies, at least partially. Examples of commercial companies which are also mandated to fulfill certain social objectives and how they are compensated for their extra-commercial objectives are also provided.


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