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Growth and Stability in the Middle East and North Africa

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The economies of the MENA region have many similarities in terms of culture, religion, socio-political conditions, economies, perceptions. At present this region is well balanced and possesses ideal opportunities for the integration in the intraregional financial sectors. As some economies are the main exporters of the capital while others are importers of the capital. Likewise, countries also vary in terms of having the population, economic growth, and skilled labors. For instance, oil-producing countries have a small population and therefore they require help from other countries in skill labor regards.

Whereas large population countries are nonoil exporters usually and have to deal with unemployment issues (Naceur and Labidi, 2009). Conventionally rich economies followed a specific pattern and made investments of their superfluous in global financial centers, this pattern however later changed up to some extent as these superfluous economies are now looking to diversify their investments and are now investing in the region. Consequence rise of foreign direct investments (FDI) (intra-regional) has reported in the MENA economies, with its various portfolio investments also shown a rise in the economies of the MENA region as well.

US 60 billion dollars came within the span of 2002-2006, or in simple words, 11% (out of total) capital outflows of GCC region was invested in different economies of MENA region (Naceur and Labidi, 2009). Some MENA economies have boosted indirect foreign investments because of the enhanced business environment, therefore, consequences lead towards more GCC investments as the investors are keen on targeting and investing in a variety of sectors for instance real state, telecommunication, banking and finance, and tourism. These GCC investors have primarily targeted Tunisia, Egypt, Syria, and Lebanon (Naceur and Labidi, 2009).

Foreign investments and stock markets are the core activities upon which intraregional transfers of funds are dependent. Meanwhile, economies of oil-producing MENA countries are eying for stocks of non-oil-producing MENA countries.

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