The ASP is different because it will focus directly on job creation through critical private or public-private infrastructure investments. It is complementary to the economic framework developed by the G8 / Deauville Partnership that is aimed at providing loans and technical support channeled through international institutions such as the World Bank and the International Monetary Fund. The ASP will potentially include investment by the GCC countries in partnership with the private sector.
ASP Funds will be invested directly in infrastructure projects and will not pass through the government. This will allow for flexible, high-impact, country and sector investment options.
- The ASP is an Arab-led initiative based on mutual interests, with larger flows than any equivalent plan.
- The ASP will provide fast-tracked project-based finance with high rates of return.
- The ASP will target employment not fiscal stabilization or loan-based structural adjustment.
- The ASP is a multi-investor plan and fund aimed at multi-state financing.
- The ASP is a needed counterpart to Deauville investments in fiscal stabilization and technical assistance.
The unemployment rate in the MENA region is twice the rate of the global average and is increasing, according to a recent report by the International Labour Organisation (ILO).According to the ILO Global Employment Trends for Youth Report 2013, the rates in the Middle East and North Africa, 28.3% and 23.7% respectively, are rising and are expected to reach 30% in the Middle East and 24% in North Africa by 2018.
The report also showed that youth and women continue to bear the brunt of joblessness. 42.6% of women in the Middle East are unemployed. This rate is high despite the fact that the women’s labor participation rate is the lowest in the world, at only 13.2% in 2012.
Furthermore, the youth unemployment rate in the Middle East was more than four times that for adults, the largest youth-to-adult unemployment ratio in the world.
The ASP would likely have a diversified financing base including possibly sovereign wealth funds, governments, private investors as well as partnering on a project level with International Financial Institutions. It would be led by a Governing Board, including investor and target countries at Finance Minister level, with ultimate authority over policies, direction and funding. An Investment Committee and team of Technical Experts would administer the ASP, manage the Trust Fund and provide due diligence on project proposals.
At a country level, National Project Development Teams would identifying high-potential projects and lead their country’s contribution to and vision of ASP. Coordination between the ASP, the Deauville Partnership and other initiatives could be ensured through Regional Policy Forum – to deepen dialogue on mutual strategies.
The ASP will focus on meeting the needs of Arab countries whose economies suffer most from high youth unemployment and will benefit from support within such a framework, including those in North Africa and the Levant and those defined by the Deauville Partnership.
All target countries should express a clear willingness to participate in the Plan, act to foster private sector employment and meet criteria for minimum political and security risks.
- Willingness to participate and benefit
- Private sector employment potential
- Country and sectors meeting minimum political and security risks