What Majid Al Futtaim’s new MENAP Economic Integration Barometer reveals

Majid Al Futtaim, in partnership with the World Economic Forum and McKinsey & Company, has unveiled the world’s first MENAP (Middle East, North Africa, Afghanistan, and Pakistan) Economic Integration Barometer, at Davos.

Over several months, Majid Al Futtaim worked with McKinsey Global Institute to develop a barometer capable of providing real-world insights that demonstrate where the region stands today, how it is evolving and where progress will take it, all based on real-world metrics.

What does the barometer do?

Designed to trigger dialogue and foster collective action by following the region’s progress across four key metrics – trade, intangibles, capital, and people,  the barometer will provide stakeholders with tools to help standardise the interpretation and definition of economic integration.

A major insight from developing the barometer was the scarcity of data available and inconsistency in which the different metrics are measured.

Ahmed Galal Ismail, CEO at Majid Al Futtaim – Holding, said: “Since publishing our inaugural report into the impact greater economic integration could afford the MENAP region, we have seen a number of impressive and important steps taken to foster improved intra-regional prosperity. Whilst extremely encouraging, these efforts have also highlighted the development disparity across the MENAP region. We recognise that now, more than ever in this age of geopolitical instability, economic uncertainty, and climate crisis, that our success hinges on our collective efforts to champion improved economic integration across our region.

“The MENAP Economic Integration Barometer presents a baseline from which to assess our progress, providing transparent and systematic tracking to trigger dialogue and initiate action. Our aspiration is to publish an updated barometer, coinciding each year with the World Economic Forum, and engage with key stakeholders at Davos on the results and the key imperatives to drive incremental progress.”

To launch the MENAP Economic Integration Barometer, we held a panel discussion at #WEF23 that embodied this year’s theme, “Cooperation in a Fragmented World”. (1/2) pic.twitter.com/NpcWfOrpBH

— Majid Al Futtaim (@MajidAlFuttaim) January 20, 2023

The first MENAP Economic Integration Barometer revealed the following:

The dearth of trade between countries in the region is laid bare in the inaugural MENAP Economic Integration Barometer, which shows that intraregional exports account for only 2.9 per cent of total MENAP GDP. This compares to a global average of 7.9 per cent and 22 per cent across the European Union (EU), Norway, Switzerland, and the UK.

However, when looking at the power of the region to supply goods abroad, MENAP dominates other regions, with global exports valued at 34 per cent of GDP compared to a global average of 25.5 per cent.

• 22 per cent of MENAPs trade to the world stems from fossil fuels, with an additional 7 per cent from metals and chemicals. As such, MENAP, a cluster of individually resource-rich countries with fewer distinct manufactured goods (non-oil-based) to export, has less trade between regions as a portion of GDP.
• The lack of integration is not confined to physical goods. The intraregional flow of intellectual property (IP) is just 1.4 per cent compared to 62 per cent in the EU, Norway, Switzerland, and the UK with much of the latter being driven by pharmaceutical developments, bio-tech ideation, and aerospace innovation.
• FDI inflows to MENAP lags top performing regions, and MENAP countries have lower investments in each other relative to other regions. However, this is not uniform across countries in MENAP; Dubai has been ranked the world’s top destination for FDI for 2 consecutive years.
• The MENAP region does, however, perform better than much of the rest of the world on unemployment numbers, with only 7.4 per cent compared to the global average of 7.6 per cent. However, the barometer also raises concerns about migratory trends in the region. In 2019, nearly 15 million people migrated intra-regionally in MENAP, with approximately 50 per cent of all professionals who moved, leaving the region completely. This compares to only 0.5 per cent of the total population leaving North America in 2021, compared to MENAPs 2 per cent. One can assume that sufficient working, studying, and living opportunities are the key drivers.

In other news, Dubai-based retail and real estate conglomerate Majid Al Futtaim (MAF) announced that Ahmed Galal Ismail has been appointed as chief executive officer of Majid Al Futtaim Holding. Ahmed Galal Ismail assumes the position from Alain Bejjani, who served in the role for eight years.

As the chief executive of Majid Al Futtaim – Properties, Ismail has been responsible for Majid Al Futtaim’s malls, hotels, communities and project management operations since 2018, the company said in a statement.

Read: Majid Al Futtaim Holding appoints new chief executive officer