BAKU, Azerbaijan, November 23. Geoeconomic fragmentation in the Middle East, North Africa, Caucasus, and Central Asia has become one of the main challenges for countries who have historically played the role of connectors, Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), said during an online briefing, responding to Trend’s question.
He noted that the war in Ukraine has shifted economic dynamics, presenting both challenges and opportunities for countries in the region. "The war in Ukraine has provided for some of the countries the capacity to play a greater role in trade by providing for some trade facility, logistics capacity, but for others also the capacity to increase investment in a certain number of activities, especially around the technology sector," Azour said.
"Therefore, geoeconomic fragmentations are one of the key challenges that countries are facing," he added.
Azour emphasized the importance of tailored strategies to address these challenges. "For the countries to address this, there are national policies and regional strategies. The national policies are to accelerate structural reforms that will allow those countries to become more competitive, improve their doing business and their capacity to attract FDIs, increase productivity," he explained.
He also highlighted the need for a shift in governance to support economic growth. "Reconsidering and revisiting the role of the state will allow also the economy to provide more space to the private sector and attract additional investment," Azour said.
Turning to the commodity market, Azour described its complexities. "It is also something that has various elements in it. One is the demand and supply globally that depends on the economic outcome that we see in the various blocks and depends also on the production side," he noted.
He praised the stabilizing effect of the OPEC Plus agreement on oil prices. "The extension of the OPEC Plus agreement helped to preserve stability of price but also extended the impact on the oil sector," Azour said, adding that the region's resource wealth, including energy and minerals, offers significant potential.
"Those activities offer a potential with increased interest in those commodities to expand those activities. Reforming the institutional framework, increasing transparency will be ways for those countries to increase the level of economic impact that resource potential provided," Azour concluded.
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