Gross domestic product, or GDP, measures the value of goods and services produced in an economy. It has long been treated as the world’s scoreboard for progress. But a growing economy can still leave people poorer in security, trust, opportunity and hope.
A new United Nations report argues that governments need a broader way to judge whether development is working. It does not call for replacing GDP. It calls for complementing it with a practical dashboard that captures what GDP misses: well-being, equity, sustainability and resilience.
Growth is not the whole story
Between 1980 and 2025, global economic activity contracted only twice: During the 2009 financial crisis and the COVID-19 pandemic in 2020. By GDP’s measure, the world has rarely been richer.
Yet trust in institutions has eroded, inequality has widened in many places and environmental pressures have intensified. In some wealthy countries, young people report high levels of anxiety and isolation. The gap between economic output and lived experience is becoming harder to ignore.
“What we measure shapes what we value,” said Pedro Manuel Moreno, Deputy Secretary-General and Acting Secretary-General of UN Trade and Development (UNCTAD). “That is the question this work now places squarely on the international agenda.”
A dashboard for the real economy
The report proposes 31 indicators built around four areas: Peace, human rights and respect for the planet; current well-being; equity and inclusion; and sustainability and resilience.
The dashboard would track material conditions, health, education, social cohesion, institutional quality, environmental conditions, poverty, inequality and the assets societies pass to future generations – including produced, human, social, institutional and natural capital.
It is designed to be country-owned, so governments can adapt it to national priorities and capacities. Close to half of the indicators are drawn from the Sustainable Development Goals, meaning many countries already have data systems in place.
Why it matters now
Unlike earlier Beyond GDP efforts, this report comes with a political track. It was produced in response to a direct request from Member States under the Pact for the Future and will now move into an intergovernmental process at the General Assembly, led by Spain and Guyana.
It also recognizes that progress does not stop at borders. One country’s well-being can be shaped by decisions made elsewhere — through emissions, trade, finance, technology and supply chains.
UNCTAD, together with the UN Development Programme and partners across the UN system, will support countries that choose to begin testing the framework.
“GDP tells us how fast an economy is growing,” Mr Moreno said. “It does not tell us where we are headed, what we pass on the way, or what we leave behind for the next generation.”
The US-Israel war on Iran could increase poverty for millions across the MENA, as people grapple with double-digit price hikes, writes Jad Chaaban.
War has always been a mechanism that destroys some economies while enriching others, often following old imperialist frameworks, writes Jad Chaaban. [GETTY]
The costs of the current US-Israel war on Iran are often measured in cold, macroeconomic abstractions. We hear of “supply disruptions,” “energy shocks,” and “inflationary pressures”. But behind the fluctuating price of a Brent crude barrel, there is a far more devastating and silent reality: the systematic destruction of human lives and the rapid descent of millions of our neighbours into poverty.
As researchers and policymakers, we have a moral and professional duty to re-centre the discourse on the people of this region. While some economies may benefit from military investments, the direct victims of this conflict are becoming invisible in the grand geopolitical narrative.
The latest macroeconomic projections from April 2026 reveal a grim economic landscape. The International Monetary Fund (IMF) has been forced to slash its growth projections for the Middle East and North Africa (MENA) region to nearly a quarter of its original estimates. We are witnessing severe contractions even in countries once considered stable, and these economic shocks ultimately impact livelihoods.
The mechanics of this crisis are rooted in the extreme vulnerability of the Arab states. Our region is uniquely exposed to price shocks due to our heavy dependency on food imports. When conflict disrupts trade routes, it is the poorest families who feel the immediate sting of inflation. While the United States maintains a low inflation rate, the Arab region is grappling with double-digit price hikes.
Perhaps most concerning is the “remittance trap.” Many Arab nations rely heavily on financial lifelines from workers in the Gulf Cooperation Council (GCC) countries. In Egypt, these workers’ remittances from the GCC accounted for over $22 billion in 2022—nearly 5% of its GDP.
In Jordan and Lebanon, the figures are even higher, reaching 7% and 8% respectively. As the economies of the Gulf contract under the weight of regional instability, these flows are drying up, triggering a domino effect of poverty across the Levant and North Africa.
Our simulations suggest that under current conditions, we will see an additional 4.4 million people fall into poverty across the Arab region. If the war continues to drag on and the GCC economies contract further, that number will likely climb to nearly 5.3 million. These are not just statistics; they represent people whose education will be interrupted, whose health will be compromised, and whose potential will be stifled by traumas that will last for decades.
War has always been a mechanism that destroys some economies while enriching others, often following old imperialist frameworks. But the human cost of this specific conflict is a compounded deterioration of human development.
Women and children, as is so often the case, are bearing the heaviest burden. Refugees and displaced populations, who already have limited capacity to recover, are being pushed to the absolute brink.
The priority must be an immediate end to this destructive war. However, even if the guns fall silent tomorrow, the road to recovery will require more than just rebuilding physical infrastructure. We must design a new model for economic growth that is explicitly biased toward the poor—one that ensures an equitable distribution of resources and prevents poverty from becoming a hereditary condition passed down from one generation to the next.
We cannot allow the “invisible” victims of this war to remain so. The data is clear: the cost of this conflict is being paid in the form of human capital and the dignity of the Arab people. It is time for our policies to reflect that reality.
Jad Chaaban
Dr. Jad Chaaban is an economist and public policy expert, and currently an associate professor of economics at the Doha Institute for Graduate Studies. He was the Lead Author of the United Nations Development Programme (UNDP) Arab Human Development Report 2016, and a member of the Advisory Board of UNDP’s Global Human Development Report (HDR). His research focuses on sustainable human development, political economy and public economics.
In April 2026, with the help of the United States, Libya’s two parallel governments reached an agreement on a unified national budget for the first time since 2013. The two administrations also participated in military exercises sponsored by the United States African Command (AFRICOM) that were held in Libya for the first time. While these developments may signal cooperation between the rival governments, realities on the ground belie any optimism about imminent reunification. Endemic corruption within each government works to perpetuate the status quo. Well-armed militias run patronage networks that help keep each government in place, while outside powers continue to aid their Libyan clients by way of various military and economic schemes, hindering unification. The United Nations continues to call for a stop to Libyan groups’ weapons smuggling and illicit petroleum exports. Although the United States and Europe may encourage higher Libyan oil production to make up for the shortfall caused by the closure of the Strait of Hormuz, any additional revenues are unlikely to filter down to the Libyan people.
A Country Plagued by Divisions
Libya remains deeply divided. The internationally recognized Government of National Unity (GNU) is based in the capital city of Tripoli, but its authority extends only to the western part of the country. The GNU is led by Abdul Hamid Dbeibah, who was supposed to be only an interim prime minister until the nationwide elections that were scheduled for December 2021. After those elections were postponed, however, he stayed on as prime minister (the 2021 vote has yet to be rescheduled). His government is supported by various militias based in and around Tripoli.
In eastern Libya, a second government, the House of Representatives (HoR), traces its origins to the June 2014 elections that created that body. Months after the vote, Libya’s supreme court ruled that those elections were unconstitutional and that the HoR must be dissolved, but instead the HoR relocated to Tobruk, near Libya’s border with Egypt, and became the base of the eastern government. The HoR is supported militarily by the so-called Libyan National Army led by self-anointed Field Marshal Khalifa Haftar. Based in the city of Benghazi, Haftar is the real power in the east. In 2019-2020, Haftar attempted to take over the entire country, but his offensive was stymied by Tripoli-backed forces and by Turkey, which provided this government with advanced military equipment and personnel. Haftar then retreated to his stronghold in Benghazi. Now, his forces control the eastern coast and much of the interior.
The challenges of holding new national elections and creating a unified national government have frustrated the UN Support Mission in Libya (UNSMIL) for many years. On April 22, 2026, UNSMIL head Hanna Tetteh stated that the political process was stalled, delaying efforts to reunify the country. She voiced frustration, stating, “Allowing status quo actors to evade their responsibilities will only undermine efforts to preserve Libya’s unity and wealth and delay the path to sustained peace, stability, and development.” Her comments echoed those of past leaders of UNSMIL who resigned after facing similar intransigence.
Some Positive Developments
On April 11, 2026, the two governments approved the first unified state budget since 2013, a potential step toward unifying fractured state institutions and reducing corruption. The High State Council, the legislative body of the GNU, and the HoR agreed on a national budget of 190 billion Libyan dinars, equivalent to about $30 billion. The central bank governor, Naji Issa, stated optimistically that “this is a clear declaration that Libya is capable of overcoming its differences when a unified vision for its future is forged.” Representatives from the two governments said that the unified budget would help ensure a fair distribution of resources and would allocate substantial funds to improve the state-run National Oil Corporation (NOC).
Efforts to agree on a unified budget were assisted by Massad Boulos, Senior Advisor to President Donald Trump for Africa and Arab and Middle Eastern Affairs and the father-in-law of Trump’s daughter Tiffany. Boulos praised the new budget as not only supporting nationwide development projects in Libya but also as shoring up the NOC to allow it to increase energy production and to generate higher state revenues.
Given the current difficulties of exporting oil and gas from the Gulf because of the Iran war’s effective closure of the Strait of Hormuz, the Trump administration may be looking to Libya to meet part of the worldwide oil shortfall. Libya has the largest oil reserves in Africa, estimated at 48 billion barrels, and the country’s oil production has recently increased. Libya reportedly produced 1.43 million barrels per day (b/d) in early April 2026—one million more than it had produced in the previous month, and a ten-year high. Other reports have indicated that Libya plans to substantially increase natural gas exports to Europe by 2030. Currently the country exports very little gas via the Greenstream pipeline that runs from Libya to Sicily, but there are hopes of boosting this with the assistance of foreign companies.
In early April 2026, AFRICOM for the first time sponsored military exercises in Libya, called Flintlock, in partnership with 30 African and European countries. The exercises are designed to improve counterterrorism efforts in the Sahel and perhaps also to push back against Russian influence in the region. US Embassy Libya (which is currently based in Tunisia because of security concerns) said that Libya’s hosting of the exercises “highlights the ability of Libyan security institutions from east and west to work together to contribute to and lead regional security cooperation,” and that it was an “important step toward stronger, more unified Libyan military institutions.” During the exercises, Khalifa Haftar’s son Saddam, who serves as deputy commander of his father’s forces, said that the exercises reaffirmed “Libya’s position as a reliable partner in supporting regional and international peace and security.”
Meddling Across Borders and Corruption Continue Unabated
Such upbeat words belie facts on the ground, however. Haftar’s forces and allied militias have reportedly aided the Rapid Support Forces (RSF) in Sudan’s brutal civil war by taking over the so-called triangle area where the borders of Sudan, Libya, and Egypt meet. This territorial hold has allowed the RSF to smuggle gold, drugs, and people into Libya, often receiving arms and illicit petroleum exports in return. The RSF has committed numerous human rights abuses, including the execution of thousands of civilians in the town of al-Fasher in the North Darfur province, which makes it difficult to say, as Saddam Haftar claimed, that Libyan security forces are reliably contributing to regional peace and security.
Both Libyan administrations are engaged in extensive corruption schemes. In the words of one analyst, in western Libya “the appearance of state-building masks a far more predatory ecosystem. Over the past decade, ministries, public agencies, and state-owned enterprises have morphed into personal fiefdoms for factions that operate more like organized crime families than political actors.” In eastern Libya, where most of the country’s oil fields are located, Saddam Haftar has, as that same analyst put it, “refined the art of large-scale fuel smuggling, exploiting Libya’s heavily subsidized fuel system to siphon off billions [of dollars] annually.” Such smuggling schemes deprive the state of hard currency and contribute to a collapsing welfare system. The International Monetary Fund has noted persistently large fiscal deficits, which have put pressure on the exchange rate, foreign exchange reserves, and inflation, exacerbating social tensions. Many Libyan citizens are angry over their living conditions, given that Libya is an oil-rich country with only 7.5 million people but according to 2023 data has a poverty rate of nearly 40 percent.
Human rights groups have castigated both of Libya’s governments. Human Rights Watch, for example, recently noted that “armed groups, smugglers, and state authorities in Libya have subjected migrants, including infants and young children, to arbitrary detention, extortion, forced labor, sexual violence, and other serious abuses.” It also reported widespread arbitrary detention, torture and ill treatment in facilities run by state-affiliated forces and armed groups.
The Damaging Role of Outside Players
External powers, including Egypt, Russia, Turkey, and the United Arab Emirates (UAE), are known to have assisted Libya’s rival factions to further their own agendas, with other outside actors such as the European Union (EU) also contributing negatively to the situation.
A March 2026 report by the UN Security Council’s Panel of Experts on Libya, mandated to monitor weapons embargo violations and other illicit activities involving the North African country, discusses the involvement of foreign actors in illegal schemes that fund Libya’s militias. The UN report confirmed the findings of a 2025 investigation by the Italian publication Il Foglio of an elaborate scheme involving the UAE and a notorious Libyan businessman known as Ahmed Gadalla, who is close to Saddam Haftar. The investigation showed that foreign actors continue to violate the UN embargo on weapons and other military items destined for Libya. It also revealed either lapsed judgment or a cover-up by the EU’s naval mission, Operation IRINI, which was established to monitor the arms embargo.
According to Il Foglio, in July 2025, a container ship that left the UAE port of Jebel Ali was intercepted by frigates associated with IRINI in the Mediterranean Sea near the port of Derna, Libya, after a tip-off from US intelligence. The cargo ship was then escorted to the Greek port of Astakos for inspection. Although the ship officially declared that it was only carrying cosmetics, cigarettes, and electronic equipment, it was actually transporting 240 pickup trucks destined for Libya, 86 of which were armored. Typically used for mounting machine guns, these trucks are the vehicles of choice for Libyan and Sudanese militias. The UN has defined these trucks as military equipment and their shipment is considered a violation of the embargo.
The investigation revealed that the decision to allow the ship to leave for Libya was the result of “secret negotiations” between the EU, Greece, the UAE, and the two Libyan authorities in the east and the west. According to Il Foglio, Greece—worried about the wave of migrants coming from eastern Libya to Crete—sought to avoid offending Haftar and to prevent any retaliation in the form of a new irregular migration surge, decided that allowing the cargo to Libya was the “lesser evil.” Instead of offloading the trucks in Tripoli, the ship docked in Misrata, a port under the control of Dbeibah’s government. Some 209 trucks were offloaded there; the rest were delivered to Benghazi, suggesting that both Libyan governments were involved in the scheme. The March 2026 UN report noted that 26 of the trucks wound up in the hands of a Libyan militia, al-Katiba 55, that run a notorious prison camp for migrants near Tripoli.
No Political Solution in Sight
Libya’s government is likely to remain divided for some time. Each administration benefits from the status quo through corruption schemes, while the militias depend on patronage that they receive from the governments or on revenues from their own rackets. While recent cooperation to agree on a unified budget may be encouraging, the fundamentals of the situation have not changed.
The decision by AFRICOM to host military exercises in Libya and to include military units belonging to each Libyan administration has done nothing to foster unity. Indeed, all it has probably achieved is to make those factions feel important. Rather than trying to forge unity through military posturing, the international community should increase its efforts to stop oil smuggling out of Libya in exchange for arms.
Some moves in that direction are already underway. On April 14, 2026, the UN Security Council unanimously passed a resolution to reinforce international efforts to monitor and prevent illicit oil smuggling from Libya. The resolution reaffirmed that the NOC is the sole entity authorized to market Libya’s oil and called for a prohibition on depositing Libyan oil revenues anywhere but in official accounts.
Yet there appears to be no real mechanism to enforce such a resolution except to target individuals and entities with sanctions—an approach that obviously has not worked well in the past. Only if meaningful punitive measures are applied to those involved in illicit oil sales will there be pressure on the two administrations to hold national elections and to bring about a unified government.
Aerial view of Muscat, Oman, showcasing the coastline, urban architecture, and surrounding mountains. by Smitesh Parekh via pexels
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Middle East Building Automation Market Set to Surge with Smart City Boom and Sustainability Push
Rising urbanization, energy efficiency demands, and smart infrastructure investments are driving a transformative decade for building automation across the Middle East.
Introduction: A Region Transforming Through Intelligent Infrastructure
The Middle East is undergoing a profound transformation—one that is redefining how cities are built, managed, and experienced. At the heart of this shift lies building automation, a technology-driven approach that integrates systems such as HVAC, lighting, security, and energy management into a unified, intelligent ecosystem.
According to Renub Research, the Middle East Building Automation Market is projected to grow from US$ 6,842.33 million in 2025 to US$ 16,306.28 million by 2034, expanding at a robust CAGR of 10.13% during 2026–2034.
This impressive growth reflects a convergence of powerful forces—rapid urbanization, government-led smart city initiatives, rising energy costs, and increasing demand for sustainable, high-performance buildings.
Understanding Building Automation: The Backbone of Smart Infrastructure
Building automation refers to the integration of advanced technologies—sensors, controllers, software platforms, and communication networks—to automate and optimize building operations.
From regulating temperature and lighting to enhancing security and fire safety, these systems offer:
Real-time monitoring and control
Predictive maintenance
Energy optimization
Enhanced occupant comfort
In a region known for extreme climatic conditions, such as the Middle East, these capabilities are not just beneficial—they are essential.
1. Rapid Urbanization and Mega Infrastructure Projects
The Middle East is witnessing one of the fastest urbanization rates globally. Countries across the Gulf Cooperation Council (GCC) are investing heavily in large-scale infrastructure projects, including:
Smart cities
Airports and transport hubs
Luxury residential complexes
Commercial towers and mixed-use developments
By 2050, nearly 90% of GCC populations are expected to reside in urban areas, creating immense demand for efficient building management systems.
Mega-events such as the AFC Asian Cup 2027, Asian Winter Games 2029, Expo 2030, and FIFA World Cup 2034 are further accelerating infrastructure development, particularly in Saudi Arabia.
2. Government-Led Smart City Initiatives
Governments across the region are actively promoting digital transformation through ambitious smart city programs.
For example:
The UAE has committed over USD 1 billion toward smart infrastructure initiatives.
Saudi Arabia’s Vision 2030 emphasizes sustainable urban development and intelligent infrastructure.
These initiatives aim to:
Reduce carbon emissions
Optimize energy consumption
Enhance urban living standards
Building automation plays a central role in achieving these goals by enabling efficient, data-driven building management.
3. Rising Demand for Energy Efficiency
Energy consumption in the Middle East is significantly driven by cooling requirements. With soaring electricity costs and environmental concerns, building owners are increasingly adopting automation systems that:
Adjust energy usage based on occupancy
Optimize HVAC performance
Reduce wastage
This not only lowers operational costs but also aligns with global sustainability targets.
4. Enhanced Focus on Occupant Comfort
Modern buildings are no longer just structures—they are experiences. High-end commercial and residential developments prioritize:
Indoor air quality
Lighting personalization
Temperature control
Building automation ensures a seamless, comfortable environment, making it a critical factor in premium real estate projects.
Market Challenges: Barriers to Widespread Adoption
1. High Initial Investment Costs
Despite long-term benefits, the upfront cost of implementing building automation systems remains a significant challenge.
Expenses include:
Advanced sensors and controllers
Software platforms
Integration with existing infrastructure
Retrofitting older buildings can be particularly costly, limiting adoption among small and medium-scale property owners.
2. Shortage of Skilled Workforce
The deployment and maintenance of sophisticated automation systems require specialized expertise in:
Software engineering
Networking
System integration
The region currently faces a shortage of trained professionals, often relying on international expertise, which increases costs and project timelines.
Segment Insights: Expanding Across Multiple Dimensions
1. Fire Protection Systems Integration
The integration of fire safety systems with building automation is becoming increasingly critical.
Modern systems offer:
Real-time monitoring
Automated alerts and responses
Enhanced safety compliance
This is particularly important in high-rise buildings and large public spaces, where fire risks can be catastrophic.
2. Security and Access Control Systems
Security infrastructure is evolving rapidly with the adoption of:
Biometric authentication
RFID and smart cards
Mobile-based access systems
Integration with automation platforms allows for centralized control and real-time threat detection, enhancing overall building security.
3. Commercial vs. Residential Adoption
While both segments are growing, commercial buildings dominate the market due to:
Higher energy consumption
Complex operational requirements
Need for centralized management
Hotels, malls, airports, and office complexes are leading adopters of building automation technologies.
4. Hardware and Software Evolution
The market is witnessing rapid advancements in both hardware and software components:
Hardware: Sensors, actuators, controllers, energy meters
The Middle East building automation market is highly competitive, with global giants leading technological advancements.
Major players include:
Siemens AG
Honeywell International Inc.
LG Electronics
Hitachi, Ltd.
Schneider Electric
Electrolux
Samsung
Haier Inc.
These companies are investing heavily in innovation, partnerships, and regional expansion to strengthen their market position.
Recent Developments
ABB launched its Cylon Smart Building Management System in the Middle East, offering scalable automation solutions.
Honeywell International Inc. introduced self-testing fire alarm systems, enhancing safety and maintenance efficiency.
Siemens AG expanded its smart infrastructure portfolio for Middle Eastern projects.
Schneider Electric partnered with regional developers to deploy AI-driven energy management systems.
Samsung integrated IoT-based smart home solutions into luxury residential projects.
LG Electronics launched advanced HVAC systems tailored for extreme climates.
Hitachi, Ltd. enhanced its building automation software with predictive analytics features.
Haier Inc. expanded its smart appliance ecosystem in the Gulf region.
Electrolux introduced energy-efficient solutions for commercial buildings.
ABB showcased integrated automation solutions at major regional exhibitions.
Future Outlook: A Decade of Intelligent Growth
The future of the Middle East building automation market is undeniably promising. With continuous investments in smart infrastructure, the region is poised to become a global leader in intelligent building solutions.
Key trends shaping the future include:
Integration of Artificial Intelligence and Machine Learning
Expansion of IoT-enabled devices
Increased adoption of cloud-based platforms
Focus on sustainability and carbon neutrality
As cities become smarter and more connected, building automation will serve as the backbone of this transformation.
Final Thoughts
The Middle East building automation market is not just growing—it is evolving into a cornerstone of modern urban development. With a projected market size exceeding US$ 16 billion by 2034, the region is setting new benchmarks in smart infrastructure and sustainability.
While challenges such as high costs and skill shortages persist, ongoing technological advancements and government support are expected to overcome these barriers.
According to breaking news in Pakistani media, the World Bank has officially reclassified Pakistan from its South Asia regional grouping to the Middle East and North Africa (MENA) region for financial and analytical reporting, and this change will take effect in the World Bank’s reporting for the 2026 fiscal year.
The new group will be called the ‘North Africa, Middle East, Afghanistan, and Pakistan (MENAAP) region’. This move indicates collective economic structures, strengthening economic ties with the Gulf region, and regional logistic links. In this way, Pakistan will now be evaluated beside economies like Saudi Arabia, Iran, the UAE, Kuwait, Iraq, Syria, Libya, Egypt, and Morocco in World Bank reports, separating it from the South Asian countries: India, Bangladesh, Sri Lanka, Nepal, Maldives, and Bhutan.
Generally, Pakistan has been considered a part of South Asia, and the majority of international organizations and global think tanks include it in the South Asian group. Its sharing history with Bangladesh and India, and the founding membership of the South Asian Association for Regional Cooperation (SAARC) reflects its association with South Asia. With some exceptions, the same position is applicable in the case of Afghanistan.
Pakistan and Afghanistan are also members of the Central Asia Regional Economic Coope ration (CAREC) and the Economic Cooperation Organization (ECO). This indicates their active participation in the multilateral collaboration with the Central Asian countries. The Silk Road, sharing history, common political heritage, and similarity in culture, ethnicity, and languages, associates these countries with Central Asia.
The strategic location of Pakistan at the junction of South Asia, the Middle East, and Central Asia justifies the possibility of its attachment with all three regional groups. Apparently, the listing of Pakistan and Afghanistan in the MENAAP group, during the Israel/ USA-Iran war, creates ambiguities for geo-economic strategies and future planning.
The Middle East and North Africa region (MENA) is a loosely defined area spanning from Morocco to Iran. The IMF and World Bank include all 21 Arab League nations plus Djibouti, Mauritania, Somalia, Sudan, Iran, and Israel in this group. This group (MENA) is characterized by high, yet varied, economic dependence on natural resources (mainly oil and gas), significant water scarcity, and shared environmental challenges.
The Middle East and North Africa region (MENA) exists as an alternative to the concept of the Greater Middle East, which comprises the bulk of the Muslim world. However, the region has no standardized definition, and groupings may vary. The different organizations define the region as consisting of different territories.
The International Monetary Fund (IMF) includes Afghanistan, Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Pakistan, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, United Arab Emirates, and Yemen in the list of the Middle East and North Africa (MENA) since 2003. However, the World Bank also includes Israel and Malta in the list of the Middle East and North Africa (MENA). But Afghanistan, Pakistan, Mauritania, Somalia, and Sudan have not been included in the World Bank list. Now, the World Bank has included Pakistan and Afghanistan in this list.
The comparison of the economies in South Asia and the ‘Middle East and North Africa’ shows the significant disparities between these two regions. Based on per capita income, all South Asian countries are classified as middle-income countries. However, 8 high-income countries are included in the list of the Middle East and North Africa. Excluding the high-income countries, the aggregate gross domestic product (GDP) of the Middle East and North Africa is 2.2 trillion US dollars, which is 4.5 trillion US dollars (almost double) in the case of South Asia. The per capita income of the Middle East and North Africa is 2971 US dollars, which is 2690 US dollars for South Asia. Obviously, this average is completely changed after the inclusion of 8 high-income countries in the Middle East and North Africa. In comparison, of gross domestic product (GDP) and per capita income, Pakistan is much behind the average of South Asia and the Middle East and North Africa, while Afghanistan is not even comparable.
The share of industry in the gross domestic product of Pakistan is around 20 percent, which is more than 25 percent in the case of South Asia, and 33 percent in the case of the Middle East and North Africa (excluding high-income countries). The most incomparable socioeconomic indicator is poverty. More than 47 percent of the population of Afghanistan, and more than 21 percent of the population of Pakistan, earn less than 3 US dollars in a day. This ratio is 14.4 percent in the case of the Middle East and North Africa and 3.8 percent in South Asia.
The most important indicator that does not match Pakistan with the Middle East and North African economies is the inflow of foreign investment. From the foreign investment point of view, Pakistan does not seem to be a part of the Middle East and North Africa. The net inflow of foreign direct investment as a percentage of gross domestic product is 0.7 percent in Pakistan, and this is the same on average for South Asian countries. The average inflow of foreign direct investment as a percentage of gross domestic product is 3.8 percent in the countries in the Middle East and North Africa. Even after the exclusion of high-income countries, it is 2.3 percent in the Middle East and North Africa. The world average of the net inflow of foreign direct investment as a percentage of GDP is 1.3. This shows that the countries in the Middle East and North Africa have the capacity to attract foreign investment.
The shares of exports and trade in the gross domestic product of Pakistan indicate a trade deficit. The share of trade is more than double its exports, which shows that the size of imports is greater than exports. A similar position is depicted by South Asia.
However, Pakistan is facing the worst situation in external debts. The magnitude of its external debt is nearly 34 percent of its GDP, which is 20 percent in Afghanistan. The average external debt of the countries in South Asia is also 20 percent, and 27 percent in the case of the Middle East and North Africa.
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