This document summarizes a regional conference on investment and inclusive growth in the Middle East and North Africa focusing on small and medium enterprise (SME) policies. It notes that SMEs are important for inclusion, economic growth, and government revenues. SMEs account for a large percentage of jobs in the region but formal employment and new business creation in SMEs is relatively low compared to other regions. The document outlines main challenges for SMEs such as regulatory environments and access to financing, as well as opportunities like growing domestic markets. It recommends policies to improve the business climate, adopt comprehensive SME strategies, and strengthen regional cooperation and capacity building to better support SME development and growth.

1. REGIONAL CONFERENCE
Investment & inclusive growth in
the midst of crisis
SME policies in the Middle
East & North Africa
11 May 2016

2. Why focus on SMEs?
Inclusion (cost of rebellion,
women & youth)
Economic growth
Government revenues
2MENA-OECD Competitiveness Programme
Resilience,
stability
 Jobs: SMEs generally operate in labour intensive sectors
and account for large % of job creation
13% 13%
6%
13%
23%
30%
17%
31%
Egypt Jordan Lebanon Tunisia
Unemployment
Youth unemployment
Sources:2013. World Development indicators. Youth group: 15-24 years.

3. SMEs landscape in MENA
3MENA-OECD Competitiveness Programme
3
Formal employment in SMEs is relatively low… … as is enterprise creation
0.63
0 2 4 6 8 10
India
Egypt
Algeria
Jordan
Morocco
Canada
Tunisia
MENA average
Oman
UAE
Qatar
Brazil
Switzerland
France
Israel
Russia
OECD
UK
Sources: IFC (2014) MSME Country Indicators and World Bank (2014) Entrepreneurship Database.
New limited liability companies per 1 000
working age people, average 2004-2012
13.9
72.7
31.231.0
4.5
12.3
21.6
5.9 5.5
19.5
39.5
23.425.3
19.9
80.0
46.9
37.6
57.858.9
34.6
42.1
0
10
20
30
40
50
60
70
80
90
Algeria
Bahrain
Egypt
Jordan
Kuwait
Lebanon
Morocco
Oman
Qatar
SaudiArabia
UAE
MENAaverage
Brazil
Russia
China
Canada
France
Israel
Switzerland
UK
USA
Source:IDC(2014)MSME…
% of total employment SME density (per 1000 people)
SME “density” and employment, 2009 or latest

4. Potential to integrate in global & regional GVCs
4MENA-OECD Competitiveness Programme
4
Sources: OECD & World Bank Group. Inclusive Value Chains. G20 discussion report. October 2015.

5. Main challenges & opportunities for SMEs
5MENA-OECD Competitiveness Programme
Challenges
• Regulatory and business
environments need to improve
• Access to external finance
remains limited
• Insufficient enterprise support
networks and services
• Lack of quality vocational and
managerial skills for SME growth
Opportunities
• Growing domestic
markets
• Progressive integration
and economic openness
• New prospects for
entrepreneurship
• Improving literacy rates
and education levels

6. SME policies in MENA at the regional level
6MENA-OECD Competitiveness Programme
0
1
2
3
4
5
1. Education and training for
entrepreneurship, including women's
entrepreneurship
2. Efficient bankruptcy procedures and
“second chance” for entrepreneurs
3. Institutional and regulatory
framework for SME policy making
4. Operational environment for
business creation
5.a. Support services for SMEs and
public procurement
5.b. Public procurement
6. Access to finance for SMEs
7. Supporting SMEs to benefit from
Euro-MED networks and partnerships
8.a. Enterprise skills
8.b. Innovation
9. SMEs in a green economy
10. Internationalisation of SMEs

7. Recommendations for better SME policies
7MENA-OECD Competitiveness Programme
For MENA countries
Step up efforts to improve the business climate
Adopt strategic & comprehensive SME policies
Strengthen monitoring & evaluation to assess policy effectiveness
For international partners
Foster the exchange of good practices among MENA countries
& beyond
Contribute to capacity building & strengthening of institutions
Strengthen regional & international business networks

8. Contact details:
Pilar SANCHEZ-BELLA
Policy Analyst
Middle East and Africa Division
e-mail: carlos.conde@oecd.org