The World Economic Forum today launched its report The Middle East and North Africa at Risk 2010, revealing that growth trends across the region are placing rising and competing demands on water, energy and infrastructure. The report was presented at the start of the World Economic Forum on the Middle East and North Africa, taking place in Marrakech, Morocco, from 26 to 28 October.
Together, the risks to water, energy and infrastructure have the potential to impede economic progress as well as heighten the danger of critical failures in essential services. The report, written in collaboration with Oliver Wyman, the management consulting arm of Marsh & McLennan Companies, discusses the trends and uncertainties that are driving the evolution of these risks and the resulting trade-offs involved in formulating response strategies.
The report argues that more integrated water and energy management strategies within and between MENA countries are absolutely critical, given the limited resources that must be shared across sectors and geographic boundaries. Energy security is an increasingly urgent risk despite extensive fossil fuel reserves in some MENA countries. The region’s highly energy-intensive growth model is exacerbating the impact of resource depletion, limited conversion capacities and unbalanced regional distribution of fossil fuels. Increasing the price of energy and water across the region could help spur investment in more resilient distribution networks while creating incentives to reduce demand and increase efficiency; however, price increases create difficult trade-offs for economic and social development.
Underinvestment in infrastructure is a driver of the energy and water challenges as well as a chronic risk to growth. Regionally-focused infrastructure at greater scale and higher levels of quality would help mitigate these chronic risks and increase regional resilience to shocks. However, much-needed private sector participation in infrastructure projects is hampered by barriers in the legal and regulatory environments.