Majid Al Futtaim and McKinsey launch Economic Integration Barometer

Set to be launched later today during the World Economic Forum in Davos, the new MENAP Economic Integration Barometer by Majid Al Futtaim in collaboration with McKinsey & Company will keep track of key economic integration indicators in the MENA region, and the region’s interconnectedness with other world markets.

According to the CEO of Majid Al Futtaim, Ahmed Galal Ismail, the launch of the Barometer comes at a time when “greater economic integration”  within the Middle East and the Arab countries in North Africa could help governments and businesses further push their frontiers.

“Over the past years, the region has taken 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 MENA. That while our success – more than ever in this age of instability – hinges on our collective efforts to champion improved economic integration across our region,” said Ismail.

Developed with consultants from McKinsey & Company and in collaboration with the World Economic Forum, the MENAP Economic Integration Barometer tracks progress on four key integration metrics: trade, intangibles, capital, and people.

Having now established a baseline across the metrics (and the dozens of underlying performance indicators), the authors have a clear picture of “where the region stands today”, said Ismail. As time progresses, the Barometer will shed light on key opportunities and how progress is evolving.

Ismail: “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, centred around more free movement of goods, people, capital, data, and intellectual property.”

Sven Smit, a senior partner at McKinsey & Company, said that in the development of improvement plans, leaders should keep in mind the “very diverse nature” of the region. “What will be needed next to the barometer, which just says here is the baseline, is ‘what is the narrative for this region?’, which will be very diverse across countries.”

A $2.5 trillion GDP opportunity
In the run-up to the launch this afternoon, Ismail said that one of the most notable findings of the Barometer’s inaugural edition is that the Middle East is unrepresented on the global economic map. While the region is home to 8.5% of the world’s population, it only accounts for 3.4% of global GDP.

“Based on pure math, the Barometer pinpoints a $2.5 trillion GDP opportunity just by the MENA region catching up with global averages,” said Ismail.