RABAT, Jan. 30 (Xinhua) -- International Monetary Fund (IMF) Managing Director Christine Lagarde on Tuesday called for the reinvigoration of the economic growth model in the Arab World.

Speaking at a high-level conference on Arab economic growth in the Moroccan city of Marrakesh, Lagarde said the old model where the state is employer of first resort is no longer viable, stressing that the private sector needs to step in and step up.

She insisted that government actions can help in leveling the playing field for private firms by combating corruption, increasing competition, and taking advantage of global trade and new technologies.

Lagarde said that another key priority in boosting economic growth relates to integrating youth, women, rural populations, and refugees through better education and active labor market policies.

"Fiscal policy can and must be redesigned to support inclusive growth in the region," IMF chief said, noting that social spending, on social safety nets, health and education services, is less than 11 percent of GDP compared to 19 percent in emerging Europe.

Infrastructure needs are also large in many countries, she insisted.

She said that more than 27 million young people in the region will join the workforce over the next five years, a region where youth unemployment is the highest in the world, averaging 25 percent.

"Today's youth are the Arab region's greatest potential. We must heed their aspirations and rise to their expectations," she stressed.

Co-hosted by IMF, the Arab Monetary Fund, Arab Fund for Social and Economic Development and the government of Morocco, the high-level conference focuses on promoting higher economic growth, job creation, and inclusiveness in the Arab World.

Held under the theme "Opportunity for All: Promoting Growth, Jobs and Inclusiveness in the Arab World," the two-day conference brings together high-level policy makers, corporate executives, academics, youth, media and civil society representatives from countries in the Arab World and beyond.