nep-ara New Economics Papers
on Arab World
Issue of 2009‒10‒31
ten papers chosen by
Quentin Wodon
World Bank

  1. Oil Prices and Bank Profitability: Evidence from Major Oil-Exporting Countries in the Middle East and North Africa By Heiko Hesse; Tigran Poghosyan
  2. A structural analysis of foreign aid to ten Mediterranean countries By Larru, Jose Maria
  3. Worthy Transfers ? A Dynamic Analysis of TurkeyÕs Accession to the European Union By GŸl ERTAN …ZG†ZER; Luca PENSIEROSO
  4. The Effect of Mergers and Acquisitions on Bank Performance in Egypt By Ahmed Mohamed Badreldin; Christian Kalhoefer
  5. The Death of Theology: The Complexity of the New Islamic Theology (Al-Kalam Al-Jadid) in Philosophy of Moral (Kematian Teologi: Kompleksitas Teologi Islam Baru dalam Dimensi Etika) By Hardiansyah, Suteja
  6. Meninjau Ulang Diskursus Teologi Islam dalam Dunia Modern By Hardiansyah, Suteja
  7. Poverty, education and employment in the Arab-Bedouin society: A comparative view By Suleiman Abu-Bader; Daniel Gottlieb
  8. FDI and growth: A new look at a still puzzling issue By Dalila NICE-CHENAF (GREThA UMR CNRS 5113); Eric ROUGIER (GREThA UMR CNRS 5113)
  9. Institutional and Regulatory Frameworks of Privatisation and FDI: A Comparative Study between Egypt and Argentina By Naguib Shokralla, Rania
  10. Sovereign wealth funds: toward a new state capitalism? (In French) By Bertrand BLANCHETON (GREThA UMR CNRS 5113); Yves JEGOUREL (LAREFI)

  1. By: Heiko Hesse; Tigran Poghosyan
    Abstract: This paper analyzes the relationship between oil price shocks and bank profitability. Using data on 145 banks in 11 oil-exporting MENA countries for 1994-2008, we test hypotheses of direct and indirect effects of oil price shocks on bank profitability. Our results indicate that oil price shocks have indirect effect on bank profitability, channeled through country-specific macroeconomic and institutional variables, while the direct effect is insignificant. Investment banks appear to be the most affected ones compared to Islamic and commercial banks. Our findings highlight systemic implications of oil price shocks on bank performance and underscore their importance for macroprudential regulation purposes in MENA countries.
    Keywords: Banks , Commodity price fluctuations , External shocks , Middle East , North Africa , Oil exporting countries , Oil exports , Oil prices , Oil sector , Profit margins , Profits ,
    Date: 2009–10–09
  2. By: Larru, Jose Maria
    Abstract: Although the literature on aid effectiveness is vast, most of it is based on cross-country studies and does not address the Mediterranean countries as a especial group. To fill this gap, this paper describes the main structural characteristics of overseas development assistance (ODA). ODA is analyzed by country, by donor, and by sector for 1960-2007 in ten Mediterranean countries. Different patterns among recipient countries are found, but a proliferation and concentration of donors is confirmed. A positive correlation between shocks in GDP and ODA is found when the whole sample of countries is analyzed, but when the Mediterranean economies are individually considered, the pro-cyclicality of the ODA is not confirmed, except in the case of Lebanon. FDI, remittances and ODA flows are compared. The three variables are positively correlated. ODA and remittances are indeed less volatile than FDI flows. But, whereas remittances are stable and strategic to Egypt, Lebanon and Turkey, ODA flows to Syria and the Palestinian territories are higher than remittances in volume, but more volatile. Egypt and Turkey are the main destinations of FDI to the region. Finally, it is shown that ODA does not offset the shocks of FDI or remittances.
    Keywords: aid; FDI; pro-cyclicality; remittances; volatility
    JEL: F35 O57
    Date: 2009–02
  3. By: GŸl ERTAN …ZG†ZER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Luca PENSIEROSO (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) FNRS)
    Abstract: In this paper, we build a two-country dynamic general equilibrium model to study whether European citizens would benefit from the eventual accession of Turkey to the European Union. The results ofthe simulations show that Turkey's accession to the European Union is welfare enhancing for Europeans, provided that Turkish total factor productivity (TFP) increases sufficiently after enlargement. In the model with no capital mobility, the Europeans are better off it the Turkish TFP increase bridges more than 31% of the initial TFP gap between Turkey and the European Union. That figure becomes 45% when capital mobility is introduced.
    Keywords: European Union, Turkey, Enlargement, Dynamic General Equilibrium, Open Economy Macroeconomics
    JEL: F41
    Date: 2009–10–01
  4. By: Ahmed Mohamed Badreldin (Faculty of Management Technology, The German University in Cairo); Christian Kalhoefer (Faculty of Business Administration, British University in Egypt)
    Abstract: Recent economic reforms in Egypt have significantly improved its macroeconomic indicators and financial sector. Banks have witnessed significant merger and acquisition activity as a result of these reforms in attempts to privatize and strengthen the banking sector. This study measures the performance of Egyptian banks that have undergone mergers or acquisitions during the period 2002-2007. This is done by calculating their return on equity using the Basic ROE Scheme in order to determine the degree of success of banking reforms in strengthening and consolidating the Egyptian banking sector. Our findings indicate that not all banks that have undergone deals of mergers or acquisitions have shown significant improvements in performance and return on equity when compared to their performance before the deals. Furthermore, extensive analysis was performed yielding the same results. It was concluded that mergers and acquisitions have not had a clear effect on the profitability of banks in the Egyptian banking sector. They were only found to have minor positive effects on the credit risk position. These findings do not support the current process of financial consolidation and banking reforms observed in Egypt, and provide weak evidence to support their constructive role in improved bank profitability and economic restructure.
    Keywords: Mergers and Acquisitions, Egypt, Banks, ROE, Performance Measurement, Reforms, ROA
    JEL: G21 G34
    Date: 2009–10
  5. By: Hardiansyah, Suteja
    Abstract: In the contemporary era, issues that emerged in ethics is not just simply a matter of quality of one's behavior toward other people directly, but also new issues like bioethics, nuclear, technology in general, environmental crisis, etc. This paper is to discuss new issues that emerge in contemporary debates in ethics and see how the new Islamic Theology (Kalam al-Jadid) highlighted it. The conclusion of this paper is the New Islamic Theology can not embrace the new problems that emerged in ethics and also failed to adapt the complexity system in ethics. This happens due to evolutionary ethics does not happen in ethics dimension of the theology.
    Keywords: cultural evolution; evolutionary ethics; New Islamic Theology (al-Kalam al-Jadid); complexity; emergence; meme; complex adaptive systems
    JEL: Z12 Z00 Z13 Y80
    Date: 2009–05–10
  6. By: Hardiansyah, Suteja
    Abstract: The question whether Islamic theology relevant in the modern world when faced with challenges of the various problems and/or modern crises, i.e. the ecological crisis, economy, progressivity of science, discourse of faith and reason, was forget one thing: the discourse naturalization. This paper will be deconstructed Islamic theological discourse in the modern world. The conclusion of this paper is when the problem discourse naturalization untouched, Islamic theology efforts will be useless and ignore the actual problem (attached paper is in Indonesian).
    Keywords: discourse; discourse naturalization; hegemony; historical; theology; capital economy
    JEL: Z12 Z0 Z13 Y80
    Date: 2009–05–11
  7. By: Suleiman Abu-Bader (Ben-Gurion University and Center for Research and Regional Development of the Negev); Daniel Gottlieb (Research and Planning Administration, National Insurance Institute and Ben-Gurion University)
    Abstract: The socio-economic situation of the Arab-Bedouin population in the Negev is examined in light of the general Israeli Arab population. Based on the Galilee Society's social survey for 2004 Israeli Arab poverty incidence was found to be 52% with nearly two thirds in persistent poverty. Among Bedouins in villages unrecognized by the Israeli government it was nearly 80% with poverty severity about 7 times higher than that of the mainstream Jewish population in Israel, i.e. excluding the – predominantly poor – Jewish ultra-orthodox society. Poverty was calculated according to various definitions. Similarly to international evidence, we found that education, age, family size, employment and occupation of the household head and the number of income earners in the family are important determinants of the probability to be poor. Arab women's student enrollment rates over different generations improved considerably, reducing the education-gap compared to Arab men. Bedouin households, especially in non-recognized villages, were found to have much less access to infrastructure compared to other Arabs, thus forming a significant barrier to women’s participation in the labor force. This also had an adverse indirect effect toward the completion of schooling, thus keeping mothers’ fertility relatively high and reducing education's potentially diminishing effect on poverty. A considerable mismatch between skills and employment was found among Arab academics, thus hinting at discrimination and segregation in their labor market. Considering the various mentioned transmission mechanisms it seems that government intervention in infrastructure may yield a high social return and help interrupt the vicious circle of poverty.
    Keywords: Bedouin, Ethnic groups, Israel, poverty, basic needs, relative poverty, food-energy-intake, infrastructure, fertility, education, school-dropout, employment.
    JEL: H54 I21 I32 J13 O12 O15 O18
    Date: 2009
    Abstract: In this paper, we argue that the inadequacy of their underlying formal model can explain the failure of the existing empirical studies to exhibit a robust and convergent estimation of the effect of FDI on growth. We build a structural model of growth with endogenous attraction to FDI, and we estimate it on panel data for a sample of Middle East and North Africa countries (MENA). Direct effects of FDI on growth are not significant, and we show that FDI is not only responsive to growth, but it is also likely to promote increases of GDP through indirect channels as it spurs the formation of human capital and exports.
    Keywords: FDI, growth, attraction, MENA, simultaneous equations
    JEL: F21 F43 O11 O15
    Date: 2009
  9. By: Naguib Shokralla, Rania
    Abstract: This paper aims at investigating the difference between the Egyptian and Argentinean approach to privatisation and FDI and how their different policies, institutions and regulations affected the progress of their respective privatisation programmes and FDI participation. The analysis indicates that, in Egypt, the legal framework of privatisation did not explicitly incorporate FDI participation. FDI regulations were developed separately from privatisation regulations. As a result, a foreign investor in Egypt is faced with multiple laws and multiple regulating agencies for FDI. Unlike in Argentina, the legal framework of privatisation explicitly incorporated the participation of FDI, and FDI regulations were totally liberalised. This explains why FDI participation in Argentine privatisation during 1989 – 2000 accounted for 63% of privatisation proceeds, while, in Egypt, FDI participation accounted for only 24% of privatisation proceeds during 1993 – 2000.
    Keywords: Privatisation; FDI; Egypt; Argentina; regulations
    Date: 2009
    Abstract: This article investigates the factors that motivated sovereign wealth funds (SWFs) in their massive investment operations in European or US company equity, especially banking institutions. Considered to be investors with considerable financial clout, albeit passive and long-term, SWFs have long been seen as a restoring force in financial markets able to soften the impact of the destabilizing speculative strategies practiced by certain institutional operators. Over 2007, their massive cash injections into the banking sectors of industrialised countries could even go as far as having us believe that these investors were acting as saviours of the system. The rise of SWFs could hence be seen, at that time, as a change in financial capitalism in which States would act both as investors and regulators. Nevertheless, a sharper analysis of strategies conducted by SWFs shows that some of them are opportunistic, comparable to the strategies implemented by private institutional investors.
    Keywords: Sovereign wealth funds, regulation, investment, financial markets
    JEL: F21 G28
    Date: 2009

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