nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2014‒01‒17
nine papers chosen by
Paul Makdissi
University of Ottawa

  1. Iran and the Arab Spring: Between Expectations and Disillusion By Henner Fürtig
  2. The Possible Effects of Trans-Pacific Partnership on Turkish Economy By Oduncu, Arif; Mavuş, Merve; Güneş, Didem
  3. Credit Constraints, Political Instability, and Capital Accumulation By Risto Herrala; Rima Turk Ariss
  4. Macro-Financial Linkages in Egypt: A Panel Analysis of Economic Shocks and Loan Portfolio Quality By Inessa Love; Rima Turk Ariss
  5. Oil Prices, Drought Periods and Growth Forecasts in Morocco By Bentour, El Mostafa
  6. Employment Status, Income Equality, and Poverty in Egypt By Abd El Hamid Ali, Hoda
  7. Demographic and social trends affecting intergenerational relations in the MENA region By Messkoub, M.
  8. What is unpaid female labour worth? Evidence from the Time Use Studies of Iran in 2008 and 2009 By Ghazi Tabatabaei, S.M.; Mehri , N.; Messkoub, M.
  9. Marriage Crisis and Housing Costs: Empirical Evidence from Provinces of Iran By Mohammad Reza Farzanegan; Hassan Gholipour Fereidouni

  1. By: Henner Fürtig (GIGA German Institute of Global and Area Studies)
    Abstract: The 1979 Iranian Revolution undoubtedly belongs to the "great" revolutions of modern times – all of which were characterized by universalistic efforts and the claim to have set new social, political and cultural norms with global validity. In this sense, the Iranian revolutionaries felt the obligation to actively reintroduce Islam as a revelation for the whole world, not only for Muslims. Yet, they soon became aware that most Muslims viewed their export strategy as either an attempt to enforce Shiism, or – even worse – to conceal mere national megalomania. Therefore, the current leadership argues that the revo¬lution should no longer be exported actively, but that Iran should serve as an example. Consequently, Supreme Leader Khamenei called the events of the Arab Spring a "natural enlargement of Iran's Islamic revolution of 1979" and credited his country for being the catalyst of this "Islamic awakening." The present article will analyze selected regional reactions to the Islamic awakening concept, which did not altogether meet Iranian expectations.
    Keywords: Arab Spring, Iran, political Islam, Middle East, regional system
    Date: 2013–11
  2. By: Oduncu, Arif; Mavuş, Merve; Güneş, Didem
    Abstract: Due to the World Trade Organization’s (WTO) deadlocked multilateral trade negotiations, many countries have started to establish Free Trade Agreements (FTA). In this context, twelve countries including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States (US) and Vietnam have decided to establish Trans-Pacific Partnership (TPP). This study focuses on the impacts of this partnership on Turkish economy. By using Global Trade Analysis Project (GTAP) database and a general equilibrium model, the effects of various scenarios on GDP and exports are studied. Obtained results show that Turkey could be in a loss up to 1% of GDP if present 12 countries establish the TPP. Otherwise, potential countries’ inclusions in TPP could cause higher losses – up to 2.4% of GDP- for Turkey.
    Keywords: Free Trade Agreements, Trans-Pacific Partnership, Turkey.
    JEL: F13 F14 F15
    Date: 2014–01
  3. By: Risto Herrala; Rima Turk Ariss
    Abstract: We investigate the complex interactions between credit constraints, political instability, and capital accumulation using a novel approach based on Kiyotaki and Moore’s (1997) theoretical framework. Drawing on a unique firm-level data set from Middle-East and North Africa (MENA), empirical findings point to a large and significant effect of credit conditions on capital accumulation and suggest that continued political unrest worsens credit constraints. The results support the view that financial development measured by a relaxing of financial constraints is key to macroeconomic development.
    Keywords: Credit ceilings;Middle East;North Africa;Transition economies;Capital accumulation;Capital accumulation; credit constraints; political unrest; MENA countries
    Date: 2013–12–16
  4. By: Inessa Love; Rima Turk Ariss
    Abstract: This paper investigates macro-financial linkages in Egypt using two complementary methods, assessing the interaction between different macroeconomic aggregates and loan portfolio quality in a multivariate framework as well as through a panel vector autoregressive method that controls for bank-level characteristics. Using a panel of banks over 1993-2010, the authors find that a positive shock to capital inflows and growth in gross domestic product improves banks’ loan portfolio quality, and that the effect is fairly similar in magnitude using the multivariate and panel vector autoregressive frameworks. In contrast, higher lending rates may lead to adverse selection problems and hence to a drop in portfolio quality. The paper also reports that a larger market share of foreign banks in the industry improves loan quality.
    Keywords: Banking sector;Egypt;Loans;External shocks;Credit risk;Economic models;Macroeconomic Shocks; Banks; Loan Quality; Panel Vector Autoregression
    Date: 2013–12–30
  5. By: Bentour, El Mostafa
    Abstract: The Moroccan economy suffers deeply from two exogenous shocks: high oil prices and drought periods. The irregular rainfall and instability of oil prices increase the volatility of economic growth and the uncertainty around growth forecasts. We exploit the vulnerability to these shocks in order to forecast the economic growth in Morocco. We use for this an Error Correction model linking output and trade balance in a vector augmented by oil prices and cereal production as exogenous variables over the period 1962-2012. The results are in the range and comparable to those of other national institutions and IMF. For example, based on the hypotheses of 97.7 $ per barrel and a moderate cereal production of 70 million quintals, growth is forecasted to be around 3%, in 2014, with a lower and upper bound of 2.5% and 3.4% respectively. The IMF and the High Commission for Planning forecast respectively 3.8% and 2.5%.
    Keywords: Trade Balance, GDP Volatility, Cereal Production, VECM-X model
    JEL: C53 E27
    Date: 2013–12–01
  6. By: Abd El Hamid Ali, Hoda
    Abstract: The present study examines trends in employment status in Egypt in an important era of democratic transition. It examines determinants of different labor force participation by gender. The empirical analysis is based on the World Values Survey of the fifth wave (2005-2008). A comparative descriptive approach is used to analyze the difference between males' and females' employment status. The study uses logistic regression analysis to examine the determinants of different labor force participation, and to examine the impact of different labor force practices and income equality on poverty. Empirical findings support a gender gap with respect to accessibility to full time paid work, only young females, regardless their computer skills, education attainment, marital status are more likely to be engaged in full time work, while those in middle age are more properly engaged in unpaid employment. The study also finds a gender gap in job search intensity. We also conclude that there is no linkage between employment status and poverty, however we find a positive and significant impact of females 'perception regarding the importance of having more equal distribution of income and their perception regarding the importance of poverty problem. These results show that women in Egypt are less engaged in decent jobs because they are less educated, having lower skills, more affected by income inequality and poverty. Social security should be reformed to cover all women, reforms are also needed for pensions, and unemployment insurance, to cover all retired, old age, care –giving, and unemployed individuals
    Keywords: Employment Status, Paid- Unpaid work, Formal and Informal work, Decent Work, Gender, Income Equality, Poverty, Egypt.
    JEL: J0 J01 O1 O17
    Date: 2013
  7. By: Messkoub, M.
    Abstract: This paper focuses on poverty in the MENA region and whether it can be alleviated by intergenerational support within and across households. Intergenerational relations are mediated through several institutions. The most prominent of these are households, state, civil society and market. Combinations of social arrangements, economic resources and cultural traditions govern these institutions. Whether or not family and households can provide the necessary supports for their poorer or disadvantaged members would crucially depend on household composition, its economic resources and its interaction with the institutions of state, civil society and market. This paper explores the trends in family formation and composition over time and household interaction with the above mentioned institutions through the labour market, or through various state and NGO driven welfare programmes. The above trends as well as migration impact the intergenerational support within families. This paper will argue for improved social support and regional integration in order to complement family resources as well as tackle some of the emerging issues in relation to population ageing and care economy in the region.
    Keywords: MENA, demographic transition, household composition, intergenerational support, care economy, gender and care, social policy
    Date: 2013–12–10
  8. By: Ghazi Tabatabaei, S.M.; Mehri , N.; Messkoub, M.
    Abstract: This paper uses the Time Use Survey of Iran of 2008 and 2009 to estimate the monetary value of unpaid domestic work of urban housewives. The surveys recorded domestic work activities such as cooking and cleaning and general care of household members as well as care of children and their education. Using the market-based approach to estimate the monetary value of unpaid domestic work we collected data on the cost of buying in services for domestic work and for education of children from ‘nursing agencies’ and private education colleges in main cities of Iran in the summer of 2011 that were adjusted to obtain the 2008 and 2009 prices. The market value of domestic work of urban housewives was estimated to be US$25 billion in 2008 and US$29 billion in 2009. These were about 8.6 per cent of non-oil GDP in the same years. Our estimates complement other findings from around the world that confirm substantial contribution of housewives to the economy. These contributions have gone unrecorded and not compensated in most countries. At a minimum, housewives can be insured against basic contingencies of life such has health problems, poverty and disabilities and supported in old age. Our work and other studies do provide the economic and social arguments for costing and putting into practice the long overdue support for housewives; they have earned it!
    Keywords: Iran, care economy, domestic unpaid work, economic evaluation, feminism and gender studies, generations and regeneration, production and reproduction, social insurance, time-use
    Date: 2013–08–29
  9. By: Mohammad Reza Farzanegan (University of Marburg); Hassan Gholipour Fereidouni (Universiti Teknologi Malaysia)
    Abstract: The term “marriage crisis” is becoming more visible in Iranian public and private debates and constitutes a major issue in political discussions at the time of elections. The increasing working age and young population in Iran have difficult times to establish family. This has increased the political concerns of addressing the basic needs of young Iranians. This study examines the link between housing costs and marriage rate in Iran controlling for other relevant economic determinants of marriage. Using a panel of provinces of Iran over a period of nine years (2003-2011) and applying generalized method of moments (GMM) estimator, our results reveal that there is a negative relationship between housing costs and marriage rate. We also find that government special loan for marriage, and lower level of unemployment rate increase marriage rate. Finally, increasing spending on higher education has a dampening effect on marriage rate.
    Keywords: marriage, housing, real estate, Iran, GMM
    Date: 2014

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