nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2014‒04‒18
fourteen papers chosen by
Paul Makdissi
University of Ottawa

  1. Trajectories and outcomes of the 'Arab Spring' : comparing Tunisia, Egypt, Libya and Syria By Darwisheh, Housam
  2. Pathways to the middle class in Turkey : how have reducing poverty and boosting shared prosperity helped ? By Azevedo, Joao Pedro; Atamanov, Aziz
  3. Female Labour Force Participation in MENA’s Manufacturing Sector: The Implications of Firm-related and National Factors By Ali Fakih; Pascal L. Ghazalian
  4. Economic growth, combustible renewables and waste consumption and emissions in North Africa By Ben Jebli, Mehdi; Ben Youssef, Slim
  5. The determinants of regional stock market integration in Middle East: A Conditional ICAPM Approach By Khaled Guesmi; Frédéric Teulon
  6. Persistence of Performance Using the Four-Factor Pricing Model: Evidence from Dow Jones Islamic Index By Abdelbari El Khamlichi; Mohamed Arouri; Frédéric Teulon
  7. Who hires foreign domestic workers? Evidence from Lebanon By Ali Fakih; Walid Marrouch
  8. Credit in the Structure of the Market Quotation of Financial Assets in Relation to the Islamic Financial Laws By Magomet Yandiev; Renat Bekkin
  9. The oil position in the Tunisian economy: Adaptation of computable general equilibrium model By Necibi, Thameur
  10. Iranian-Oil-Free Zone and International Oil Prices By Mohammad Reza Farzanegan; Mozhgan Raeisian Parvari
  11. The Economic Legacy of Mahmoud Ahmadinejad By Nader Habibi
  12. Ekonomik Faaliyet icin Bilesik Oncu Gostergeler Endeksi’nde (MBONCU-SUE) Yontemsel Degisim By Aslihan Atabek Demirhan
  13. Turkiye’de Ihracatin Gelir ve Fiyat Esnekliklerine Bir Bakis : Bolgesel Farkliliklarin Onemi By Olcay Yucel Culha; M. Koray Kalafatcilar
  14. Sistemin Fonlama Ihtiyaci Bilesenleri ve Turk Lirasi Kredi Iliskisi By M. Haluk Guler; Gursu Keles; Erkan Kilimci

  1. By: Darwisheh, Housam
    Abstract: Almost three years have passed since the 'Arab Spring' began in late 2010. In the major sites of popular uprisings, political conditions remain unsettled or violent. Despite similarities in their original opposition to authoritarian rule, the outcomes differed from country to country. In Tunisia and Egypt, processes of transiting from authoritarian rule produced contrasting consequences for democratic politics. Uprisings led to armed rebellion in Libya and Syria, but whereas Gaddafi was overthrown, Asad was not. What explains the different trajectories and outcomes of the Arab Spring? How were these shaped by the power structure and levels of social control of the pre-uprising regimes and their state institutions, on the one hand, and by the character of the societies and oppositional forces that rose against them? Comparing Tunisia with Egypt, and Libya with Syria, this paper discusses various factors that account for variations in the trajectories and outcomes of the Arab Spring, namely, the legacy of the previous regime, institutional and constitutional choices during "transition" from authoritarian rule, socioeconomic conditions, and the presence of absence of ethnic, sectarian and geographic diversity.
    Keywords: Middle East & Norht Africa, Tunisia, Egypt, Libya, Syria, Revolutions, Internal politics, Democratization, People's movement, Institutions, Transition, Islamists
    JEL: N15 N17 P16
    Date: 2014–03
  2. By: Azevedo, Joao Pedro; Atamanov, Aziz
    Abstract: Turkey's poverty reduction performance in the 2000s has been remarkably consistent. Extreme and moderate poverty have fallen considerably since 2003. Between 2002 and 2011, extreme poverty fell from 13 percent to 5 percent, while moderate poverty halved from 44 percent to 22 percent (respectively, defined using the World Bank's Europe and Central Asia regional poverty lines of 2.5 and 5 USD/PPP). Most of this poverty reduction (89 percent) has been driven by growth, a performance consistent with most countries in Europe and Central Asia. This is substantially different form the recent performance of other regions, such as Latin America, where redistribution contributed to poverty reduction almost four times more than in Turkey. Turkey has also achieved sustained consumption growth of the bottom 40 percent of the population, even during the years of the world recession. Turkey's performance in poverty reduction and increased shared prosperity has been complemented by the systematic expansion of the middle class by 20 percentage points. This paper analyzes the main drivers of poverty reduction, shared prosperity, and changes in inequality in Turkey from 2002 to 2011. The analysis shows that labor markets, demographics, pensions, and social assistance have played a critical role in this process. It further explores some of the mechanisms that have facilitated these changes.
    Keywords: Rural Poverty Reduction,Regional Economic Development,Inequality,Achieving Shared Growth
    Date: 2014–04–01
  3. By: Ali Fakih; Pascal L. Ghazalian
    Abstract: This paper examines the implications of firm-related and national factors for Female Labour Force Participation (FLFP) rates in manufacturing firms located in the Middle East and North Africa (MENA) region. The empirical investigation uses data derived from the World Bank’s Enterprise Surveys database and applies fractional logit models to carry out the estimations. The results reveal positive implications of many firm-related factors, mainly private foreign ownership and exporting activities, for FLFP rates. National factors, such as economic development and gender equality, are also found to promote FLFP rates. These effects are generally found to be more important for women’s overall labour participation rates than for women’s non-production labour participation rates.
    Keywords: Female labour force participation, fractional logit model, manufacturing firms, MENA region,
    JEL: J16 J21 J23 J82
    Date: 2013–12–01
  4. By: Ben Jebli, Mehdi; Ben Youssef, Slim
    Abstract: This paper examines the causal relationship between economic growth, combustible renewables and waste consumption, and CO2 emissions for a balanced panel of five North Africa countries during the period 1971-2008. The panel cointegration test results indicate that, in the short-run, there is evidence of unidirectional causality running from CO2 emissions to real GDP, unidirectional causality from combustible renewables and waste consumption to real GDP without feedback, and unidirectional causality from combustible renewables and waste to CO2 emissions. However, there is evidence of no short-run causality between combustible renewables and waste consumption and CO2 emissions. In the long-run, we find that there is evidence of a unidirectional causality running from CO2 emissions and combustible renewables and waste consumption real GDP. The results from panel FMOLS and DOLS estimates show that CO2 emissions is the most significant variable in explaining economic growth in the region which is followed by the consumption of combustible renewables and waste. In the long-run, increases in combustible renewables and waste consumption and emissions lead to increase economic growth. The finding of this paper is that North Africa region can use renewable energy as a substitutable energy to the fossil one and avoid the disaster on atmosphere and stimulate economic growth in the long-run.
    Keywords: Combustible renewables and waste consumption; panel cointegration; North Africa.
    JEL: C33 Q43
    Date: 2014–04–13
  5. By: Khaled Guesmi; Frédéric Teulon
    Abstract: Over recent years, several emerging market regions have actively taken part in globalisation movements and world market integration. However, the financial integration processes appear to vary over time, and differ considerably from one region to another. This paper investigates intraregional integration in the Middle East region during the period 1996-2008 using an international conditional Capital Asset Pricing Model (ICAPM) version that allows for dynamic changes in the degree of regional market integration, global risk premium, currency risk premium and local market risk premium. Our findings show that inflation, exchange rate volatility, variations in interest rate spread and global market dividend yields are key intra-regional integration variables in the Middle East context. Moreover, despite the complex economic and political situation that characterises the Middle East, our results indicate that stock markets in this area are well integrated in the regional market.
    Keywords: Multivariate GARCH, Intra-regional integration, CAPM (Capital Asset Pricing Model)
    JEL: F36 C32 G15
    Date: 2014–04–10
  6. By: Abdelbari El Khamlichi; Mohamed Arouri; Frédéric Teulon
    Abstract: Despite the increasing attention to ethical investments, the empirical studies on Islamic indices are scarce. The main goal of this article is to investigate whether Dow Jones Islamic index 100 titans (DJI100) delivers persistent performance. Using the Carhart (1997) four-factor model, we consider all historical data available from the launching of the index by Dow Jones on September 1999 to March 2011. We study all the firms included in the index and we construct the risk factors (Market premium, size, Book-to-Market, momentum). Our findings show positive performance for momentum strategy and support the idea that ethical investments could under-perform and thus investors accept to pay for their ethics.
    Keywords: persistence, Islamic indices, performance, four-factor model
    Date: 2014–04–10
  7. By: Ali Fakih; Walid Marrouch
    Abstract: Foreign domestic workers’ activities provide important market and non-market services in a large number of middle-income countries as these activities have an impact on the labor force participation and time allocation decisions of household members. This paper provides new evidence on the determinants of foreign domestic workers’ employment using a socio-economic dataset from Lebanon. Controlling for household, household head, dwelling and regional characteristics, contrary to popular beliefs we find that the size of the household and the presence of elderly persons are not important determinants of the hiring decision of foreign domestic workers, while the probability of hiring a domestic worker is significantly higher for households with children and disabled persons. Interestingly, we find that the number of rooms in the residence rather than its total surface area or type to be the only relevant dwelling characteristic. The paper offers insights about the demand for foreign domestic workers that may be useful to policy makers in developing nations.
    Keywords: Foreign domestic workers; Demand for domestic work; Household level data,
    JEL: D13 J23 J49
    Date: 2013–09–01
  8. By: Magomet Yandiev (Department of Economics, Lomonosov Moscow State University); Renat Bekkin (Mardjani Foundation, Moscow State Institute of International Relations (University))
    Abstract: The authors analyze the structure of the market quotation of financial assets and come to the conclusion that one of its components is a financial asset identical with a commercial credit. Hence, in terms of the Islamic financial system any financial asset is inappropriate for investment because its quotation contains elements of danism. The authors demonstrate a new approach to the structure of the Islamic infrastructure of exchange trading by financial assets, which would allow excluding elements unacceptable from the point of view of Sharia.
    Keywords: Islamic finance, Islamic banking, riba, gharar, maisir
    JEL: G12 G14 F29 F30 E44
    Date: 2013–12
  9. By: Necibi, Thameur
    Abstract: This article presents several preliminary results of the real prices application on the Tunisian economy through a dynamic computable general equilibrium model. The objective is to assess the effects of the progressive dismantling policies of oil products subsidy on the economic growth, the sectoral dynamics and, to a lesser extent, on the household incomes. The simulations on the crude oil price and on the subsidies granted to oil products have redrew new structures of the prices and have modified their levels. The analysis of the impacts of this simulation studies the effects of these new prices data on the economic agents and on the economy in general.
    Keywords: Computable General Equilibrium Models, Taxation, Subsidies, Revenue, Energy, Government Policy;
    JEL: C67 C68 H30 Q43
    Date: 2014–04–10
  10. By: Mohammad Reza Farzanegan (University of Marburg); Mozhgan Raeisian Parvari (University of Vienna)
    Abstract: One of the main elements of economic sanctions against Iran due to its nuclear and military programs is crude oil exportation restrictions in addition to investment in Iranian energy related projects. Senders of such sanction are interested in understanding the impacts of such embargos on international oil prices. We apply unrestricted Vector Autoregressive (VAR) model, using impulse response (IRF) and variance decomposition (VDA) tools with annual data from 1965 to 2012 to analyze the dynamic response of international oil prices to Iranian oil export sanction. Controlling for the supply of non-Iranian oil and the world GDP per capita, we show that international oil prices respond positively to negative changes of the Iranian oil expor, our proxy of Iran oil sanctions. However, the increasing response of oil prices to the Iranian oil sanction is only significant in the first year after negative shock in Iran oil exports. Beyond the first year following shock, we do not observe a statistically significant response of oil prices.
    Keywords: Oil Price, VAR Model, Sanction, Iran Handle: RePEc:mar:MAGKSE:201427
    JEL: E37 Q32 Q34 Q38 Q43
    Date: 2014
  11. By: Nader Habibi (International Business School, Brandeis University)
    Abstract: Mahmoud Ahmadinejad won the 2005 presidential election promising economic justice and fairness. Throughout his eight-year presidency, he paid more attention to economic fairness and redistribution of wealth than had previous presidents, and he adopted several populist financial and fiscal policies intended to fulfill his promise. These policies did reduce income inequality, but they also resulted in a loss of fiscal and monetary discipline. Yet, Ahmadinejad, a self-assured politician, often dismissed the warnings of both his critics and his supporters about the consequences of his economic policies. Ahmadinejad brought many commanders of the Revolutionary Guards and Basij militia into his cabinet and facilitated the sale of a large number of privatized firms to these institutions and their economic units. As a result, the Revolutionary Guards are now actively involved in all types of economic and financial activities in Iran. Initially, Ahmadinejad was skeptical of the market-oriented economic reforms of previous presidents, but he gradually changed his mind and continued many of them. His most important achievement in this regard was the reform of energy and fuel subsidies. With the active support of the Supreme Leader and the Revolutionary Guards, Ahmadinejad implemented the price subsidies reform in December 2010. Despite record high oil revenues, however, Iran’s economic growth during Ahmadinejad’s presidency was no better than in the Khatami or Rafsanjani eras.
    Date: 2014–04
  12. By: Aslihan Atabek Demirhan
    Abstract: [TR] Bu calismanin amaci, Turkiye Cumhuriyet Merkez Bankasi (TCMB) ile Ekonomik Kalkinma ve Isbirligi Orgutu (OECD) ortak calismasi sonucunda olusturulan ve 2002 tarihinden bu yana aylik olarak yayinlanan bilesik oncu gostergeler endeksi (MBONCU-SUE) yonteminde yapilan degisiklikler hakkinda bilgi vermektir. OECD devresel analizler ve oncu gostergeler sistemi cerçevesinde uyguladigi yontemde bazi degisiklikler yapilmistir. Bu degisikliklere uyumlu olacak sekilde, mevcut oncu gostergeler kullanilarak yeni yontem ile MBONCU-SUE hesaplanmistir. Elde edilen yeni MBONCU-SUE’nin beklenildigi uzere daha duzgun bir patika izledigi ve bu nedenle de karar alicilar acisindan daha tutarli ve etkin bilgi sagladigi gorulmustur. [EN] The aim of this study is to inform about recent methodological changes that occurred in the construction of composite leading indicator for Turkish economy activity (MBONCU-SUE). Since 2002, on a monthly basis, MBONCU-SUE has been published as a result of cooperation between Central Bank of the Republic of Turkey (CBRT) and Organisation of Economic Developments (OECD). OECD’s cyclical analysis and leading indicators system has been gone under several technical changes. Parallel to those changes, with the current leading indicators, MBÖNCÜ-SÜE is constructed via new methodology. The obtained new MBÖNCÜ-SUE displays smoother pattern as expected which provides more robust and efficient information to the policy makers.
    Date: 2014
  13. By: Olcay Yucel Culha; M. Koray Kalafatcilar
    Abstract: [TR] Bu notta Turkiye’de mal ihracatini belirleyen temel unsurlarin, ihracat pazarlari arasinda ne olcude farklilastigi arastirilmistir. Bu amacla, 2003-2013 donemini kapsayan VAR analizi kullanilarak ihracat talep fonksiyonundaki esneklik katsayilari hesaplanmistir. Ihracatin gelir esnekligi gelismis ulkelerde, ozellikle de Euro Bolgesi’nde, belirgin olarak daha yuksek bulunmustur. Doviz kuru esnekligi ise Orta Dogu ve Afrika bolgesinde hem mutlak deger olarak daha yuksek bulunmus, hem de diger bolgelerin aksine istatistiki olarak anlamli oldugu saptanmistir. Bu bulgular, ihracatin belirleyici faktorleri arasinda, gerçeklestirilen mal ihracatinin kompozisyonundaki farkli yapiya paralel olarak, bolgesel farkliliklar oldugunu teyit etmektedir. [EN] In this note we have investigated to what extent the determinants of Turkish exports differentiate across export destinations. To this end, elasticity coefficients of export demand function are estimated by employing the VAR method for the 2003-2013 period. The estimated values for demand elasticity of exports are considerably higher in advanced countries, particularly in the Eurozone. We have found that the real exchange rate elasticity of exports in the Middle East and Africa region is not only higher in absolute terms but also statistically significant, contrary to other regions. These findings confirm that there are regional variations in the determinants of exports across destinations in accordance with the difference in the composition of export goods.
    Date: 2014
  14. By: M. Haluk Guler; Gursu Keles; Erkan Kilimci
    Abstract: [TR] Bu notla, bankacilik sistemi Turk Lirasi (TL) fonlama ihtiyaci ana kalemlerindeki gelismelerin, TL tuketici ve ticari kredi degisimlerine ne sekilde etki ettigi degerlendirilmektedir. Bulgular, sistemin fonlama ihtiyacinda TL zorunlu karsilik tutari disinda gerceklesen artislarin TL tuketici kredilerini azaltirken TL ticari kredileri degistirmeyerek kredi kompozisyonunu etkileyebilecegine isaret etmektedir. [EN] In this note, we analyze how changes in the essential components of the banking system’s liquidity need affect Turkish Lira denominated consumer and commercial loans. Our findings indicate that an increase in the banking system’s liquidity need, in excess of reserve requirements, may affect the composition of the total loans by leading to a decrease in consumer loans while keeping commercial loans intact.
    Date: 2014

This nep-ara issue is ©2014 by Paul Makdissi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.