nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2015‒09‒11
fourteen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. United Arab Emirates: Selected Issues By International Monetary Fund. Middle East and Central Asia Dept.
  2. From value chain analysis to global value chain analysis: fresh orange export sector in mediterranean partner countries By Sausman, Christopher; Garcia, Marian; Fearne, Andrew; Felgate, Melanie; Ait el mekki, Akka; Cagatay, Selim; Soliman, Ibrahim; Thabet, Boubaker; Thabet, Chokri; Ben saïd, Mohamed; Laajimi, Abderraouf; Al ashkar, Haitham; El hadad-gauthier, Fatima; Mili, Samir; Martínez, Carolina
  3. Jordan: Seventh and Final Review Under the Stand-By Arrangement and Proposal for Post-Program Monitoring By International Monetary Fund. Middle East and Central Asia Dept.
  4. Morocco: Second Review Under the Arrangement Under the Precautionary and Liquidity Line-Staff Report; Press Release; and Statement by the Executive Director for Morocco By International Monetary Fund. Middle East and Central Asia Dept.
  5. Morocco: Ex Post Evaluation of Exceptional Access Under the 2012 Precautionary and Liquidity Line Arrangement By International Monetary Fund. Middle East and Central Asia Dept.
  6. Yemen National Social Protection Monitoring Survey (NSPMS): 2012-2013 – Final Report By IPC-IG; Unicef Yemen
  7. Morocco: The Sub-Saharan Expansion of Moroccan Banks: Challenges and Opportunities By International Monetary Fund. Middle East and Central Asia Dept.
  8. Diagnosis and Challenges of Sustainable Agricultural Development in Egypt By Soliman, Ibrahim
  9. Tunisia: Request for An Extension of the Stand-By Arrangement—Press Release; and Staff Report By International Monetary Fund. Middle East and Central Asia Dept.
  10. Iraq: 2015 Article IV Consultation and Request for Purchase Under the Rapid Financing Instrument - Press Release; Staff Report; and Statement by the Executive Director for Iraq By International Monetary Fund. Middle East and Central Asia Dept.
  11. Lebanon: Staff Report for the 2015 Article IV Consultation By International Monetary Fund. Middle East and Central Asia Dept.
  12. Iraq: Selected Issues By International Monetary Fund. Middle East and Central Asia Dept.
  13. Comparing the Employment-Output Elasticities of Expatriates and Nationals in the Gulf Cooperation Council By Alberto Behar

  1. By: International Monetary Fund. Middle East and Central Asia Dept.
    Abstract: United Arab Emirates: Selected Issues
    Keywords: Budgeting;Banking sector;Loan guarantees;Fiscal consolidation;Government expenditures;Fiscal policy;Oil revenues;United Arab Emirates;Selected Issues Papers;Revenues;environment, subsidies, prices, revenue, oil
    Date: 2015–08–04
  2. By: Sausman, Christopher; Garcia, Marian; Fearne, Andrew; Felgate, Melanie; Ait el mekki, Akka; Cagatay, Selim; Soliman, Ibrahim; Thabet, Boubaker; Thabet, Chokri; Ben saïd, Mohamed; Laajimi, Abderraouf; Al ashkar, Haitham; El hadad-gauthier, Fatima; Mili, Samir; Martínez, Carolina
    Abstract: Preceding chapters outlined some of the challenges facing Mediterranean Partner Countries (MPCs), from stubborn rural poverty to a crisis in its rapidly changing demographics. The region is facing a predicament over agricultural policy and competitiveness in its agri-food sector. MPCs and the wider region of the Middle East and North African (MENA) are failing to meet the challenge of averting heavy rural-urban migration and the current policy strategy has not brought the economic growth to the region that it desperately needs (Baldacci et al. 2008). Poor economic opportunities are pushing rural households into the city where instead of finding new prospects, poverty is merely concentrated in urban slums and unemployment continues to be a looming threat for the region (Nabli 2004). The population in MPCs that depend on agriculture coupled with a job crisis that must be con- fronted over the next decade suggests that the agri-food sector is, at least in the short term, the only realistic sector to bring economic improvements to rural areas in MENA. Yet growth in value-added agriculture in MENA is on par with sub- Saharan Africa and is significantly less than all other developing regions (Binswanger-Mkhize and McCalla 2010). Agricultural policies in the region con- tinue to link competitiveness, with volume being the overarching aim (Lindberg et al. 2006). All of this suggests that the region presents fertile ground to test a new value-orientated tool that goes beyond ‘conventional industry studies’ (Kaplinsky and Morris 2002). The present chapter contrasts with other chapters in this book. Rather than an analysis from the subject area of economics, a method that is more aligned with the business management discipline is presented. Using a methodology adapted from the work of Taylor (2005) and taken from the Supply Chain Management (SCM) literature, this chapter applies a Global Value Chain Analysis (GVCA) which identifies where value is created in the eyes of the end consumer and highlights bottlenecks based on the flow of materials, the flow of information and the strength of relationships between actors, from spot market and opportunistic to integrated and trusting relations. The contribution is primarily methodological in that it is an attempt to link process tracing and con- sumer-orientated demand pull concepts in the SCM literature (Collins 2009; Fearne 2009) with creating policy recommendations within the context of export competitiveness. The chapter begins with a literature review of value chain thinking concepts and a review of past methodological approaches in the SCM literature to value chain analysis, leading to our justification for contributing to the literature with a sectoral level of analysis and combining it with qualitative key informant information to create policy recommendations. Then an overview of the fresh orange sector in the region is described and justification for using MPCs as a context is offered. Based on the methodology we adapt from Taylor (2005) which provides a multi-faceted view of the global value chain, a set of insights are gathered about the nature of value creation and where constraints exist. Resulting policy recommendations provide examples of how a value-chain-centric approach could be used to highlight innovative policy solutions to MPCs’ agri-food export sector, for instance, dis- seminating consumer information to relevant stakeholders and incentivising investment in supply chain activities that add value for European consumers. A broad aim of our chapter is to generate a discussion over how value chain thinking can be used as a tool to inform policy debate.
    Keywords: Egypt, Development Economics, Value Chain Analysis, Global Value Chain Analysis, Orange Export, Orange Export Sector in Mediterranean
    JEL: Q13 Q17 Q56
    Date: 2015–06–20
  3. By: International Monetary Fund. Middle East and Central Asia Dept.
    Abstract: The conflicts in Syria and Iraq have led to a massive influx of refugees, putting enormous pressure on Jordan’s limited resources, and to disruptions in trade routes, less tourism, and a hesitant investment sentiment. At the same time, the near complete halt of gas flows from Egypt required imports of expensive fuel for electricity generation, contributing to large losses at the national electricity company and adding to the already high public debt. Jordan’s program has helped the economy weather these shocks. Gradual consolidation by the central government and public utilities, aided by lower oil prices, ensured that public debt is broadly stabilizing this year and, together with a prudent monetary policy, has preserved macroeconomic stability and supported confidence.
    Keywords: Staff Reports;Stand-by arrangement reviews;Public sector;Post-program monitoring;Press releases;Monetary policy;Fiscal reforms;Fiscal policy;Letters of Intent;Jordan;Economic indicators;Debt sustainability analysis;Balance of payments statistics;debt, inflation, public debt, market, monetary fund
    Date: 2015–08–05
  4. By: International Monetary Fund. Middle East and Central Asia Dept.
    Abstract: EXECUTIVE SUMMARY The economy is recovering and the outlook is favorable but still subject to significant risks. After slowing to below 2½ percent in 2014, growth is expected to be close to 5 percent in 2015, boosted by a strong agricultural output and a gradual acceleration of activity in other sectors. Fiscal policy is on track to achieve the annual deficit objective of 4.3 percent of GDP. The external position has improved rapidly, benefiting from lower oil prices and strong export performance. Inflation remains low. However, more remains to be done to reduce unemployment, especially among the youth. Assuming steadfast implementation of reforms, growth should gradually accelerate over the medium term. However, the outlook remains subject to the risks of a structurally weak growth in key advanced economies, tighter or more volatile global financial conditions, and increased volatility of energy prices. Important progress has been made on key reforms; sustaining these efforts will be important to foster higher and more inclusive growth. Significant progress was made in reforming the subsidy system, thereby reducing its costs and associated fiscal risks. At the same time, social programs on health and education were expanded. The adoption of the new organic budget law in May 2015 was a crucial step in improving the fiscal framework, while progress has also been made in upgrading the financial policy framework. Timely reform of the pension system is needed to ensure its viability while extending its coverage. Sustaining efforts to improve the business environment, competition, governance and transparency, as well as the functioning of the job market and the quality of education and vocational training, will also be important for increasing competitiveness, growth, and employment. The program remains on track and Morocco continues to meet the PLL qualification criteria. Both March 2015 quantitative indicative targets were met comfortably. Morocco continues to perform strongly in three out of the five PLL qualification areas, while not substantially underperforming in the fiscal and external areas. Staff recommends the completion of the second review under the arrangement.
    Keywords: Precautionary and Liquidity Line;Fiscal policy;Public debt;Budgetary reforms;Fiscal reforms;Monetary policy;Bank supervision;Economic indicators;Letters of Intent;Debt sustainability analysis;Staff Reports;Press releases;Morocco;
    Date: 2015–07–30
  5. By: International Monetary Fund. Middle East and Central Asia Dept.
    Abstract: The two-year Precautionary and Liquidity Line (PLL) arrangement with Morocco approved in August 2012 aimed to provide insurance and signal that the authorities’ policies were sound and that Morocco had adequate financial resources to draw upon, should external risks materialize. Sound macroeconomic policies strengthened Morocco’s economic policy buffers in the run-up to the 2008 global financial crisis, allowing it to weather the crisis relatively well. Macroeconomic vulnerabilities increased in the run-up to the PLL arrangement, stemming from weak growth in Morocco’s trading partners and from international oil prices. To address those vulnerabilities, the authorities envisaged a gradual reduction in fiscal and current account deficits. And in a context of domestic and regional tensions, the reform agenda also sought to support higher potential growth (including through a reallocation of fiscal spending to favor investment spending), strengthen the social safety net, and reduce unemployment. In that vein, the fiscal strategy appropriately balanced the trade-off of strengthening buffers and supporting growth. The authorities intended to treat the PLL arrangement as precautionary. The PLL arrangement was cancelled—without having been drawn upon—and the Executive Board approved a new 24-month PLL arrangement with lower access in July 2014.
    Keywords: Press releases;Fiscal policy;Morocco;Precautionary and Liquidity Line;Fiscal reforms;Monetary policy;Access policy;Ex post assessments;Exceptional use of Fund resources;Economic indicators;liquidity, monetary fund, debt, exchange rate, exchange
    Date: 2015–08–06
  6. By: IPC-IG (IPC-IG); Unicef Yemen (IPC-IG)
    Abstract: "In Yemen, one of the poorest countries in the Middle East and North Africa region, one half of the population lives below the poverty line. The Transitional Programme for Stabilization and Development, 2012-2014 and the Mutual Accountability Framework have identified the expansion of social protection mechanisms as a key priority for improving the living conditions of the poorest people in Yemen. Moreover, the National Dialogue Conference outcomes clearly state that every citizen has the right to social protection if unable to support his/her household. The National Social Protection Monitoring Survey (NSPMS) provides the data necessary for the Government to formulate comprehensive and adequate social protection mechanisms to meet the needs and guarantee the rights of Yemens poorest citizens, especially children, youth and women."(...)
    Keywords: Yemen, Social Protection, Monitoring Survey
    Date: 2014–12
  7. By: International Monetary Fund. Middle East and Central Asia Dept.
    Abstract: This Selected Issues paper presents an overview of the cross-border expansion of Moroccan banks in sub-Saharan Africa (SSA). It discusses policies to minimize possible negative spillovers and address the main supervisory challenges. It builds on the analysis and main results of a Pan-African Cross-Border Exercise—a joint initiative by the IMF’s African and Monetary and Capital Markets departments, with the collaboration of the Middle East and Central Asia department. It highlights that that Morocco could play an instrumental role by providing technical assistance to other supervisors in the region, and the SSA region may benefit from the Moroccan experience of good practices in many areas and relatively advanced supervisory capacity.
    Keywords: Bank supervision;Banking sector;Central bank role;Financial risk;Morocco;Risk management;Selected Issues Papers;Sub-Saharan Africa;banks, bank, banking, subsidiaries, risk
    Date: 2015–05–08
  8. By: Soliman, Ibrahim
    Abstract: Sustainable agricultural development seeks not only to preserve and maintain natural resources, but also to develop them, as future generations would have much more demand quantity-wise and quality-wise for agricultural and food products. Such goals should ensure a balance with the development of livelihoods enjoyed by the individuals concerned. Livelihood should not be restricted to an indicator of sufficient income levels but should also include public health concerns and education standards. The objective of this study was therefore to diagnose the challenges facing sustainable agricultural development in Egypt. The analysis examined six dimensions: trade trends with an emphasis on agricultural trade; rural poverty indicators and causes; degradation of agricultural resources (soil and irrigation water); agricultural labor employment in relation to migration and the technological packages adopted; public health criteria; and education indicators. The final section was allocated for a profile of the strategy towards rural development. The deficit in the trade balance showed an increase due to the deterioration of Egyptian exports in the world market, in particular the EU, due to the impacts of non-tariff barriers. Inequalities and rural poverty showed the extent of the unequal distribution of agricultural resources. They also demonstrated whether or not income generated from agriculture was capable of alleviating poverty in small-scale farming households and whether or not poverty in rural Egypt runs deeper than in urban areas. The appraisal of the degradation in natural resources focused on agricultural land and irrigation water. Whereas the agricultural land resources analysis concerned social and economic attitudes as well as the deterioration in soil fertility and quality, the analysis dealt with the types of quantitative and qualitative waste in irrigation water resources. Worrying demographic issues were examined via migration trends and unemployment indicators as well as through the labor force and employment by sector. Public health indicators showed that the imbalance between access to piped water and the sanitation network in rural regions was the worst of all Egyptian regions. While piped water reached 97 % of rural households, only one-third of them have access to the sanitation network and only 13 % of rural households in Upper Egypt had access to sanitation in 2008. The public health indicators recorded 30 beds and 13 doctors for every 10,000 citizens in major cities, there were fewer than 20 beds and 2 doctors per 10,000 citizens in rural towns. Surprisingly, there is a higher ratio of nurses to doctors in rural regions than in urban regions in Egypt. This implies a lack of doctors in rural regions and the preference of rural women to work as nurses in the vicinity of their home villages for social reasons, in particular the fact that other employment opportunities in rural areas for women are rare. Literacy rate estimates would appear to show that the lowest literacy rate is in rural Upper Egypt at about 57 % and that the highest rate is in urban Lower Egypt at around 79 %. The literacy gap between rural and urban areas in Egypt nevertheless fell from 45 % in 1995 to less than 21 % in 2010. The study was concluded with the definition of a profile for a strategy aimed at rural development in Egypt including a proposed program to alleviate poverty.
    Keywords: Egypt, Development Economics, Supply Chain Management, sustainable agricultural development
    JEL: O13 Q14 Q18
    Date: 2015–06–20
  9. By: International Monetary Fund. Middle East and Central Asia Dept.
    Abstract: This paper discusses Tunisia’s Request for an Extension of the Stand-By Arrangement. The sixth review, originally scheduled to take place before end-March 2015, was delayed. Although quantitative performance criteria for end-December 2014 and end-March 2015 are likely to have been met, the structural reform agenda did not advance as expected, mainly reflecting the authorities’ focus on the formation of a coalition government and the approval of internal regulations for the newly elected parliament. The adoption of long-awaited legislation necessary to promote more inclusive growth and reduce vulnerabilities remains outstanding in many areas. The IMF staff supports the authorities’ request for an extension of the arrangement until December 31, 2015.
    Keywords: Tunisia;review, reform, monetary fund, law, central bank
    Date: 2015–06–01
  10. By: International Monetary Fund. Middle East and Central Asia Dept.
    Abstract: Iraq is facing a double shock arising from the ISIS insurgency and the sharp drop in global oil prices. The conflict is hurting the non-oil economy through destruction of infrastructure and assets, disruptions in trade, and deterioration of investor confidence. The impact of the oil price decline—already felt in 2014—will fully unfold in 2015, affecting the budget, the external sector, and medium-term growth potential. The authorities are responding to the crisis through mix of fiscal adjustment and financing, maintaining their commitment to the exchange rate peg. Rapid Financing Instrument: To help address the present and urgent balance of payment and budget needs triggered by the ISIS insurgency and the collapse in oil prices, the authorities have requested financial assistance under the Rapid Financing Instrument (RFI) for 50 percent of quota (SDR 594.2 million).<BR>Outlook and Risks: Assuming a resolution of the conflict in the coming years, the baseline medium-term outlook still looks positive, even though it would be significantly less favorable than at the time of the 2013 Article IV report. Under much improved security conditions, the macroeconomic scenario would continue to be driven by the expansion in oil production and non-oil sector growth, assuming the implementation of structural reform to diversify the economy and support private sector development. But risks remain very high, arising primarily from a worsening of the conflict, political tensions, and poor policy implementation.
    Keywords: Article IV consultation reports;External shocks;Oil prices;Fiscal risk;Financial risk;Fiscal reforms;Banking sector;Economic indicators;Balance of payments statistics;Letters of Intent;Rapid Financing Instrument;Staff Reports;Press releases;Iraq;
    Date: 2015–08–18
  11. By: International Monetary Fund. Middle East and Central Asia Dept.
    Abstract: The Syrian crisis and the associated inflow of refugees continue to dominate Lebanon’s short-term outlook, compounding long-standing policy weaknesses and vulnerabilities. Political paralysis has set in, with virtually no progress on the structural front. Growth has remained modest and insufficient to make a dent in rising poverty and unemployment. A welcome improvement in the primary fiscal position in 2014 was largely due to temporary factors, and will not be sustained absent adjustment efforts—implying that, without additional effort, Lebanon’s already-sizable public debt burden will only worsen. Financial conditions have nonetheless remained stable, as deposit inflows continue to fund the economy and sizeable buffers support the credibility of the exchange rate peg.
    Keywords: Lebanon;debt, public debt, oil prices, monetary fund, inflation
    Date: 2015–07–17
  12. By: International Monetary Fund. Middle East and Central Asia Dept.
    Abstract: Iraq: Selected Issues
    Keywords: Subsidies;Electric power;Agricultural subsidies;Oil sector;External shocks;Oil prices;Oil production;Selected Issues Papers;Iraq;
    Date: 2015–08–18
  13. By: Alberto Behar
    Abstract: We estimate the elasticity of private-sector employment to non-oil GDP in the Gulf Cooperation Council (GCC) for GCC nationals and expatriates using a Seemingly Unrelated Error Correction (SUREC) model. Our results indicate that the employment response is lower for nationals, who have an estimated short-run elasticity of only 0.15 and a long-run response of 0.7 or less. The elasticity is almost unity for expatriates in the long run and 0.35 in the short run. We interpret low elasticities as indirect evidence of labor market adjustment costs, which could include hiring and firing rigidities, skills mismatches, and reluctance to accept private sector jobs. Forecasts suggest that, absent measures to reduce adjustment costs, the private sector will only be able to absorb a small portion of nationals entering the labor force.
    Keywords: Employment;Cooperation Council for the Arab States of the Gulf;Foreign labor;Labor force;Labor market characteristics;Econometric models;Error analysis;Employment Elasticities, Labor Market Adjustment Costs, GCC, Gulf Cooperation Council, Inclusive Growth
    Date: 2015–08–18
  14. By: Jihène Ghorbel (FSEG - Faculté des sciences de Sfax)
    Abstract: Despite growing research on the accounting information system in SMEs, the results found are mixed and contradictory. Thus, we try through this work to contribute to the debate on the design of the accounting information system in the SMIs in developing countries such as Tunisia. In an accounting perspective and in front of challenges which confront these companies and to legitimize their competitiveness and credibility, we focus on a series of structural and behavioral factors that may better understand the design of the accounting information system. Using the methods of structural equation modeling, this research reveals that the design of the accounting information system with 221 PMI is influenced by several contextual factors.
    Abstract: Malgré les recherches qui sont de plus en plus nombreuses sur le système d'information comptable dans les PME, les résultats trouvés sont mitigés et contradictoires. Ainsi, nous essayons à travers ce travail de contribuer au débat relatif du design du système d'information comptable dans les PMI des pays en voie de développement comme la Tunisie. Dans une optique comptable et face aux défis auxquels se trouvent confrontées les entreprises et pour légitimer leur compétitivité et leur crédibilité, nous nous intéressons à une série de facteurs structurels et comportementaux susceptibles de mieux cerner le design du système d'information comptable. En recourant aux méthodes des équations structurelles, cette recherche révèle que le design du système d'information comptable auprès de 221 PMI est influencé par plusieurs facteurs contextuels.
    Date: 2015–05–19

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