nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2020‒01‒27
seventeen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Demographics in MENA countries: a major driver for economic growth By Yeganeh Forouheshfar; Najat El Mekkaoui; Hippolyte d'Albis
  2. Politically-Connected Firms and the Military-Clientelist Complex in North Africa By Kubinec, Robert
  3. When Groups Fall Apart: Measuring Transnational Polarization with Twitter from the Arab Uprisings By Kubinec, Robert; Owen, John
  4. Labor Migrants as Political Leverage: Migration Interdependence and Coercion in the Mediterranean By Tsourapas, Gerasimos
  5. Turkey; 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Turkey By International Monetary Fund
  6. Connecting Disadvantaged Communities to Work and Higher Education Opportunities: Evidence from Public Transportation Penetration to Arab Towns in Israel By Abu-Qarn, Aamer; Lichtman-Sadot, Shirlee
  7. Managing Diversity in Business Education: A Case of Dubai International Academic City By Nadir Ali Kolachi
  8. The Financial Development-Environmental Degradation Nexus in the United Arab Emirates: The Importance of Growth, Globalization and Structural Breaks By Shahbaz, Muhammad; Haouas, Ilham; Sohag, Kazi; Ozturk, Ilhan
  9. Turkey; Selected Issues By International Monetary Fund
  11. Still in the Danger Zone By Nitzan, Jonathan; Bichler, Shimshon
  12. A Roadmap for Investment Promotion and Export Diversification: The Case for Jordan By Ricardo Hausmann; Patricio Goldstein; Ana Grisanti; Tim O'Brien; Jorge Tapia; Miguel Angel Santos
  13. Estimating Saudi Arabia’s Regional GDP Using Satellite Nighttime Light Images. By Hector Lopez-Ruiz; Jorge Blazquez; Fakhri Hasanov
  14. Gasoline Demand in Saudi Arabia: Are the Price and Income Elasticities Constant? By Jeyhun Mikayilov; Fred Joutz; Fakhri Hasanov
  15. Bolgeler Itibariyla Ihracat Agirlikli Buyume Endeksleri By Okan Eren; Devrim Yavuz
  16. Bankacilik Sektoru Rezerv Tesis Egiliminin Belirleyicileri By Sule Senel Tabak; Halil Guler; Ismail Anil Talasli
  17. Turk Firmalari Arasinda Ihracat Rekabeti By Huzeyfe Torun; Yusuf Kenan Bagir

  1. By: Yeganeh Forouheshfar (Université Paris-Dauphine, IRD - Institut de Recherche pour le Développement, PSL - PSL Research University, LEDa - Laboratoire d'Economie de Dauphine - CNRS - Centre National de la Recherche Scientifique - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine, DIAL - Développement, institutions et analyses de long terme); Najat El Mekkaoui (Université Paris-Dauphine, IRD - Institut de Recherche pour le Développement, PSL - PSL Research University, LEDa - Laboratoire d'Economie de Dauphine - CNRS - Centre National de la Recherche Scientifique - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine, DIAL - Développement, institutions et analyses de long terme); Hippolyte d'Albis (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: MENA region is undergoing rapid demographic transition, where 50% of the population is under the age 25 and high youth unemployment rates are argued to be one of the main sources of political instability. Fighting youth ex- clusion from work is one of the main challenges in the region. In this paper we evaluate the economic impact of the demographic transition for selected coun- tries which experience di_erent speeds of transition, namely: Iran, Morocco and Egypt. The impact of demographic shift on the evolution of human capital stock and physical capital stock, has been highlighted by the literature. Since _nan- cial markets play a crucial role to allocate capital and channel the funds to the productive sector, it is hence fundamental to take into account the role of the _nancial markets in the growth process associated with demographic change. We have developed a general equilibrium overlapping generations model with a cost for capital mobilisation as a proxy for _nancial markets' e_ciency. We have found that the demographic shift will be an important driver for growth in the upcoming decades. Furthermore, our results show that a more e_cient _nancial sector leads to better economic performance. Speci_cally, youth are the primary bene_ciaries: an increase in the _nancial sector e_ciency can reduce up to 8 percentage points of the youngest age group unemployment.
    Keywords: Financial efficiency,Development,MENA region,Demographic transition
    Date: 2019–12
  2. By: Kubinec, Robert (Princeton University)
    Abstract: Although much of the theory of authoritarian regimes assumes that the distribution of patronage is a core plank of rulers' coalitions, it is also true that rulers can survive despite impoverishing influential elites. I argue that what can explain authoritarian stability without patronage are patterns of political action evolving from coordination games. I make this claim based on an original online survey of 2,496 firm managers and employees in Algeria, Egypt and Tunisia in which I randomized the type of offers made by political parties to companies for support in a hypothetical election. I show that Egyptian business, which has suffered the most under the authoritarian regime, counter-intuitively appears to be the most supportive of the country's rulers. The underlying mechanism that explains these findings appears to be the convergence of business owners' beliefs on the military as a coordination point rather than a distributor of goodies.
    Date: 2018–09–07
  3. By: Kubinec, Robert (Princeton University); Owen, John
    Abstract: It is generally impossible to observe counterfactuals in which ideological polarization occurs both with and without international influence. To address this thorny problem, we employ a new statistical method, item response theory-vector auto-regression (IRT-VAR), that permits us to identify separately the transnational and domestic dynamics of polarization after the Arab Uprisings of 2011. We collected a dataset of Twitter accounts in Egypt and Tunisia during the critical year of 2013 when the Egyptian military staged a coup against the Islamist president Muhammad Morsi. We find that the coup increased retweets among ideological allies by as high as 50 percent each day following the coup and decreased cross-ideological retweets by as high as 25 percent. However, we also show that the transnational influence of external Islamist groups on Egyptian's Islamists served to dampen domestic polarization relative to the level that polarization might have reached if international social connections had not existed.
    Date: 2018–08–01
  4. By: Tsourapas, Gerasimos (University of Birmingham)
    Abstract: How do states attempt to use their position as destinations for labor migration to influence sending states, and under what conditions do they succeed? I argue that economically driven cross-border mobility generates reciprocal political economy effects on sending and host states. That is, it produces migration interdependence. Host states may leverage their position against a sending state by either deploying strategies of restriction—curbing remittances, strengthening immigration controls, or both—or displacement—forcefully expelling citizens of the sending state. These strategies’ success depends on whether the sending state is vulnerable to the political economy costs incurred by host states’ strategy, namely if it is unable to absorb them domestically and cannot procure the support of alternative host states. I also contend that displacement strategies involve higher costs than restriction efforts and are therefore more likely to succeed. I demonstrate my claims through a least-likely, two-case study design of Libyan and Jordanian coercive migration diplomacy against Egypt in the aftermath of the Arab Spring. I examine how two weaker Arab states leveraged their position against Egypt, a stronger state but one vulnerable to migration interdependence, through the restriction and displacement of Egyptian migrants.
    Date: 2018–04–25
  5. By: International Monetary Fund
    Abstract: Following the sharp lira depreciation and associated recession in late-2018, growth has improved, helped by policy stimulus and favorable market conditions. The lira recovered and the current account has seen a remarkable adjustment. Turkey remains susceptible to external and domestic risks, however, and prospects for strong and sustainable growth over the medium term look challenging without reforms to address vulnerabilities, strengthen policy credibility, and boost productivity.
    Date: 2019–12–26
  6. By: Abu-Qarn, Aamer (Ben Gurion University); Lichtman-Sadot, Shirlee (Ben Gurion University)
    Abstract: Disadvantaged communities are often geographically segregated from employment and higher education opportunities. Increasing access can entail substantial welfare gains, but this can also affect the tradeoff faced by young adults between investing in higher education and working for pay. We evaluate the introduction of bus services to Arab towns in Israel, which substantially and differentially increased access either to work only or to work and higher education opportunities among a disadvantaged population. Exploiting the variation that different bus line connections created in the opportunity cost of schooling, we find that young adult responses are consistent with a tradeoff between investing in higher education and working for pay. For females, under certain circumstances, there is a simultaneous decrease in both labor market and educational attainment outcomes. We argue that this is due to a combination of a household income effect and social stigma that is associated with female labor force participation. Our results demonstrate the importance of accounting for potential reductions in educational attainment when expanding work opportunities to disadvantaged communities and that traditional barriers can play a large role in female integration into the labor market.
    Keywords: public transportation, spatial mismatch, higher education, opportunity cost
    JEL: I24 I25 J22 J61 O18
    Date: 2019–12
  7. By: Nadir Ali Kolachi (University of Fujairah, UAE)
    Abstract: Education is an important factor in developing any nation around the world. Today’s developed countries are much focused on education in varied fields. This has become possible through meaningful diversity in every field. Latest developments and innovations are the backbone to compete in today’s competitive world. Best business education in Europe and North American countries have opened avenues of competition for other nations. These initiatives of being accredited by AACSB is a clear direction for successful business schools. UAE has been a preferred destination for more than two hundred nationalities who are working in different fields. Such diversity is the reason of varied developments in almost every domain. The educational projects, research based initiatives, business forums and meetings made it possible to get exponential growth in UAE and Dubai in particular. Dubai is one of the most demanded place to live and work in different companies and universities. Referring to this case research, education is the most focused area and set as top priority of government’s projects for 2020. There are few AACSB accredited Business Schools in UAE and others are trying best to get it done through varied skills as possible through diversified opportunities in Dubai. Dubai is leading in education sector in the region where all nationalities are working and being educated in multiple fields. Dubai’s diversity has made it much attractive to be educated in the multicultural city.
    Keywords: diversity, business education, business schools, different cultures and international standards
    Date: 2019–11
  8. By: Shahbaz, Muhammad; Haouas, Ilham; Sohag, Kazi; Ozturk, Ilhan
    Abstract: This article revisits the nexus between financial development and environmental degradation by incorporating economic growth, electricity consumption and economic globalization in the CO2 emissions function for the period 1975QI-2014QIV in the United Arab Emirates. We apply structural break and cointegration tests to examine unit root and cointegration between the variables. Further, the article also uses the Toda-Yamamoto causality test to investigate the causal relationship between the variables and tests the linkages of the robustness of causality by following the innovative accounting approach. Our empirical analysis shows cointegration between the series. Financial development increases CO2 emissions. Economic growth is positively linked with environmental degradation. Electricity consumption improves environmental quality. Economic globalization affects CO2 emissions negatively. The relationship between financial development and CO2 emissions is U-shaped and inverted N-shaped. Further, financial development leads to environmental degradation and environmental degradation in turn leads to financial development in the Granger sense.
    Keywords: Financial development, environment, growth, electricity, globalization
    JEL: Q5
    Date: 2020–01–01
  9. By: International Monetary Fund
    Abstract: Selected Issues
    Date: 2019–12–26
  10. By: Journal, IJEMSS; Ramadhan, Presya
    Abstract: This paper examines the role of Middle East Investment Initiative (MEII) in development in the West Bank, Palestine in the U.S.-Palestine Partnership (UPP) framework. Answering the question of how the role of the Middle East Investment Initiative (MEII) in development in Palestine in the US-Palestine Partnership (UPP) framework and how the contribution of Public-Private Partnership (PPP) to development in Palestine, the author's thesis statement is that amid diplomatic and territorial disputes, The Middle East Investment Initiative (MEII) as a public-private partnership becomes the main channel for collecting and channeling development assistance such as resources and private sector investment that can benefit the West Bank and bring prosperity to people Palestinians. While the private sector such as the Middle East Investment Initiative (MEII) cannot do much to address diplomacy or security issues, the private sector can play an equally important role through the contribution of resources and investment to conflict areas such as Palestine to help economic development In the West Bank, Palestine.
    Date: 2018–06–07
  11. By: Nitzan, Jonathan; Bichler, Shimshon
    Abstract: In December 2017, we posted a RWERB entry, titled ‘Profit warning: there will be blood’. We warned that, although the Weapondollar-Petrodollar Coalition might no longer be in the Middle East driver’s seat, the oil and armament companies, the region’s oil-exporting autocracies and various non-state groups were all keen on seeing their oil incomes rise from record lows. And we ob-served that, in this context, ‘the prospects of a new energy conflict, whether premeditated or co-incidental, seem extremely high’. [. . .] We can only hope that the current round of Middle East hostilities won’t be proportional to the size of its current danger zone.
    Keywords: differential accumulation,Middle East Energy Conflicts
    JEL: P16 D74 Q4
    Date: 2020
  12. By: Ricardo Hausmann (Center for International Development at Harvard University); Patricio Goldstein (Center for International Development at Harvard University); Ana Grisanti (Center for International Development at Harvard University); Tim O'Brien (Center for International Development at Harvard University); Jorge Tapia (Center for International Development at Harvard University); Miguel Angel Santos (Center for International Development at Harvard University)
    Abstract: Jordan faces a number of pressing economic challenges: low growth, high unemployment, rising debt levels, and continued vulnerability to regional shocks. After a decade of fast economic growth, the economy decelerated with the Global Financial Crisis of 2008-09. From then onwards, various external shocks have thrown its economy out of balance and prolonged the slowdown for over a decade now. Conflicts in neighboring countries have led to reduced demand from key export markets and cut off important trade routes. Foreign direct investment, which averaged 12.7% of gross domestic product (GDP) between 2003-2009, fell to 5.1% of GDP over the 2010-2017. Regional conflicts have interrupted the supply of gas from Egypt – forcing Jordan to import oil at a time of record prices, had a negative impact on tourism, and also provoked a massive influx of migrants and refugees. Failure to cope with 50.4% population growth between led to nine consecutive years (2008-2017) of negative growth rates in GDP per capita, resulting in a cumulative loss of 14.0% over the past decade (2009-2018). Debt to GDP ratios, which were at 55% by the end of 2009, have skyrocketed to 94%. Over the previous five years Jordan has undertaken a significant process of fiscal consolidation. The resulting reduction in fiscal impulse is among the largest registered in the aftermath of the Financial Crises, third only to Greece and Jamaica, and above Portugal and Spain. Higher taxes, lower subsidies, and sharp reductions in public investment have in turn furthered the recession. Within a context of lower aggregate demand, more consolidation is needed to bring debt-to-GDP ratios back to normal. The only way to break that vicious cycle and restart inclusive growth is by leveraging on foreign markets, developing new exports and attracting investments aimed at increasing competitiveness and strengthening the external sector. The theory of economic complexity provides a solid base to identify opportunities with high potential for export diversification. It allows to identify the existing set of knowhow, skills and capacities as signaled by the products and services that Jordan is able to make, and to define existing and latent areas of comparative advantage that can be developed by redeploying them. Service sectors have been growing in importance within the Jordanian economy and will surely play an important role in export diversification. In order to account for that, we have developed an adjusted framework that allows to identify the most attractive export sectors including services. Based on that adjusted framework, this report identifies export themes with a high potential to drive growth in Jordan while supporting increasing wage levels and delivering positive spillovers to the non-tradable economy. The general goal is to provide a roadmap with key elements of a strategy for Jordan to return to a high economic growth path that is consistent with its emerging comparative advantages.
    Keywords: Economic Complexity
    Date: 2019–12
  13. By: Hector Lopez-Ruiz; Jorge Blazquez; Fakhri Hasanov (King Abdullah Petroleum Studies and Research Center)
    Abstract: The increasing availability of data from technologies such as mobile phones, satellites and connected devices means that there are many new possible sources of economic data. This study analyzes the potential use of nighttime light images from satellites to provide a regional distribution of Saudi Arabia’s gross domestic product (GDP).
    Keywords: Cointegration, Economic activity, GDP, Nighttime Satellite data, Production Function
    Date: 2019–12–23
  14. By: Jeyhun Mikayilov; Fred Joutz; Fakhri Hasanov (King Abdullah Petroleum Studies and Research Center)
    Abstract: After the drop in international oil prices in 2014, oil-exporting countries started to launch new policies to develop their economies. It is important that policymakers involved in energy and economic development understand how economic agents respond to increased energy prices and how the latter affects the demand for different fuels.
    Keywords: Gasoline Demand, Gasoline Prices, Time-varying elasticities
    Date: 2019–12–26
  15. By: Okan Eren; Devrim Yavuz
    Abstract: [TR] Bu calismada Turkiye'nin ihracat yaptigi 110 ulkenin reel buyume oranlari ve ihracat paylari kullanilarak kuresel ve bolgesel olcekte buyume endeksleri hesaplanmaktadir. Buyume endekslerinin bu sekilde hesaplanmasi dis talebin gerek kuresel gerekse bolgesel duzeyde olculmesine ve analiz edilmesine olanak saglamaktadir. Ayrica ihracat agirlikli kuresel buyumeye bolgesel katkilarin hesaplanmasiyla gecmis yillarda dis talepte gozlenen degisimlerin kaynaklari incelenebilir hale gelmektedir. Bulgular, ihracat agirlikli buyumenin bolgeler arasinda onemli farkliliklar gosterdigine ve Turkiye'nin kuresel dis talep buyumesinin daha cok Avrupa Birligi ile Ortadogu ve Afrika ulkeleri tarafindan belirlendigine isaret etmektedir.[EN] This study utilizes real GDP growth rates and export weights of 110 trade partners of Turkey to calculate headline and regional indices. Calculation of growth indices in this way makes it possible to measure and analyze foreign demand at both global and regional scale. Besides, sources of past shocks to foreign demand can also be analyzed with the calculation of regional contributions to the export-weighted global growth rate. The findings show that export-weighted growth rates display notable differences across regions, and global foreign demand growth for Turkey is mainly shaped by the European Union and Middle Eastern and African countries.
    Date: 2020
  16. By: Sule Senel Tabak; Halil Guler; Ismail Anil Talasli
    Abstract: [TR] Bankalarin zorunlu karsiliklarini iceren cari hesaplar kalemi, Turkiye Cumhuriyet Merkez Bankasi likidite yonetimi acisindan bilancoyu dengeleyen artik deger olarak nitelendirilmekte ve para politikasi operasyonlarinin tumu, nihai olarak bu kalemi etkilemektedir. Bankalarin, uygulanan para politikasina bagli olarak, rezerv tesis egilimlerinde donem donem degisiklik yapabildikleri gozlenmektedir. Bu kapsamda notta bankacilik sektorunun rezerv tesis egilimini etkileyen temel faktorler incelenmektedir. Sonuclar, bankacilik sektoru rezerv tesis egiliminin temel belirleyicilerinin; likidite kosullarina (acik veya fazla) bagli olarak sistemin fonlama ihtiyaci seviyesi, serbest mevduat bakiyesinin sistemin fonlama ihtiyacina orani ve serbest mevduat bakiyesinin gecelik fonlama miktarina orani ile merkez bankasi fonlama kompozisyonu oldugudur. Notta yer alan bulgularin, bankacilik sektoru rezerv tesis egiliminin ongorulebilirligini arttirarak likidite yonetimine ve nihai olarak para politikasinin etkinligine katki saglayacagi degerlendirilmektedir.
    Date: 2020
  17. By: Huzeyfe Torun; Yusuf Kenan Bagir
    Abstract: [TR] Bu calismada, Turk firmalari arasindaki ihracat rekabeti, 2006-2016 donemine ait firma, urun ve ulke seviyesindeki mikro veriler kullanilarak analiz edilmektedir. Ihracatin duragan seyrettigi 2011-2016 arasi donemde ihracatci firma sayisi artarken firma basina ihracat azalmistir. Bu donemde firma basina ihracatin ve pazar basina ihracatin ozellikle Avrupa disindaki ulkelerde azaldigi, buna karsin bu ulkelerde urun-ulke grubu olarak tanimlanan pazar sayisinin belirgin bir sekilde yukseldigi saptanmistir. Bu bulgularla uyumlu olarak, urun ve ulke kiriliminda hesaplanan rekabetcilik endeksleri Turk firmalari arasi rekabet artisinin Avrupa pazarinda sinirli, Avrupa disi pazarlarda ise yuksek oldugunu gostermektedir. Ulke bazinda yapilan regresyon analizleri de Turk firmalari arasi rekabetin dusuk gelir grubu ulkelerde yaygin oldugunu teyit etmekte ve bunun da pazara girebilmenin gorece kolay olmasindan kaynaklandigini gostermektedir. [EN] This study examines the export competition among Turkish firms using firm-product level export data for the period 2006-2016. The number of exporters increased while exports per firm decreased during the period of 2011-2016, in which the total export was stagnant. According to the market concentration indices (HHI) calculated at product and country breakdown, the increase in competition among Turkish firms is limited in the European market but higher in non-European markets. Regression analyses conducted at country-product level confirm that the competition among Turkish firms increased in low-income countries and this is due to the relatively easy access to the market.
    Date: 2020

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