nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2020‒09‒07
thirteen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Is Bank Loan Funding to SMEs in North Africa a Matter of Size? By Philippe Adair; Imène Berguiga
  2. The Effect of Hosting 3.4 Million Refugees on the Health System in Turkey and Infant, Child, and Elderly Mortality among Natives By Aysun Aygun; Murat Guray Kirdar; Berna Tuncay
  3. Female Labor Force Participation in Turkey: The Role of the Intergenerational Links By Mine Durman-Aslan
  4. United Arab Emirates; 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the United Arab Emirates By International Monetary Fund
  5. COVID 19: Socio-economic context of companies after containment: Which fiscal and social support measures? (Case of MOROCCO) By Dr Hind Bouzekraoui
  6. Inflation dynamics in Tunisia: a smooth transition autoregressive approach By Boukraine, Wissem
  8. What Are the Poverty and Inequality Impacts of Fiscal Policy in Turkey ? By Cuevas,Pablo Facundo; Lucchetti,Leonardo Ramiro; Nebiler,Metin
  9. Morocco; 2018 Request for an Arrangement Under the Precautionary and Liquidity Line-Press Release; Staff Report; and Statement by the Executive Director for Morocco By International Monetary Fund
  10. Transforming Finance in the Middle East and North Africa By Arezki,Rabah; Senbet,Lemma W.
  11. Romanian-Turkey Politico-Diplomatic Relations, 1971-1974 By Gabriela-Nicoleta Dragne
  12. Power System Implications of Subsidy Removal, Regional Electricity Trade, and Carbon Constraints in MENA Economies By Timilsina,Govinda R.; Deluque Curiel,Ilka Fabiana
  13. Internal control and banking risk management: the case of Moroccan banks By Afafe Hertouch; Mustapha Achibane

  1. By: Philippe Adair (University Paris-Est Créteil-UPEC; ERUDITE Research Team); Imène Berguiga (IHEC-University of Sousse; ERUDITE Research Team)
    Abstract: The paper tackles the bank loan issue according to the size of 3,896 businesses, a sample from the World Bank Enterprises Survey conducted as of 2013 in Egypt, Morocco and Tunisia. First, the sample is adjusted with respect to international standards. Second, businesses that did not apply vs. those that did apply for a loan are investigated as regards corporate finance theory. Third, a logistic model addresses the demand and the supply of 1,020 businesses that applied for a loan. Characteristics of businesses -Size, Age, Registration and Financial inclusion influence loan demand, whereas Financial inclusion and Collateral influence loan supply.
    Keywords: Bank loans; Corporate finance; Logistic regressions; North Africa; SMEs
    JEL: G21 G32
  2. By: Aysun Aygun (Istanbul Technical University, Department of Economics); Murat Guray Kirdar (Bogazici University, Department of Economics); Berna Tuncay (Koç University, Department of Economics)
    Abstract: As of the end of 2017, 3.4 million Syrian refugees lived in Turkey. These refugees left a country where the health system was completely broken. Several studies report that Syrian refugees faced numerous diseases during their exodus, brought certain infectious diseases to the hosting communities, and have a high incidence of health care utilization. Moreover, they have much higher fertility rates than natives (5.3 to 2.3). We examine the effect of Syrian refugees on the health infrastructure in Turkey and on natives’ mortality—with a focus on infant, child, and elderly mortality. Our OLS results yield suggestive evidence of a negative effect of the refugee shock on infant and child mortality. However, we find that this is a result of endogenous settlement patterns of refugees. Once we account for the endogeneity using a plausibly exogenous instrument, we find no evidence of an effect on native mortality for any age group. We also analyze the pressure that the refugees put on the health care services in Turkey, as well as the government’s response, to understand our findings on mortality outcomes.
    Keywords: refugees; health care infrastructure; native mortality; infant; child; elderly; instrumental variables.
    JEL: H51 I18 J13 J15 O15
    Date: 2020–09
  3. By: Mine Durman-Aslan (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, UP1 - Université Panthéon-Sorbonne)
    Abstract: This study investigates the impact of the transmission of gender role attitudes and/or preferences from parents to children on the labor force participation decision of married women in Turkey. Using parents-children data we estimate a reduced-form model in which a married woman's participation in adulthood depends on her mother's and mother-in-law's former labor force participation in her adolescence. Our estimation results show that married women grown up with working mothers are 10.8 - 17.8 percent more likely to participate in the labor force than married women with nonworking mothers and married women with working mothers-in-law are 9.3 - 17.3 percent more likely to be in the labor force than married women with nonworking mothers-in-law. In addition, the estimated effects of mother's and the mothers-in-law's former labor force participation in rural sample are larger than those in the urban sample. We also find that as the education level of married women increases, the effect of being raised by a working mother on female labor force participation decreases. Having a husband grown up with a working mother increases the probability that a married woman with less than a high school education participates in the labor force; however, it is not a significant determinant of the labor force participation decision of highly educated women. Our findings reveal that the intergenerational transmission of gender role attitudes and/or preferences influences the labor market behavior of married women in Turkey. More importantly, higher education reduces the effect of intergenerational transmission of gender role attitudes and/or preferences on female labor force participation.
    Keywords: Female labor force participation,Marriage,Intergenerational social norm,Turkey
    Date: 2020–05
  4. By: International Monetary Fund
    Abstract: This Article IV Consultation highlights that UAE has successfully weathered recent external shocks, because of its large financial buffers, diversified economy, and strong policy response. The economy is starting to recover from the 2015–16 slowdown caused by a decline in oil prices. Growth momentum is expected to strengthen in the next few years, helped by higher oil output, increased public investment, and stepped-up structural reforms. Gradual and growth-friendly fiscal consolidation should resume once the recovery gains momentum to ensure intergenerational equity. Key priorities have been highlighted to raise spending efficiency, continue diversifying revenues, firmly anchor fiscal policy, and improve policy coordination and management of fiscal risks. The report also discusses that realizing the government’s Vision 2021 requires strong effort to foster productivity growth and increase the private sector’s role in the economy.
    Keywords: External sector;Economic growth;Central banks;Monetary authorities;National accounts;UAE,Proj,CBU,intergenerational equity,medium-term
    Date: 2019–02–01
  5. By: Dr Hind Bouzekraoui (UAE - Université Abdelmalek Essaâdi, l'Ecole Nationale de Commerce et de Gestion Tanger)
    Abstract: More than a health pandemic, COVID-19 can now be described as a real economic crisis which will undoubtedly represent one of the most striking facts of the 21st century. Beyond the health and medical damage caused by this pandemic, the impact is no less for the world economy and the use of the word "Crisis" is no longer doubtful or questionable. Morocco, like many countries, proved his awareness about the magnitude of the effects of this crisis on the economic fabric, and was among the precursor countries to instore a panoply of support measures. These measures have concerned first of all the health side, but also and above all, tax side and social security on which our present article focuses more particularly. The preliminary objective of our article is first to expose the state of play of Moroccan companies among the particular situation of confinement, then to come back to the main fiscal and social measures put in place by the Moroccan authorities to counter the restrictive symptomatic effects of the COVID-19 crisis and avoid a cataclysmic state for the country's economy. Ultimately, to conclude, we present through our article, a critical analysis of the measures introduced by the competent authorities whose the boomerang effect is representing a real time bomb.
    Abstract: Plus qu'une pandémie sanitaire, le COVID-19 est désormais qualifiable d'une réelle crise économique qui représentera indéniablement l'un des faits les plus marquants du 21 ème siècle. Au-delà des dégâts sanitaires et médicaux qu'a engendré cette pandémie, l'impact n'en est pas moindre à l'égard de l'économie mondiale et l'usage du mot « Crise » n'est dorénavant plus chose contestable ou discutable. Conscient de l'ampleur des effets de cette crise sur le tissu économique, Le Maroc, à l'instar de plusieurs pays, était parmi les pays précurseurs à mettre en place une panoplie de dispositions d'accompagnement d'abord sanitaires mais aussi et surtout fiscales et sociales sur lesquelles se focalise plus particulièrement notre présent article. L'objectif préliminaire de notre article est d'exposer dans un premier temps l'état des lieux des entreprises marocaines à l'issue du confinement, de revenir ensuite sur les principales dispositions à caractère fiscal et social mises en place par les autorités marocaines pour contrer les effets astreignants symptomatiques de la crise COVID-19 et éviter un état cataclysmique pour l'économie du pays. En définitive, en guise de conclusion, nous présentons à travers notre article, une analyse critique des mesures et dispositions instaurées par les autorités compétentes dont l'effet boomerang y afférent représente une réelle bombe à retardement.
    Keywords: economic crisis,Moroccan companies,fiscal policy,social measures,banking facilities,COVID-19,mesures sociales,facilités bancaires Key words: Covid 19,politique fiscale,Covid-19,crise économique,entreprises marocaines
    Date: 2020–07–05
  6. By: Boukraine, Wissem
    Abstract: The fact that inflation is still on the rise, despite measures undertaken by the Tunisian central bank, prompts questions as to whether or not inflation dynamics has changed, exhibiting higher levels of persistence and volatility. This paper employs the smooth transition autoregressive model (STAR) to analyze Tunisian inflation dynamics on monthly data over the last three decades. We distinguish three periods based on monetary reforms. The non-linearity tests suggest that the ESTAR specification describes better the behavior of inflation. Our results suggest changes in persistence and important shifts in volatility, which confirm the effectiveness of the monetary reforms to a certain extent given the past political instability and the democratic transition in Tunisia.
    Keywords: Inflation, persistence, volatility, Smooth Transition Autoregressive, Tunisia
    JEL: C1 E31
    Date: 2020
  7. By: Aamer Abu-Qarn (BGU); Shirlee Lichtman-Sadot (BGU)
    Keywords: Public Transportation; Spatial Mismatch; Higher Education; Opportunity Cost
    JEL: I24 I25 J22 J61 O18
    Date: 2020
  8. By: Cuevas,Pablo Facundo; Lucchetti,Leonardo Ramiro; Nebiler,Metin
    Abstract: Fiscal policy is central to not only macroeconomic stability and growth, but also to poverty and inequality reduction. This paper provides the most comprehensive assessment of the distributional incidence of Turkey?s fiscal policy to date. It analyzes the combined and individual incidence of direct and indirect taxes, transfers, and social spending and benchmarks Turkey?s achievements against peer countries. The results show that fiscal policy significantly reduces income inequality in Turkey, driven by social spending on education and health, and complemented by direct taxes and transfer schemes that countervail the inequality-increasing impact of indirect taxes. At the bottom of the income distribution, targeted transfers are insufficient to compensate for the effect of taxes, resulting in net increases in poverty. In the context of upper-middle-income countries, Turkey?s performance is below the median. This is driven by the relatively larger negative impacts of indirect taxes and the more limited positive impacts of direct transfers and taxes. From a policy perspective, the paper contributes to identifying entry points for improving the equity impact of the fiscal package. Among these, targeting the minimum subsistence allowance (AGI) program toward the poor could be an efficient way forward. More broadly, the study represents a platform to simulate the distributional implications of a variety of fiscal changes to inform stakeholders and the policy debate.
    Date: 2020–06–24
  9. By: International Monetary Fund
    Abstract: Following the expiration of the third Precautionary and Liquidity Line (PLL) arrangement, in July 2018, the authorities have requested a new PLL arrangement. They did not draw on the last three arrangements and have made further progress in reducing domestic vulnerabilities in recent years, despite a sharp pick up in oil prices. In an external environment that remains subject to important downside risks, a successor arrangement will support the authorities’ policies to strengthen the economy’s resilience and promote higher and more inclusive growth.
    Keywords: Precautionary and Liquidity Line;Public sector;Governance;Inclusive growth;Monetary policy;Fund liquidity;Economic indicators;Press releases;Staff Reports;Civil service reform;Flexible exchange rates;Exchange rate regimes;Fiscal policy;Central banks;PLL,SOEs,medium term,GRA,WEO
    Date: 2019–01–24
  10. By: Arezki,Rabah; Senbet,Lemma W.
    Abstract: This paper argues for a transformation of finance to support the economic and social transformation of the Middle East and North Africa. The paper first documents the existing financial system in the region. The system is heavily skewed toward banking, relative to non-banking services, such as stock and corporate bond markets, with significant heterogeneity across countries. Second, the paper discusses the stance of macroeconomic policy in the region, which has had important implications for the destination, profitability, and quality of bank lending and the limited evolution of the financial system. Third, the paper explores the impact of technology on financial development, with particular attention to prospects for the development of fintechs. Entrenched incumbency of banks has limited the role of non-bank operators in fostering market contestability and fintech development. The paper is a call to the authorities and policy makers in the Middle East and North Africa to break with the status quo and business as usual. It underscores the need for a ?moonshot approach? focused on establishing the foundations of a new digital economy and its role in promoting a well-functioning and inclusive financial economy to support the development needs of the region.
    Date: 2020–06–24
  11. By: Gabriela-Nicoleta Dragne (Valahia University of Targoviste)
    Abstract: The stage of the relations between Romania and Turkey, at the political-diplomatic level, has seen an ascending development as a result of the high level visits, thus laying the foundations of the formation of friendship groups within the two parliaments, contact sand mutual visits at the level of the ministers, of municipalities. There was, however, a moment of stagnation, which was not a particular feature but a general feature that manifested itself both in Turkey's external relations and in domestic political life, with the formation of the Naim Talu government, a transition al government. It could engage in large-scale external relation sanctions. The Turkish press as well as the diplomatic environment expressed interest in learning about the concrete problems, addressing Romanian diplomats in Ankara, the Czechoslovak ambassador, the adviser of the U.S. Embassy, the ambassadors of Bulgaria and Greece and one of the advisers of the R.F. German embassy.
    Keywords: politician, diplomat, official visit, parliamentary group
    Date: 2020–04
  12. By: Timilsina,Govinda R.; Deluque Curiel,Ilka Fabiana
    Abstract: This study analyzes impacts on the power sector in the Middle East and North Africa region of three policies: removal of fuel subsidies, cross-border electricity trade, and reduction of carbon dioxide emissions in line with commitments under the Paris Agreement. The analysis uses a power system planning model that minimizes the total electricity supply cost over 2018?35 by satisfying specified technical, economic, environmental, and policy constraints. The study shows that the region would save between US$26.3 billion and US$27.5 billion, measured in 2018 prices, by removing subsidies of natural gas used for power generation. It would save US$83.6 billion to US$90.9 billion through cross-border electricity trade. The two policies together would yield a reduction of 10 percent in cumulative power sector carbon dioxide emissions in the region, with a net cost savings of US$111 billion. If a carbon constraining policy is considered to achieve the same level of reduction of emissions, the cost of the power system would increase by US$97 billion. The study also reveals that the benefits of subsidy removal would be higher in the presence of cross-border trade, and the benefits of cross-border trade would be higher in the absence of fuel subsidies.
    Keywords: International Trade and Trade Rules,Energy Policies&Economics,Energy and Environment,Energy Demand,Energy and Mining,Oil Refining&Gas Industry,Power&Energy Conversion
    Date: 2020–06–23
  13. By: Afafe Hertouch (UIT - Université Ibn Tofaïl); Mustapha Achibane (UIT - Université Ibn Tofaïl)
    Date: 2020

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