nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2021‒02‒01
thirteen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Analyzing Effective Factors of Capital Outflow from the Middle East and North African Countries (MENA) By Heydari, Hassan; Jariani, Farzaneh
  2. Praetorian spearhead: the role of the military in the evolution of Egypt’s state capitalism 3.0 By Sayigh, Yezid
  3. Education and Consanguineous Marriage By Ş. Pelin Akyol; Naci H. Mocan
  4. Long-run stability of money demand and monetary policy: the case of Algeria By Raouf Boucekkine; Mohammed Laksaci; Mohamed Touati-Tliba
  5. Different is beautiful? Effects of asymmetry on international joint-ventures performance By Dikmen, L.; Cheriet, F.
  6. Jordan; Second Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for a Waiver of Nonobservance of Performance Criterion, an Extension of the Arrangement, and Rephasing of Access-Press Release; Staff Report; and Statement by the Executive Director for Jordan By International Monetary Fund
  7. Water-Energy-Food Nexus in the Middle East and North African Countries (MENA) By Zolfaghari, Mehdi; Jariani, Farzaneh
  8. Jordan; Technical Assistance Report-Monetary and Financial Statistics Mission By International Monetary Fund
  9. Environmental Fiscal Reform in Morocco By Grzegorz Peszko; Simon Black; Alexandrina Platonova-Oquab; Dirk Heine; Govinda Timilsina
  10. Food Security in the Middle East and North Africa (MENA) By Zolfaghari, Mehdi; Jariani, Farzaneh
  11. How Do Changing U.S. Interest Rates Affect Banks in the Gulf Cooperation Council (GCC) Countries? By Olumuyiwa S Adedeji; Yacoub Alatrash; Divya Kirti
  12. West Bank and Gaza Environment Priorities Note By World Bank
  13. عرضه، تقاضا، و پیشنهاد قیمت در بازار برق ایران By Ghaninejad, Mousa

  1. By: Heydari, Hassan; Jariani, Farzaneh
    Abstract: Our objective in this study is to analyze effective factors of capital outflow from the Middle East and North African countries. Despite a high rate of unemployment, budget deficits, low per capita income, foreign debts and high inequality, the MENA countries are now facing with capital outflow problem and therefore to work out a solution for this problem we should recognize the factors which affect it. In this research, we have postulated the variables showing economic conditions including Gross Domestic Product (GDP) Growth, Inflation and Foreign Exchange Rate Fluctuations, institutions quality variables including economic freedom index, governance and ruling index (The Right to Comment and Responsibility, Political Stability, Government Efficiency and Effectiveness, Rules and Regulations Quality), oil rents, political risks, (Arab Spring and the Global Financial Crisis) as important factors affecting capital outflow from the Middle East and North African countries. The model has been estimated using the GMM method from 2000 to 2018. The results show that improvement of an economic condition such as an increase in economic growth and an increase in the transparency of the governments can be known as good options for reducing the capital outflow from MENA countries.
    Keywords: Capital Flight, Capital Outflow, MENA countries, Middle East Countries, GMM
    JEL: F3 O16 O53 O55
    Date: 2020–12–06
  2. By: Sayigh, Yezid
    Abstract: Military involvement in the Egyptian economy is giving rise to a new version of state capitalism. Driven by Arab socialism in the 1960s and reshaped by privatisation in the 1990s, under President Abdel-Fattah el-Sisi the state has sought to bend the private sector to its capital investment strategy while continuing to profess commitment to free market economics. His administration seeks private sector investment, but exclusively on its own terms. This is demonstrated through the expansion and diversion of military economic activity in five sectors: real estate development, creation of industrial and transport hubs, rentier or extractive activities related to natural resources, relations with the private sector, and the effort to increase the state’s financial efficiency while seeking private investment to help capitalise the public sector. This approach may generate macro-level economic growth and improve the efficiency of public finances, but it also reinforces the grip of the state rather than consolidating free markets. Reflecting this, private sector investment in the economy is lower today than it was in the socialist phase of the 1960s.
    JEL: J1
    Date: 2021–01–01
  3. By: Ş. Pelin Akyol; Naci H. Mocan
    Abstract: At least one of every five marriages is consanguineous (between couples who are second cousins or closer) in the Middle East and North Africa, and the rate is higher than 50 percent in some parts of the world. Consanguineous marriage generates serious health problems for the offspring and constitutes an economic problem with its associated medical costs and the impact on human capital. The prevalence of consanguineous marriage can shape various dimensions of the society ranging from institutional structure to attitudes such as trust, individualism, and nepotism. Using data from Turkey and leveraging an education reform which increased mandatory schooling by three years, we find that the reform made women less likely to find consanguineous marriage as an acceptable practice, and that the reform reduced women’s propensity to marry a first cousin or a blood relative. Exposure to the reform altered women’s preferences in favor of personal autonomy. Women who are exposed to the reform are more likely to have met their husbands outside of family networks, they are less likely to get forced into marriage against their consent, and they are less likely to agree that only a son can ensure the continuation of the family blood line. These results indicate that educational attainment can alter behaviors and attitudes which may be rooted in culture.
    JEL: I15 I18 I20 J10 Z1
    Date: 2020–12
  4. By: Raouf Boucekkine (Aix-Marseille Univ, CNRS, AMSE, Marseille, France.); Mohammed Laksaci (Ecole Supérieure de Banque, Alger, Algeria); Mohamed Touati-Tliba (Ecole Supérieure de Commerce d’Alger, Algeria)
    Abstract: We estimate the demand for money for monetary aggregates M1 and M2, and cash in Algeria over the period 1979-2019, and study its long-run stability. We show that the transaction motive is significant for all three aggregates, especially for the demand for cash, reflecting the weight of informal economy “practices”. The elasticity of the scale variable is very close to unity for M2 and M1, and even equal to unity for cash demand (1.006). The elasticity of inflation is also significant for all three aggregates, although its level is higher in the case of cash demand (-6.474). Despite the persistence of certain financial repression mechanisms, interest rate elasticity is significant for all three aggregates, but higher for M1 and cash. The same observation is made for elasticity of the exchange rate, reflecting the effect of monetary substitution, especially for M1 and cash. Finally, our study concludes that the demand for money in terms of M1 remains stable, the same observation being confirmed for the M2 aggregate. However, the demand for fiat currency proves not to be stable. The consequences for the optimal design of monetary policy in Algeria are clearly stated.
    Keywords: monetary policy, money demand, long-run stability, resource-rich countries, Algeria, co-integration
    JEL: E41 E42 E52 C13
    Date: 2021–01
  5. By: Dikmen, L.; Cheriet, F.
    Abstract: This article aims to highlight the multidimensional character of asymmetry through four determinants: differential of partners’ size, number of foreign partners, ownership structure and cultural distance; it also analyses the effects of asymmetry on IJV performance. Based on a quantitative study of 123 International Joint Ventures in Turkey, results show that Joint venture performance is not significantly linked to size, number of foreign partners and ownership structure. Only cultural distance has a positive and significant effect on Joint Venture performance. ....French Abstract: Ce travail a pour objectif de rendre compte de la multidimensionnalité de l’asymétrie entre les partenaires à travers l’examen de 4 déterminants: les différences de taille, le nombre de partenaires étrangers, la structure du capital, et la distance culturelle. En second lieu, l’analyse a concerné les effets de ces déterminants de l’asymétrie sur la performance des coentreprises internationales. Le travail empirique est basé sur l’analyse de 123 joint ventures internationales en Turquie. Les résultats montrent que la performance n’est pas affectée par le déséquilibre de la structure capitalistique, le différentiel de taille ou le nombre de partenaires. Il y a seulement un effet positif de la distance culturelle, suggérant une conception constructive des alliances internationales.
    Date: 2021
  6. By: International Monetary Fund
    Abstract: This paper discusses Jordan’s Second Review under the Extended Arrangement under the Extended Fund Facility, Requests for a Waiver of Nonobservance of Performance Criterion, an extension of the arrangement, and rephasing of access. Discussions highlight that the Jordanian authorities have preserved macroeconomic stability, maintain a prudent monetary policy, and ensured a sound financial system. Jordan faces a challenging environment—including low economic growth, high unemployment, and elevated public debt—underscoring the importance of swiftly implementing policies and reforms to bring public debt on a downward path, boost investment and productivity, and enhance inclusive growth. The enactment of long needed growth-enhancing reforms is encouraging, including the secured transactions law, the bankruptcy law, and the business-inspections law. The international community has strongly supported the new government’s commitment to maintain the reform momentum, strengthen growth, and reduce public debt. The London Initiative in February 2019 has helped unlock essential budget grants and concessional financing to support the authorities’ reform program.
    Keywords: Public debt;Income and capital gains taxes;Income tax systems;Arrears;Debt rescheduling;ISCR,CR,executive board assessment,electricity company NEPCO,NEPCO,reform effort,reform
    Date: 2019–05–15
  7. By: Zolfaghari, Mehdi; Jariani, Farzaneh
    Abstract: The water, energy and food nexus approach was studied and assessed in this research in a period namely between 2009-2018 in the Middle East and North Africa countries and accordingly the results show that the nexus between water, food and energy have not been established in the Middle East and North Africa Region (MENA) as the general perspective of sustainable development and providing the residents of the foregoing region with the food and generally speaking, the important variables do not give any logical and meaningful effect to the behavioural equations of water, energy and food in this region. Therefore, the population growth especially the urbanization one, the economic prosperity and the requirements thereof may cause a pressure increase on the water, energy, food, land and other natural resources and eventually such increase will bug and disrupt the food supply for the MENA region in the years to come and it can also lead to the aggravation and intensification of conflicts, tensions and wars and bellicosity. The most significant solution for establishing the balance and equilibrium among the population growth, urbanization growth and food supply and also the other effective factors in the MENA region is the establishment and assessment of the water, energy and food nexus and the integral and drastic management and then performing the appropriate strategies that such matter will never be possible except using the social capital (Civil participation and the participation of the entire social processes) and the economic quality (Equipping the economy for sustainable wealth creation and perfect employment) through the decentralized professional working groups which include the private sector applying the financial sponsorship and legal supports of the then government.
    Keywords: WEF Nexus, Water-Energy-Food Nexus, GEE, Middle East, North Africa
    JEL: O53 O55 Q01 Q18 Q25 Q4
    Date: 2020–12–08
  8. By: International Monetary Fund
    Abstract: This Technical Assistance report on Jordan discusses that financial system of Jordan is dominated by other depository corporations (ODC), which constitute around 63 percent of the financial system’s assets. The technical assistance mission delivered objectives and agreed with the authorities on an action plan to improve the country’s monetary statistics. Some progress has been made in the Central Bank trial accounts regarding the sectorization and classification of the financial instruments. The Central Bank of Jordan (CBJ) has made substantive progress in improving human resource skills among staff. The accounting principles are found to be broadly in line with the methodology of the IMF with some departures related to market valuation. The accounting and valuation methodology implemented by the ODCs in Jordan are broadly in line with the recommended compilation practices identified in the Monetary and Financial Statistics Manual and Compilation Guide. Considering the change in the source data since 2014, the mission re-mapped the source data, using data from the aggregated balance sheet of the banking sector and the accompanying schedules through a bridge table. The mission built a time series for all the required data and created a tool linking the data to the Standardized report forms. The tool provides CBJ staff with a simpler method for data compilation.
    Keywords: Financial instruments;Financial statements;Business enterprises;Commercial banks;Financial statistics;ISCR,CR,CBJ source data,CBJ trial,CBJ supervision,CBJ staff
    Date: 2019–05–21
  9. By: Grzegorz Peszko; Simon Black; Alexandrina Platonova-Oquab; Dirk Heine; Govinda Timilsina
    Keywords: Public Sector Development - Public Sector Expenditure Policy Energy - Energy Policies & Economics Energy - Energy and Environment Environment - Air Quality & Clean Air Environment - Brown Issues and Health Environment - Pollution Management & Control Macroeconomics and Economic Growth - Taxation & Subsidies
    Date: 2019–04
  10. By: Zolfaghari, Mehdi; Jariani, Farzaneh
    Abstract: With regards to the population growth and urbanization growth, food supply and food security both are among one of the most serious challenges for the countries of the Middle East and North Africa and such challenge can become as the main dilemma and problem for MENA region countries together with the global crises, regional crises and climatic changes. Since these countries are dependent on the imports of the foodstuffs in spite of their remarkable income which results from the both oil & gas exports accordingly any economic and political shock may endanger and jeopardize the food supply in the countries of the foregoing region. Hence, improving the political, commercial relations and the governments' performance which are done for reducing the tensions and all vulnerabilities arising out of the food insecurity will have a great role. In this research, we have studied the effects of institutional, economic and climatic indexes on the food security in MENA region using FMMs method within the time interval of 1995–2019 with regards to the significance of the role of institutional variables together with the economic and climatic ones. Results of this research show that in spite of the governments' endeavours for ensuring the food security, therefore, the food crisis concern will be assumed as a serious one throughout this region due to the failure of the existence of required participation and interaction among the government, private sector and people and the main reason for the above-said crisis is because of the infirmity of institutional variables in the countries existing in MENA regions which include the governance, prosperity, democracy and economic freedom and it should be noted that the war and tensions existing in the region can be known as one of the other drastic coefficients on the food insecurity.
    Keywords: Food security, Middle East and North Africa, GDP, Good Governance, Climate Change, Corruption, Democracy
    JEL: F5 N55 O29 P36 P37 P46 Q1
    Date: 2021–01–01
  11. By: Olumuyiwa S Adedeji; Yacoub Alatrash; Divya Kirti
    Abstract: Given their pegged exchange rate regimes, Gulf Cooperation Council (GCC) countries usually adjust their policy rates to match shifting U.S. monetary policy. This raises the important question of how changes in U.S. monetary policy affect banks in the GCC. We use bank-level panel data, exploiting variation across banks within countries, to isolate the impact of changing U.S. interest rates on GCC banks funding costs, asset rates, and profitability. We find stronger pass-through from U.S. monetary policy to liability rates than to asset rates and bank profitability, largely reflecting funding structures. In addition, we explore the role of shifts in the quantity of bank liabilities as policy rates change and the role of large banks with relatively stable funding costs to explain these findings.
    Keywords: Banking;Central bank policy rate;Deposit rates;Commercial banks;WP,bank,rate,liability,liability rate
    Date: 2019–12–06
  12. By: World Bank
    Keywords: Environment - Air Quality & Clean Air Environment - Climate Change Impacts Environment - Environmental Economics & Policies Environment - Environmental Management Environment - Pollution Management & Control Environment - Water Resources Management Water Supply and Sanitation - Urban Solid Waste Management
    Date: 2019
  13. By: Ghaninejad, Mousa
    Abstract: English Abstract: In this paper, I review the supply and demand side of the electricity market in Iran. I review the potential bidding strategies that are in place in this market. I evaluate the optimality of bidding and introduce a new bidding strategy that could raise the profits of the firms. In the market of this study, firms are allowed to bid step-wise and are constrained to bid ten steps per bid. The market dispatcher estimates the market demand and based on the cumulated supply functions clears the market at one specific price. Those steps that are below the market clearing price will be allowed to produce and sell in the market. I argue that a continuous supply function is optimal in this setting and it is at the profit of the firms to use a supply function as close to a continuous supply as possible, i.e. using all ten steps. Persian Abstract: این مقاله به بررسی عرضه و تقاضا در بازار برق ایران می‌پردازد. ابتدا ساختارهای پیشنهاد قیمت در بازار برق ایران بررسی می‌شود. سپس، بهینگی هر کدام از این ساختارهای پیشنهاد قیمت و ارتباط آن با بازار برق در ایران بررسی می‌شود. در بازار مورد مطالعه، هر تولیدکننده می‌تواند تا ده پله پیشنهاد قیمت بدهد. شرکت برق سپس با تحمین تقاضا و جمع عرضه‌ها در بازار قیمت نهایی را اعلام می‌کند. پله‌هایی که پایین‌تر از قیمت نهایی باشد اجازه‌ی تولید خواهند داشت. من در این مقاله به طور نظری اثبات می‌کنم که استفاده از هر ده پله برای تولیدکننده بهینه است. بنابراین، جهت بیشینه کردن سود، هر تولیدکننده باید تا حد ممکن شبیه تابعی پیشنهاد قیمت بدهد که پیوسته باشد.
    Keywords: Bidding; Electricity Market; Day-ahead Market; Energy; Policy
    JEL: L94 O13 P28
    Date: 2020–12–20

This nep-ara issue is ©2021 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.