nep-ara New Economics Papers
on MENA - Middle East and North Africa
Issue of 2022‒11‒14
seventeen papers chosen by
Paul Makdissi
Université d’Ottawa

  1. Gravity Model–Based Export Potential : An Application to Turkey By Mulabdic,Alen; Yasar,Pinar
  2. Trends and Determinants of Female Labor Force Participation in Morocco : An Initial Exploratory Analysis By Lopez-Acevedo,Gladys C.; Devoto,Florencia; Morales,Matías; Roche Rodriguez,Jaime Alfonso
  3. Cost, Emission, and Macroeconomic Implications of Diesel Displacement in the Saudi Agricultural Sector: Options and Policy Insights By Hossa Almutairi; Marzio Galeotti; Baltasar Manzano; Axel Pierru
  4. Regulatory approximation under ALECA: Assessing the economic and social effects on the Tunisian agricultural sector By Raza, Werner G.; Tröster, Bernhard; Von Arnim, Rudiger; Chandoul, Jihen; Rouine, Chafik Ben
  5. The Impact of Living Arrangements (In-Camp versus Out-of-Camp) on the Quality of Life : A Case Study of Syrian Refugees in Jordan By Obi,Chinedu Temple
  6. The Impact of Corruption on Economic Growth in Tunisia: Application of ARDL Approach By Kaddachi, Hayet; Ben Zina, Naceur
  7. Impacts of COVID-19 on Household Welfare in Tunisia By Kokas,Deeksha; Lopez-Acevedo,Gladys C.; El Lahga,Abdel Rahman; Mendiratta,Vibhuti
  8. Cost, Emission, and Macroeconomic Implications of Diesel Displacement in the Saudi Agricultural Sector: Options and Policy Insights By Amro Elshurafa; HAtem Al Atawi; Fakhri Hasanov; Frank Felder
  9. Tracking Economic Activity in Response to the COVID-19 Crisis Using Nighttime Lights — The Case of Morocco By Roberts,Mark
  10. The Determinants of Regional Foreign Direct Investment and Its Spatial Dependence : Evidence from Tunisia By Bouzid,Bechir Naier; Toumi,Sofiene
  11. Living Standards of Tunisian Households in the Midst of the COVID-19 Pandemic By Alfani,Federica; Dhrif,Dorra; Molini,Vasco; Pavelesku,Dan; Ranzani,Marco
  12. The Role of Expectations for Currency Crisis Dynamics - The Case of the Turkish Lira By Beckmann, Joscha; Czudaj, Robert L.
  13. Social and green economies in the Mena region: through sustainability, public policies and SDGs By Gianluca PASTORELLI; Anastasia COSTANTINI; Samuel BARCO SERRANO
  14. The gender wage gap in Egypt: public versus private sector By Emanuela Ghignoni; Francesco Pastore
  15. Using Poverty Maps to Improve the Design of Household Surveys : The Evidence from Tunisia By Betti,Gianni; Molini,Vasco; Pavelesku,Dan
  16. Welfare and Distributional Impacts of Inflation and the COVID-19 Outbreak in the Islamic Republic of Iran By Rodriguez Takeuchi,Laura Kiku; Atamanov,Aziz
  17. The Long Shadow of Short-Term Schooling Disruption : Analysis of Kuwait's Civil Service Payroll Data By Bilo,Simon; Ajwad,Mohamed Ihsan; Alansari,Ebtesam; Alhumaidan,Lama; Alrashidi,Faleh M F E

  1. By: Mulabdic,Alen; Yasar,Pinar
    Abstract: This paper presents a framework to study countries’ export potentials. It uses a gravity model to develop measures of export and trade policy potentials at the aggregate, bilateral, and industry levels. The methodology is applied to the case of Turkey. The analysis finds that Turkey was moderately under-exporting over 2010-17. The United States, China, and Japan are important untapped destination markets, accounting for US$29 billion (16-17 percent of total exports) of missing exports. Industry-level results suggest that Turkey has high export potential in the electronics and chemical industries.
    Keywords: International Trade and Trade Rules,Trade and Services,Food Security,Health and Sanitation
    Date: 2021–03–01
  2. By: Lopez-Acevedo,Gladys C.; Devoto,Florencia; Morales,Matías; Roche Rodriguez,Jaime Alfonso
    Abstract: The U-shape theory argues that at early stages of development, countries experience a reduction in the female labor force participation, eventually followed by a recovery. In Morocco, female labor force participation is now lower than it was two decades ago due to several factors that are discussed in the paper. There is also a persistent 50-percentage-points gender gap in labor force participation rates, despite improvements typically related to development and female inclusion—such as a higher gross domestic product per capita, lower fertility rates, and better access to education. At the same time, urban job creation has not been able to offset rural job destruction nor the increase in the working age population for both genders. Using data from the Moroccan Labor Force Survey, the World Values Survey, and the Arab Barometer, probit models and a multinomial logit are estimated to explore the challenges affecting female insertion into the labor market. The findings show that higher educational attainment increases the probability of female participation, but this relationship has decreased over time, not being enough to offset other obstacles caused by other individual and household characteristics. Being married and the presence of other inactive women are found to decrease female participation. The educational level of the head of household (typically men) increases female inactivity, suggesting that potentially gender roles may drive women out of the labor market and slow the recovery in women’s participation.
    Keywords: Educational Sciences,Labor Markets,Rural Labor Markets,Gender and Development
    Date: 2021–03–22
  3. By: Hossa Almutairi; Marzio Galeotti; Baltasar Manzano; Axel Pierru (King Abdullah Petroleum Studies and Research Center)
    Abstract: We assess the extent to which the implementation of Saudi Vision 2030 policies enhances the Saudi economy’s resilience to oil price and production shocks, and to the productivity of tradable and non-tradable goods. We extend Blazquez et al.’s (2021) dynamic stochastic general equilibrium model to capture the country’s economic diversification policies and build a resilience index based on impulse responses to shocks.
    Keywords: Applied general model, Discount rate, Discounting
    Date: 2022–09–23
  4. By: Raza, Werner G.; Tröster, Bernhard; Von Arnim, Rudiger; Chandoul, Jihen; Rouine, Chafik Ben
    Abstract: The negotiations on a deep and comprehensive free trade area between Tunisia and the European Union (EU) - also known by its French acronym "Projet d'accord de libre-échange complet et approfondi" (ALECA) - have been ongoing since 2015. Beyond the bilateral reduction of tariffs and quotas, the EU proposes regulatory alignment of Tunisian legislation to EU regulatory standards to foster trade and economic growth. However, taking into account the additional compliance costs for Tunisian producers and the public sector, our impact assessment concludes that ALECA has significant downside risks, as value-added in Tunisian agriculture might decline by -8.3 %. These effects need to be considered in the negotiations and in the broader context for sustainable agricultural development in Tunisia.
    Date: 2022
  5. By: Obi,Chinedu Temple
    Abstract: Refugee camps are believed to represent safe havens for forcibly displaced persons, but studies looking at refugees' quality of life in camps are few. This paper explores how Syrian refugees’ quality of life in camps in Jordan differs from that of Syrian refugees residing outside camps. Using data from the Syrian Refugee and Host Community Survey, the study measures life quality through indicators of subjective life experience and material living conditions. Data are analyzed using advanced statistical methods (difference-in-difference and propensity score matching) to control for selection bias that could skew estimates of causal effects. The results show that refugees living outside camps enjoy a higher quality of life than those living in camps. Out-of-camp refugees are less likely to live below the national abject poverty line or in overcrowded houses. They possess more household assets, are more satisfied with access to services, and report higher life satisfaction. Refugee camps appear to serve as safe havens for refugees who lack the capability to exit camps, and camps could be redundant for those who possess adequate capabilities and freedom to function in the urban and peri-urban areas.
    Keywords: Inequality,Gender and Economics,Gender and Poverty,Economics and Gender,Gender and Economic Policy,Post Conflict Reconstruction,Hydrology,Energy Policies&Economics
    Date: 2021–02–02
  6. By: Kaddachi, Hayet; Ben Zina, Naceur
    Abstract: This study investigates corruption's impact on economic growth in Tunisia. Using time series data to obtain relationships of an empirical nature. The World Development Indicators 2019 helps to gather data from 1998 to 2018. The processing of time series data starts with checking individual series, and ADF and Zivot and Andrews tests help identify variables' stationarity. The mixed order of integration levels recommends using ARDL to obtain the long-run relationships between the variables. The estimation results confirm that corruption demoralizes and discourages private investment in the short and long run. In both the long and short run, the indirect impact of corruption is negative and insignificant for public spending. However, the interaction between human capital and the corruption perception index is positive and insignificant in the short run but negative and significant in the long run.
    Keywords: Corruption, Economic Growth, Tunisia, Time Series, ARDL Approach
    JEL: A13 K29 O50
    Date: 2022–10
  7. By: Kokas,Deeksha; Lopez-Acevedo,Gladys C.; El Lahga,Abdel Rahman; Mendiratta,Vibhuti
    Abstract: COVID-19 is likely to have a large impact on the welfare of Tunisian households. First, some individuals might be more vulnerable to contracting the disease because their living conditions or jobs make them more susceptible to meeting others or practicing social distancing. Lack of adequate access to health insurance, overcrowded living conditions, and low access to water at home are reasons that make the Tunisian poor more susceptible to getting infected or not being able to seek health care in the event that they contract COVID-19. In addition, the elderly in the poorest households could be more susceptible to COVID-19 due to higher prevalence of intergenerational households among the poor. Second, many sectors of the labor market have experienced an economic slowdown, and those employed in these sectors are likely to experience disproportionate effects. Combining the labor shock and price shock simultaneously, the simulations in this paper show an increase in poverty of 7.3 percentage points under a more optimistic scenario and 11.9 percentage points under the pessimistic scenario, and individuals in sectors such as tourism and construction are expected to fall into poverty due to COVID-19. The paper estimates that the government’s compensatory measures targeted toward the hardest hit are expected to mitigate the increase in poverty. Specifically, the increase in poverty will be 6.5 percentage points under the optimistic scenario if mitigation measures are in place vis-Ã -vis in their absence, when the increase in poverty is 7.3 percentage points.
    Keywords: Inequality,Labor Markets,Transport Services,Rural Labor Markets
    Date: 2020–12–17
  8. By: Amro Elshurafa; HAtem Al Atawi; Fakhri Hasanov; Frank Felder (King Abdullah Petroleum Studies and Research Center)
    Abstract: The Saudi agricultural sector relies on diesel for irrigation, which is provided to farmers at a much lower price than the average global price, implying significant opportunity costs. With the aid of soft-coupled power and macro-econometric models, we assess the cost and macroeconomic implications of electrifying irrigation activities in the Saudi agricultural sector. Three electrification scenarios are considered: electrifying each individual farm with a dedicated hybrid renewable micro-grid, electrifying the entire farm cluster with central generation and connecting the entire cluster via transmission to the national grid. Compared with the base-case, connecting the farm cluster to the national grid is found to be the most economical but the least environmentally friendly. The renewable and central generation scenarios are costlier (compared with the transmission scenario) due, respectively, to the high battery costs and gas infrastructure needed.
    Keywords: Diesel Displacement, Agricultural
    Date: 2022–08–24
  9. By: Roberts,Mark
    Abstract: Over the past decade, nighttime lights have become a widely used proxy for measuring economic activity. This paper examines the potential for high frequency nighttime lights data to provide “near real-time†tracking of the economic impacts of the COVID-19 crisis in Morocco. At the national level, there exists a strong correlation between quarterly movements in Morocco’s overall nighttime light intensity and movements in its real GDP. This finding supports the use of lights data to track the economic impacts of the COVID-19 crisis at higher temporal frequencies and at the subnational level, for which GDP data are unavailable. Consistent with large economic impacts of the crisis, Morocco experienced a large drop in the overall intensity of its lights in March 2020, from which it has subsequently struggled to recover, following the country’s first COVID-19 case and the introduction of strict lockdown measures. At the subnational level, while all regions shared in March’s national decline in nighttime light intensity, Rabat – Salé – Kénitra, Tanger – Tetouan – Al Hoceima, and Fès – Meknès suffered much larger declines than others. Since then, the relative effects of the COVID-19 shock across regions have largely persisted. Overall, the results suggest that, at least for Morocco, changes in nighttime lights can help to detect the timing of changes in the direction of real GDP, but caution is needed in using lights data to derive precise quantitative estimates of changes in real GDP.
    Keywords: Disaster Management,Social Risk Management,Hazard Risk Management,Industrial Economics,Economic Theory&Research,Economic Growth,Food Security,Inequality
    Date: 2021–02–04
  10. By: Bouzid,Bechir Naier; Toumi,Sofiene
    Abstract: This paper explores the relationship between key economic and institutional attributes of Tunisian governorates and their ability to attract foreign direct investment inflows. A dynamic generalized method of moments and spatial autoregressive approaches are used to estimate a model of regional foreign direct investment over the recent period. The results provide evidence of regional interdependence of foreign direct investment that appears to be highly clustered along the coastal areas. An increase/decrease of foreign direct investment inflows to a given region creates an incentive/disincentive for other foreign direct investment inflows to the same regions as well as nearby ones. These agglomeration forces are relatively strong in Tunisia in the presence of vertical foreign direct investment. Further, the results indicate that a relatively developed market size, an increase of regional development areas, as well as robust governance practices and infrastructure are positive determinants of regional foreign direct investment inflows. Finally, the paper shows that although some of the determinants exhibit spillover effects on nearby regions, the direct effect on the region represents the bulk of the influence over foreign direct investment inflows.
    Keywords: Financial Economics,Finance and Development,Foreign Direct Investment,Transport Services,Employment and Unemployment,Investment and Investment Climate
    Date: 2020–11–30
  11. By: Alfani,Federica; Dhrif,Dorra; Molini,Vasco; Pavelesku,Dan; Ranzani,Marco
    Abstract: The COVID-19 pandemic has had unprecedented negative socioeconomic effects on the lives of millions of people across the world, particularly among the most vulnerable groups. The COVID-19 outbreak has exacerbated the issues countries were facing before the pandemic such as the unequal access to basic services, markets, labor, and capital. Using five rounds of high-frequency telephone surveys collected by the Tunisian National Institute of Statistics in collaboration with the World Bank, this paper analyzes the deterioration in households’ welfare due to COVID-19, focusing on changes in the labor market. The results show that although employment has now rebounded to pre-crisis levels among the respondents, labor income among wage workers and particularly the self-employed is still below pre-pandemic levels. More than half of the households interviewed report a worsening of their living standards relative to before the start of the pandemic, and for about 40 percent of the poorest, welfare levels have continued to deteriorate. In addition, price increases and a reduction in remittances threaten to undo the progress that has been achieved in raising living standards. While waiting for the economy to rebound, the most vulnerable households will continue to need income support.
    Keywords: Labor Markets,Rural Labor Markets,Health Care Services Industry,Educational Sciences,Inequality
    Date: 2021–03–12
  12. By: Beckmann, Joscha; Czudaj, Robert L.
    Abstract: This paper examines whether and how expectations have contributed to the turbulent path of the Turkish lira since 2008. We derive uncertainty measures surrounding GDP growth, inflation, the interest rate, and exchange rates based on survey data from Consensus Economics. Our results illustrate that forecasts have affected realized exchange rates and stock market returns via increased uncertainty. We also show that expectations regarding monetary policy have changed throughout the sample period. In line with a gradual adjustment of expectations professionals have accounted for the violation of the Taylor rule.
    Keywords: Disagreement, Expectations, Foreign exchange, Survey data, Taylor rule, Turkish lira, Uncertainty
    JEL: F31 F41
    Date: 2022–10–13
  13. By: Gianluca PASTORELLI (Diesis Network); Anastasia COSTANTINI (Diesis Network); Samuel BARCO SERRANO (Diesis Network)
    Abstract: This working paper is based both on literature review and interviews to key informants and stakeholders from or active in the region conducted in the framework of various initiatives: research projects, peer-learning activities, support to networks, policy makers and entrepreneurs. These initiatives have been leading us to connect with the SSE ecosystems in the area called “Southern Neighbourhood†in a European (centric?) perspective. The rationale behind this exercise is an attempt to share a light on the state of play of the public policies and international initiatives bound to support the social and green economies showcasing some examples we consider particularly relevant.
    Keywords: Mena Region, social economy enterprises, place-based approach, social innovation, green transition
    JEL: J18 L31 O35 O53 O55 R11 Q56
    Date: 2022–03
  14. By: Emanuela Ghignoni; Francesco Pastore
    Abstract: The Egyptian Government has taken important steps toward the achievement of "equal pay for work of equal value" between men and women, by recently extending the gender equality legislation from the public sector to the private one. In this paper, we measure the actual degree of gender wage equality in the public and private sectors of the Egyptian labour market, as well as its evolution over the last 20 years and its determinants. To this aim, we first apply the Oaxaca-Blinder decomposition (with sample selection correction) to assess the role of characteristics and coefficients at the mean of the wage distribution in the two sectors. After that, we implement the Machado-Mata decomposition to assess the extent of the "discrimination" effect along the wage distribution in both sectors. To further the analysis, an innovative Inverse-Probability-Weighted Regression Adjustment (IPWRA) procedure is used to assess the joint impact on wages of being a woman and working in the private sector. Lastly, we analyze the cultural determinants of Egypt's low female participation. We find that discrimination plays an important role in the composition of the gap, albeit to a lesser extent in the public sector. We also find evidence of a sticky floor in the private sector and a glass ceiling in the public one. Overall, our results suggest that much remains to be done to reduce gender inequality by implementing more consistently the gender equality legislation in the private sector and seeking to break down cultural barriers to women's work.
    Keywords: Gender Wage Gap; Sample Selection Bias; IPWRA; Public versus private sector; Egypt
    JEL: C31 J16 J24 J31 K31
    Date: 2022–10
  15. By: Betti,Gianni; Molini,Vasco; Pavelesku,Dan
    Abstract: This paper proposes a new method for improving the design effect of household surveys based on a two-stage design in which the first stage clusters, or primary selection units, are stratified along administrative boundaries. Improvement of the design effect can result in more precise survey estimates (smaller standard errors and confidence intervals) or reduction of the necessary sample size, that is, a reduction in the budget needed for a survey. The proposed method is based on the availability of a previously conducted poverty mapping, that is, spatial descriptions of the distribution of poverty, which are finely disaggregated in small geographic units, such as cities, municipalities, districts, or other administrative partitions of a country that are linked to primary selection units. Such information is then used to select primary selection units with systematic sampling by introducing further implicit stratification in the survey design, to maximize the improvement of the design effect. The proposed methodology has been implemented for the new 2021 Household Budget Survey in Tunisia, conducted under a cooperation project funded by the World Bank. The underlying poverty mapping is based on the 2015 Household Budget Survey and the 2014 Population and Housing Census.
    Keywords: Inequality,Public Sector Administrative&Civil Service Reform,Economics and Finance of PublicInstitution Development,Democratic Government,State Owned Enterprise Reform,Public Sector Administrative and Civil Service Reform,De Facto Governments,Labor&Employment Law,Small Area Estimation Poverty Mapping,Poverty Lines,Poverty Assessment,Poverty Monitoring&Analysis,Poverty Diagnostics,Poverty Impact Evaluation,Crime and Society
    Date: 2021–05–03
  16. By: Rodriguez Takeuchi,Laura Kiku; Atamanov,Aziz
    Abstract: This paper simulates the welfare and poverty impacts of the COVID-19 pandemic in the Islamic Republic of Iran, emphasizing the role of inflation, which lowered the purchasing power of households and had heterogeneous impacts across the distribution and in different regions of the country. First, income losses are estimated with a microsimulation analysis based on shock scenarios. Second, combining data on price changes with expenditure baskets for various groups of households, group-specific price indices are calculated. These are then applied to the post-shock income changes to assess the deterioration of living standards associated with inflation. Poverty substantially increases, by up to 21 percentage points, as a combined result of the fall in household incomes and high inflation through the pandemic. Iranians in the bottom half of the welfare distribution, those working in services and high-contact economic sectors, and those in rural areas are disproportionately affected.
    Keywords: Inequality,Inflation,Employment and Unemployment,Health Care Services Industry
    Date: 2021–03–02
  17. By: Bilo,Simon; Ajwad,Mohamed Ihsan; Alansari,Ebtesam; Alhumaidan,Lama; Alrashidi,Faleh M F E
    Abstract: This paper estimates the long-term impacts of schooling disruptions on private returns to schooling in Kuwait. It applies an instrumental variables approach to estimate the private returns to schooling, using unique civil service payroll data, with Kuwaiti students’ exposure to the Gulf War (1990–91) as the instrument. The Gulf War is a suitable instrument because it profoundly affected Kuwaiti students' schooling at the time and is unlikely to be correlated with many potentially problematic omitted variables, such as students’ ability. The analysis finds that (i) people who were of schooling age during the Gulf War tend to have lower educational attainment than people who were of schooling age after the Gulf War; (ii) men who were of schooling age at the time of the Gulf War earn on average 5.6 percent less for each year of schooling lost, and women earn correspondingly 6.8 percent less for each year of schooling lost; (iii) students who were in lower grades during the Gulf War tend to suffer a greater percentage wage loss for each year of lost schooling.
    Keywords: Armed Conflict,Educational Sciences,Pensions&Retirement Systems,Economics of Education,Education Finance,Labor Markets
    Date: 2021–04–26

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