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on MENA - Middle East and North Africa |
| By: | Thibault Lemaire (Université Paris 1 Panthéon – Sorbonne) |
| Abstract: | For more than a decade, civil conflicts intensity has been high in the Middle East and North Africa, yet the monetary and financial impacts of such episodes have received relatively little attention. Using macroeconomic and conflict panel data for Arab League members, Iran and Turkey during the period 1970–2018, this paper constructs a country-specific real exchange rate misalignment index and adopts an instrumental variable approach to show that civil conflicts lead to real exchange rate overvaluations in the region: a 1 unit increase in civil conflict intensity leads to a 0.24 unit increase in the RER misalignment index. Economic policy during post-conflict transitions should be elaborated based on a strategy to realign the currency in order to prevent further macroeconomic imbalances and foster social stability, economic growth and long-term development. |
| Date: | 2021–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1495&r=ara |
| By: | Badi H. Baltagi (Department of Economics and Center for Policy Research, Syracuse University); Yusuf Soner Baskaya (University of Glasgow, Adam Smith Business School) |
| Abstract: | This paper estimates spatial wage curves for formal and informal workers in Turkey using individual level data from the Turkish Household Labor Force Survey (THLFS) provided by TURKSTAT for the period 2008- 2014. Unlike previous studies on wage curves for formal and informal workers, we extend the analysis to allow for spatial effects. We also consider household characteristics that would affect the selection into formal employment, informal employment, and non-employment. We find that the spatial wage curve relation holds both for formal and informal workers in Turkey for a variety of specifications. In general, the wages of informal workers are more sensitive to the unemployment rates of the same region and other regions than formal workers. We find that accounting for the selection into formal and informal employment affects the magnitudes but not the significance of the spatial wage curves for the formal and informal workers with the latter always being larger in absolute value than that for formal workers. |
| Date: | 2022–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1544&r=ara |
| By: | Foued Badr Gabsi (University of Sfax, Tunisia.); Rihab Bousnina (University of Sfax, Tunisia.) |
| Abstract: | This paper examines the relationship between the current account balance and participation in global value chains (GVCs) while considering institutional quality in the Middle East and North Africa (MENA) region over the period 2006-2018. We identify the key fundamentals of current account balances by estimating Bayesian Model Averaging (BMA) supplemented by the General-to-Specific (GETS) method. We find that integration into GVCs has a significant positive effect on the current account, conditional on institutional quality. These findings suggest that for MENA countries to better integrate into and benefit from GVCs, policies should target improvements in the institutional framework.Length: 35 |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1556&r=ara |
| By: | Eleftherios Giovanis (Aydin Adnan Menderes University); Oznur Ozdamar (Izmir Bakircay University) |
| Abstract: | Drought has erupted across the Middle-East, as a result of climate change and global warming, leading to a considerable reduction in rainfall and snowfall, as well as a substantial drop in water resources. Climate change is, without a doubt, one of Iraq’s most pressing issues, with considerable negative consequences for the environment, water resources, and the economy, particularly in the agricultural sector. With a growing global population and other factors, the effects of climate change, water ownership and distribution will certainly become more critical. The EuphratesTigris water basin is a major source of water supply for Turkey and Iraq, where the latter is a downstream riparian country and the former is an upstream country. Turkey is most vulnerable to climate change as the country will experience a substantial decline in the annual surface runoff. However, Turkey will suffer less than Iraq, which as a downstream country, relies primarily on the water released by Turkey as the upstream country. The empirical analysis relies on data from the Iraqi Household Socio-Economic Survey (IHSES) conducted in 2012 and the 2017 Rapid Welfare Monitoring Survey. We apply simultaneous unrelated regressions equations (SURE) with Probit models. We further extend the analysis by incorporating an instrument variables (IV) approach considering the population of the nearest Turkish city to where the dam is located, the water capacity, and the distance between this dam and the respondent’s governorate in Iraq. Similarly, we construct other two instruments considering the distance between the dams in Iraq and in Syria and the nearest governorate along with the dams’ water capacity and the population of the governorate in Iraq. The findings show a significant impact of climate change-related shocks on income, assets, food production and stock, and the overall economic situation of households in Iraq. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1517&r=ara |
| By: | Hala ElBehairy (American University in Cairo); Rana Hendy (American University in Cairo); Shaimaa Yassin (McGill University) |
| Abstract: | This paper relies on a gendered lens to asses if the COVID-19 health crisis has differently affected women and men labor market outcomes in four MENA countries, namely Egypt, Jordan, Tunisia and Morocco. The paper first overviews employment, unemployment and participation trends during the pandemic as opposed to pre the outbreak of the virus. It then focuses on documenting a number of facts about worker flows pre to post the outbreak of the Coronavirus, focusing on gender differences and volatility of private sector jobs. By focusing on four MENA countries to address its core research questions, the study provides a comprehensive review of the economic impacts of COVID-19, including the macroeconomic impacts, the existing evidence on employment, and non-employment trends, and post-COVID19 government assistance measures both for general economic relief and specifically for our population of interest i.e. women. The paper also uses a set of harmonized micro datasets from the ERF COVID-Monitor data to examine labor market stocks and worker flows by gender on a country-by- country basis amid and post the COVID-19 pandemic outbreak. We decompose the contributions of worker flows by sector and type of employment to fluctuations in employment, unemployment and participation post the pandemic. The main findings of this paper show that COVID-19 has resulted mainly in decreases in employment, and increases of unemployment. Unemployment levels have revealed to be substantially higher post COVID-19, as opposed to pre-COVID levels, with significantly higher rates and increases for females. Female workers in the private wage employment sector have been the most vulnerable and their (out-of-employment) exit flows have substantially contributed to the rise in unemployment. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1559&r=ara |
| By: | Hasan Murat Ertugrul (Economic Research Forum); Burak Pirgaip (Hacettepe University) |
| Abstract: | We aim at scrutinizing the relationship between construction investments and economic development for 10 greatest economies in the Middle East and North Africa (MENA) region, namely, Saudi Arabia, Turkey, Iran, United Arab Emirates, Egypt, Iraq, Qatar, Algeria, Kuwait, and Morocco, between 1970 and 2018. By employing second generation panel data modelling tools, we find that there is an inverted U-shaped pattern implying that the share of construction investments started to decline at some point in time as the economic growth reached a certain threshold. We argue that MENA countries should reconsider their construction-induced growth policies and incorporate alternative options supported by innovative and environmental-friendly technologies to attach much more importance to the role of construction in future economic development plans. |
| Date: | 2021–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1476&r=ara |
| By: | Hany Abdel-Latif (Swansea University); Hala Abou-Ali (Cairo University, Egypt); Yasmine Abdelfatah (Universities of Canada, Egypt); Nada Rostom (American University Cairo, Egypt); Amal Abdelfatah (Universities of Canada, Egypt); Said Kaawach (University of Huddersfield, UK) |
| Abstract: | This paper investigates the coupled dynamics of climate and growth in the Middle East and North Africa (MENA) region, considering exogenous shocks such as the COVID-19, with no presumptions on the direction of causality. We utilise temperature and precipitation departures from their historical trends to quantify climate change. We estimatecountry-specific and panel vector autoregressive models with exogenous variables to supplement existing attempts that integrate climate change in economic modelling. Our findings lend evidence to the interrelation between climate change and economic growth without ruling out bi-directional causality, a reality that many climate studies tend to overlook. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1523&r=ara |
| By: | Ali Fakih (Lebanese American University); Yara Sleiman (Lebanese American University) |
| Abstract: | This paper investigates gender differences in political participation across 10 countries in the Middle East and North Africa (MENA) region using data extracted from the World Values Survey (2010-2014). A distinction is made between two different participation types, institutional and non-institutional. We utilize an ordered logit model to evaluate whether the gender gap in both forms is mediated by demographic and attitudinal controls and assess whether variables influencing participation affect men and women differently. We find that socioeconomic resources and political attitudes are correlated with higher levels of participation. However, the analysis reveals a persistent gender gap that can be generalized to the entire spectrum of engagement in the MENA, with larger gaps for less institutionalized forms. |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1504&r=ara |
| By: | Awatef Ourir (University of Jendouba); Elie Bouri (Lebanese American University); Essahbi Essaadi (University of Manouba) |
| Abstract: | This paper contributes to the old debate on the dynamic correlation between gold and stock markets by considering a spectral approach within the framework of portfolio hedging. Specifically, we consider eight MENA stock markets (Tunisia, Egypt, Morocco, Jordan, the United Arab Emirates, Saudi Arabia, Qatar, and Oman) and examine the optimal composition between gold and the stock market index, with a minimum portfolio risk and a high expected return. Based on the spectral approach, we propose seven portfolio structures and evaluate them through a comparison with the conventional DCC-GARCH method. The main results show that the spectral-based approach outperforms the DCC-GARCH method. In fact, the optimal gold-stock composition depends on the spectral density of each stock market index, where a stock market index with a stable spectral density requires more investments in gold than a stock market index with an unstable spectral density. |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1511&r=ara |
| By: | Murat Demirci (Koç University); Murat Güray Kirdar |
| Abstract: | Turkey hosts the largest population of refugees globally; however, we know little about their labor market outcomes at the national level. We use the 2018 round of the Turkey Demographic and Health Survey, which includes a representative sample of Syrian refugees in Turkey for the first time, to examine a rich set of labor market outcomes. We find that the native-refugee gap in men’s employment in Turkey (in favor of natives) is much smaller than that reported for most developed countries. Moreover, men’s employment peaks quite early (one year) after arrival and remains there, whereas women’s employment is lower, to begin with, and changes little over time. Once we account for demographic and educational differences, the native-refugee gap in men’s (women’s) paid employment reduces to 4.7 (4.0) percentage points (pp). These small gaps conceal that refugees’ formal employment is much lower. Even after accounting for the differences in covariates, refugee men’s formal employment rate is 58 pp lower. In addition, the native-refugee employment gap is the smallest in manufacturing for men and agriculture for women, and the gap is also much smaller in wage-employment than self-employment and unpaid family work. Finally, accounting for the covariates, the native-refugee employment gap widens for older and for more educated groups, and the gap in men’s employment vanishes for refugees whose mother tongue is Turkish but persists for refugees whose mother tongue is Arabic or Kurdish. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1588&r=ara |
| By: | Erdal Özmen (Middle East Technical University); Fatma Tasdemir (Sinop University) |
| Abstract: | This study investigates whether the impacts of natural resource endowments (NREs) on growth are invariant on an endogenously estimated threshold level for international financial integration (IFI) in 13 Middle East and North Africa (MENA) economies over the 1970-2019 period. Our dynamic panel threshold estimation results suggest that NREs encourage growth up to a certain threshold level of IFI, beyond which the impact of NREs decreases for the sample of Gulf Cooperation Council (GCC) countries. This impact even becomes negative for the non-GCC economies. We also decompose IFI as resident-driven asset flows (capital outflows) and non-resident-driven liability flows (capital inflows) to investigate whether the direction of financial integration matters. We find that asset flows matter for the sample of GCC countries. There is a positive association between NREs and growth; however, this relationship diminishes with more capital outflows. Liability flows provide a data-driven estimated threshold for the non-GCC countries. NREs have a growth-enhancing effect in economies with fewer capital inflows but tend to dampen growth in economies with more capital inflows. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1567&r=ara |
| By: | Adel Ben Youssef (GREDEG-CNRS & University Côte d’Azur, France ISEM 24, Avenue des Diables Bleus, Nice); Burim Prenaj (Faculty of Economics, University of Prishtina “Hasan Prishtina” Str. Agim Ramadani, Kosovo) |
| Abstract: | COVID-19 mobility restrictions have disrupted labor markets in Egypt, Tunisia and Morocco; thousands of workers have lost their jobs which has had consequences for poverty, food security, borrowing behavior and internal migration. However, empirical evidence regarding the effects of COVID-19 in these countries is scarce, due mainly to lack of data. This paper explores the effects of job losses due to COVID-19 on household income and food security. It investigates the coping mechanisms triggered and explores the heterogeneous effects of COVID-19 induced job losses on the same outcomes for different vulnerable population subgroups e.g. women, young workers, informal workers, rural workers, etc. Methodologically, we assess the effects of the COVID-19 pandemic on individual outcomes in Tunisia, Morocco and Egypt by comparing differences in the outcomes of interest between respondents who lost their jobs due to the pandemic and those who did not. To account for selection into job loss, we employ propensity score weighting which balances job-losses and retained jobs for a set of common characteristics. Our results show that job-losers have suffered greater decreases in household income and a simultaneous considerably lower level of food security compared to job retainers. We show also that job-losers have a higher propensity to consume their savings, get help from relatives, sell assets and borrow from family. The webinars, reports and papers are supported by the project “Advancing the Decent Work Agenda in North Africa (ADWA’)”, implemented by the International Labour Organization (ILO) and the Swedish International Development Cooperation Agency (Sida). The project aims to promote job-rich growth, International Labour Standards (ILS) and their application at the enterprise level. It works at the policymaking level in order to support evidence-based decisions on key dimensions of the Decent Work Agenda. This project was made possible by the generous contributions of the International Labor Organization (ILO), Agence Française de Développement (AFD), The Foreign Commonwealth and Development Office (FCDO) of the Government of the United Kingdom, the World Bank and the Arab Fund for Social and Economic Development (AFESD). |
| Date: | 2022–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:swp20224&r=ara |
| By: | Marouane Alaya (Portland State University) |
| Abstract: | In this paper we study the export diversification neighboring effects in 15 MENA countries for the period spanning from 2000 to 2019. The determinants of MENA export diversification and local potential spillovers are explored via a bundle of spatial econometric tools. The estimation results show the existence of feedback loops between neighboring countries in favor of export concentration. However, this could be mitigated by several economic factors that are under the control of MENA countries. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1612&r=ara |
| By: | Samar Abdelmageed (The British University in Egypt) |
| Abstract: | The main objective of this paper is to analyze the interrelationships between financial integration, inclusion, and stability in the Middle East and North Africa (MENA) region and the role of crises in these linkages. This is the first study attempting to examine the interrelations among these variables in MENA financial markets. To achieve its objective, the paper starts by assessing regional integration among MENA stock markets using correlational analysis and the DCC GARCH models. Then, it builds a PVAR model to examine the relationships between integration, inclusion, and stability in the MENA region. The results show that regional integration is still limited in the MENA region, despite growing linkages with other international markets. Regional integration in the MENA region is more pronounced among countries that lie within closer geographical proximities. Moreover, crises, whether financial or political, also tend to increase regional correlations and linkages among MENA markets, although the impact of financial crises is higher compared to that of political instabilities. The analysis highlighted the positive short-term impacts of regional integration on inclusion in the MENA region; however, these impacts could not be maintained for longer periods. In contrast, international integration had negative effects on inclusion and stability that diminished over time. No linkages were found between financial inclusion and stability in the MENA region |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1518&r=ara |
| By: | Mehmet Balcilar (Eastern Mediterranean UniversityAuthor-Name: Ahmed Elsayed; Zagazig University); Shawkat Hammoudeh (University of Economics HCMC) |
| Abstract: | This study examines the financial connectedness and risk transmission among MENA economies by accounting for financial connectedness in the short and long run as well dependency under extreme market conditions and network graph analysis. To this end, Composite Financial Stress Indices are constructed for 11 MENA countries. In addition, a battery of econometric models is applied including the standard spillover approach, the frequency domain method, the quantile connectedness technique, and connectedness networks analysis. Using daily data over the period from June 30, 2006 to June 30, 2021, the empirical results show a positive and strong association between financial stress co-movements and spillovers in those MENA countries, particularly during the long run and high extreme stress periods. Furthermore, the five Gulf countries are strongly financially connected among themselves than with the other countries. Contrary, to Tunisia, Saudi Arabia is the main financial stress and risk transmitter to other MENA economies whereas, the North African countries are relatively mild receivers of risk. Finally, the more open countries in terms of capital controls, particularly Kuwait, Oman, Qatar, and UAE seem to play a more central role in financial connectedness and risk spillovers |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1605&r=ara |
| By: | Caroline Krafft (St. Catherine University, Department of Economics and Political Science); Ragui Assaad (University of Minnesota, Humphrey School of Public Affair); Mohamed Ali Marouani (UMR Développement et sociétés, IRD and Paris 1 Panthéon-Sorbonne University); Ruby Cheung (St. Catherine University, Department of Economics and Political Science); Ava LaPlante (St. Catherine University, Department of Economics and Political Science) |
| Abstract: | The COVID-19 pandemic has not only led to a health crisis, but also to economic and labour market crises. In an effort to avert the public health threat, countries in the Middle East and North Africa (MENA) initially put in place some of the world’s most stringent government responses. This paper explores how labour market outcomes for MENA workers have evolved during the COVID-19 pandemic. The paper uses the International Labour Organization (ILO) and the Economic Research Forum (ERF) COVID-19 MENA Monitor phone surveys in Egypt, Jordan, Morocco, Sudan and Tunisia, with waves spanning November 2020 to August 2021. Analyses examine outcomes of employment, unemployment, and labour force participation, along with hours of work and hourly wages. Results show differences in the evolution of pandemic-era labour markets by workers’ gender, age, and education, along with their February 2020 labour market status and industry, as well as their pre-pandemic income. Employment rates have largely recovered and hours of work generally increased. Inequality in wages was initially exacerbated by the pandemic, but there has been at least some recovery on this margin as well. The webinars, reports and papers are supported by the project “Advancing the Decent Work Agenda in North Africa (ADWA’)”, implemented by the International Labour Organization (ILO) and the Swedish International Development Cooperation Agency (Sida). The project aims to promote job-rich growth, International Labour Standards (ILS) and their application at the enterprise level. It works at the policymaking level in order to support evidence-based decisions on key dimensions of the Decent Work Agenda. This project was made possible by the generous contributions of the International Labor Organization (ILO), Agence Française de Développement (AFD), The Foreign Commonwealth and Development Office (FCDO) of the Government of the United Kingdom, the World Bank and the Arab Fund for Social and Economic Development (AFESD). |
| Date: | 2022–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:swp20223&r=ara |
| By: | A. Yasemin Yalta (Hacettepe University); A. Talha Yalta (TOBB University of Economics and Technology) |
| Abstract: | We analyze the determinants of capital flight in three resource scarce MENA countries namely Egypt, Morocco, and Tunisia. Our methodology involves both the linear and the nonlinear auto-regressive distributed lag (ARDL) cointegration approach, with a focus on asymmetric relationships between capital flight and the real exchange rate in order to distinguish the effects of appreciation and depreciation of the domestic currency on capital flight. Based on annual data between 1975 and 2019, we demonstrate that capital flight responds more to the real exchange rate depreciation in Egypt, and that the Arab Spring has resulted in higher capital flight in Egypt and Morocco in the long run. Our results also reveal that the real GDP growth rate and inflation are important factors affecting capital flight in Morocco, while the lagged values of capital flight and the institutional quality are more prevalent in Tunisia. |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1510&r=ara |
| By: | Ugur Aytun (Kütahya Dumlupinar University); Cem Özgüzel (OECD) |
| Abstract: | On 24 November 2015, Turkish military shot down a Russian fighter jet near the Syrian-Turkey border after it violated Turkish airspace for about 17 seconds. Russia retaliated by imposing an embargo on 17 agricultural HS-6 level products from Turkey that would be effective for 22 months. We exploit this natural experiment to evaluate the impact of sanctions on Turkish exports and exporters. Using restrictive customs and firm-level data in a triple difference framework, we estimate the effect of these sanctions on the exports towards Russia, for embargoed and non-embargoed products. We estimate a total trade loss of $3.25bn for Turkish exports, 65% of which stemming from non-embargoed products. We investigate the underlying mechanism through firm-level analysis. First, we find that number of firms that trade with Russia and export volumes decreased dramatically. Second, firms re-routed their exports to bordering countries to circumvent the sanctions. Finally, we find that medium and large firms managed to adjust to the crisis while small firms suffered the main effects of the embargo. |
| Date: | 2021–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1482&r=ara |
| By: | Zeina Jamaluddine (London School of Hygiene and Tropical Medicine); Maia Sieverding (American University of Beirut) |
| Abstract: | Cash transfers have become an increasingly common feature of social protection systems in the Middle East and North Africa (MENA) region, including in humanitarian settings. Globally, there is strong evidence that cash transfers are effective in improving basic needs outcomes such as food insecurity. However, attention to the potential psychosocial effects of cash transfers, including improved mental health or subjective wellbeing, has been more recent and there is very little literature from the MENA region. In this paper we examine the associations between household receipt of cash transfers, food insecurity and the subjective wellbeing of youth in Jordan. Youth in Jordan, as elsewhere in the region, face numerous health and socioeconomic challenges during the transition to adulthood. The potential of cash transfers to improve psychosocial wellbeing during this period of life could therefore have long-term positive consequences. Our analysis relies on the 2020-21 Survey of Young People in Jordan, which is nationally representative of Jordanian and Syrian youth aged 16-30. We use ordinary least squares regression models to examine the predictors of household food insecurity and youth subjective wellbeing. Through step-wise model building we examine the potential role of food insecurity as a mediator in the relationship between receipt of cash transfers and youth subjective wellbeing. Twenty percent of Jordanian-headed households and 90% of Syrian-headed households with youth received at least one cash transfer. Nevertheless, household-level food insecurity was high, at 45% of Jordanian and 74% of Syrian households. There was also a substantial burden of poor subjective wellbeing among Jordanian (39%) and Syrian (52%) youth. Household receipt of social assistance was not predictive of subjective wellbeing among Jordanian youth. Only receipt of all three major United Nations agency cash transfers for refugees was a significant predictor of better subjective wellbeing among Syrian youth. While household food insecurity was a significant predictor of worse subjective wellbeing among youth of both nationalities, we do not find strong support for the hypothesis that food security is an important mediator of the association between cash transfers and subjective wellbeing for this population. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1560&r=ara |
| By: | Hala Abou-Ali (Cairo University); Ronia Hawash (Butler University); Rahma Ali (New York University); Yasmine Abdelfattah (University of Prince Edward Island) |
| Abstract: | Climate change and its expected consequences have been a growing global concern. This study aims to examine the impact of changes in climate indicators on labor supply in the Middle East and North Africa (MENA) region. We use different datasets, including the Integrated Labor Market Panel Surveys of Egypt, Jordan, and Tunisia spanning the period 2006-2018 matched with a globally gridded climate dataset to test the impact of changes in temperature, humidity, and precipitation on weekly labor working hours. We differentiate between “high-risk” groups engaged in economic activities with higher exposure to climate and “low-risk” groups with relatively less exposure to climate. Our results indicate that changes in temperature and humidity have a significant impact on labor working hours, whereas precipitation had no significant effect; yet, the marginal impact of changes in temperature and humidity differs between high-risk and low-risk groups. The results show that working hours are impeded by heat and humidity after a specific threshold. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1515&r=ara |
| By: | Siham Matallah (University of Oran 2) |
| Abstract: | This paper aims, on the one hand, to investigate the impact of corruption on economic diversification in 11 oil-abundant Middle East and North Africa (MENA) countries and three successful diversifiers (Canada, Norway, and Malaysia) over the period 1996-2019. This is done using the Arellano-Bond difference Generalized Method of Moments (GMM) estimator that is effective in addressing the endogeneity problem. On the other hand, the paper aims to reveal how much the level of economic diversification will increase if MENA oil exporters have control of corruption scores similar to a successful diversifier like Canada. The main findings indicate that higher control of corruption leads to more diversification while higher oil rents lead to poor diversification in oil-exporting MENA countries. The joint impact of control of corruption and oil rents is effective in boosting economic diversification in MENA oil exporters. The results also reveal that the rate of improvement in diversification brought on by replacing MENA oil exporters’ control of corruption scores with those of Canada is 0.53 percent. Closing the control of corruption gap determines how quickly MENA oil exporters can promote economic diversification. Furthermore, non-Gulf Cooperation Council (GCC) countries need to exert much more effort compared to GCC countries in order to catch up with Canada’s control of corruption level. Most non-GCC countries must first address the serious problem of instability, since the more unstable the environment, the harder it is to control and handle corruption. Length: 30 |
| Date: | 2021–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1501&r=ara |
| By: | Fatma Tasdemir (Sinop University); Seda Ekmen Özçelik (Ankara Yildirim Beyazit University) |
| Abstract: | This paper investigates whether the impact of foreign direct investment (FDI) on CO2 emissions may change depending on the data-driven estimated threshold levels for the country characteristics (CC) including human capital and governance in a panel of 13 Middle East and North Africa (MENA) economies over the 1996-2019 period. Our results strongly suggest that endogenously estimated CC thresholds matter for the environmental impact of FDI inflows. The pollution haven hypothesis which maintains that FDI inflows lead to pollution, appears to be valid for economies with weak CC. On the other hand, the pollution halo argument suggesting FDI lowers the emissions appears to be hold in countries with strong CC. The empirical findings in this study suggest that policies aiming to improve human capital and governance may be expected not only to increase the economic benefits of FDI in terms of growth but also mitigate the negative environmental impacts of FDI in the MENA region. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1608&r=ara |
| By: | Thibault Lemaire (1Banque de France & Université Paris 1 Panthéon - Sorbonne) |
| Abstract: | Water scarcity and droughts have long characterized the Middle East and North Africa, and climate change represents an additional challenge to this region’s development prospects. Using macroeconomic and climate panel data for Arab League members, Iran and Turkey during the period 1960-–2018, this paper assesses the effects of sustained drought deviations from their historical norms on output growth in the region and shows that droughts decrease output growth in oil importing countries, with no or statistically weakly significant positive effects in oil exporting countries. These effects do not strengthen as the horizon increases and vanish after one year but do not revert in subsequent periods, leading to lasting losses in output level in oil importing countries. The agricultural sector and civil violence appear to be two of the transmission channels. The results advocate for carefully planned economic diversification in the region and shed light to associated risks. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1578&r=ara |
| By: | Najia Maraoui (University of Monastir); Thouraya Hadj Amor (University of Monastir); Islem Khefacha (University of Monastir); Christophe Rault (University of Orléans) |
| Abstract: | In this paper, we investigate how economic, political, and institutional factors affect the choice of exchange rate regimes using data on eight Middle East and North Africa (MENA) countries over the 1984-2016 period. Specifically, we run random-effects ordered probit regressions of the likelihood of exchange rate regimes on the potential determinants of exchange rate regimes. Three important findings emerge from the analysis. The first finding is that political and institutional factors play an important role in determining the exchange rate regime in MENA countries, where a democratic political regime and a low level of corruption increase the probability of opting for a fixed regime, while strong governments, political stability (such as less internal conflicts and more government stability), more law and order enforcement, and a left-wing government decrease the probability of opting for a fixed regime. The second finding is that bureaucracy, independent central banks, elections, terms of trade, and monetary independence have no effect on the choice of exchange rate regimes. The third finding is that financial development is not a robust determinant of the choice of exchange rate regimes. Our results still hold when considering alternative specifications, and they have important implications for policymakers in MENA countries |
| Date: | 2021–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1498&r=ara |
| By: | Imène Berguiga (University of Sousse, Tunisia); Philippe Adair (University Paris-Est Créteil) |
| Abstract: | Do female entrepreneurs in MENA countries face obstacles, either exogenous (discrimination) or endogenous (self-selection), in funding their businesses? Literature reviews provide controversial evidence thereof and, so far, very few papers tackled this funding issue for female entrepreneurs in MENA countries. A pooled sample of 6, 253 enterprises from the 2019/2020 World Bank Enterprise Surveys (WBES) including six MENA countries (Egypt, Morocco, Tunisia, Jordan, Lebanon, and Palestine) documents the financial behavior of both owners and managers according to gender. Two probit regression models address loan supply and loan demand with respect to discrimination versus self-selection. There is self-selection and discrimination against female owners but not discrimination against female managers. We provide a robustness test by estimating the models on a sub-sample of micro, small, and medium-sized enterprises. Sampling biases in the WBES, together with the characteristics of female clients of microfinance institutions, suggest that micro-entrepreneurs would have faced bank discrimination and self-selection obstacles. Hence, public authorities should support pooling loan guarantees in favor of female entrepreneurs (i.e., positive discrimination). |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1602&r=ara |
| By: | Mohammed Elhaj Mustafa Ali (Development Studies and Research Institute, University of Khartoum); Ebaidalla Mahjoub Ebaidalla (Department of Economics, University of Khartoum) |
| Abstract: | The worldwide precautionary measures adopted to contain the COVID-19 pandemic in early 2020 imposed a drastic negative impact on the performance of the business sector. To avoid losses and negative consequences, many rms have adopted digital solutions. This study assesses the role of the COVID-19 outbreak in accelerating digital transformation in the Middle East and North Africa (MENA) region. The analysis relied on micro data collected from 5, 480 rms surveyed by the ILO/ERF COVID-19 MENA Monitor Enterprise Survey (CMMENT) in Egypt, Jordan, Morocco, and Tunisia. The analysis shows that the characteristics of the rm, including rm size and foreign ownership, spur digital transformation in the business sector. Moreover, rms encountering challenges, complying with pandemic containment measures, receiving support from government are more likely to digitize. Furthermore, the results demonstrate a strong association between the pandemic outbreak and digitization and that the rms operating in the service sector have a higher likelihood to adopt digital solutions. The webinars, reports and papers are supported by the project “Advancing the Decent Work Agenda in North Africa (ADWA’)”, implemented by the International Labour Organization (ILO) and the Swedish International Development Cooperation Agency (Sida). The project aims to promote job-rich growth, International Labour Standards (ILS) and their application at the enterprise level. It works at the policymaking level in order to support evidence-based decisions on key dimensions of the Decent Work Agenda. This project was made possible by the generous contributions of the International Labor Organization (ILO), Agence Française de Développement (AFD), The Foreign Commonwealth and Development Office (FCDO) of the Government of the United Kingdom, the World Bank and the Arab Fund for Social and Economic Development (AFESD). |
| Date: | 2022–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:swp20222&r=ara |
| By: | Franklin Allen (Brevan Howard Centre at Imperial College) |
| Abstract: | Globalization, together with Fintech – in other words, the application of technology to finance – are in the process of revolutionizing the financial services industry. This paper looks at this process in the MENA region and focuses on two sets of countries. The first set comprises the high-income countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. The second group consists of the middle-income countries of Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco, and Tunisia. Countries can benefit from fintech to differing degrees in terms of the financial inclusion of both households and firms, especially small- and medium-sized enterprises (SMEs). Advances in credit scoring, digital banking, and peer-to-peer lending have the potential to transform banking if properly implemented. Distributed ledger, blockchain, and cryptocurrency technologies have enabled Initial Coin Offerings (ICOs). These can greatly improve the number of start-ups and their subsequent growth. They also enable Central Bank Digital Currencies (CBDCs) that may significantly improve central banks’ effectiveness of intervening in the financial system and economy. Finally, appropriate cybersecurity and financial regulation are needed to ensure that fintech can achieve these improvements. Policymakers should be accommodative towards fintech innovations to obtain their full potential benefit. |
| Date: | 2021–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1489&r=ara |
| By: | Ahmed H. Elsayed (Durham University); Nader Naifar (University of Sfax); Ahmed H. Elsayed (University Lahore) |
| Abstract: | This paper investigates the interaction between monetary policy and financial stability in the Gulf Cooperation Council (hereafter GCC) countries by introducing a new composite financial stability index to monitor the financial vulnerabilities and crisis periods. To this end, the study estimated monetary policy reaction functions for each of the GCC countries (namely, Bahrain, Kuwait, Saudi Arabia, and the United Arab Emirates) using the Nonlinear Autoregressive Distributed Lag Model (NARDL) over the period from 2006-Q4 to 2020-Q2. Empirical findings indicate that monetary authorities' response to the deviation of inflation from their target level, output gap, or exchange rate movement differ in terms of magnitude, sign, and significance across the GCC countries. The results further explain that monetary authorities react significantly to negative or positive shocks in financial stability, but their reaction is different in the short-run or long run. Overall, an augmented Taylor rule including financial stability as an additional monetary policy objective is more appropriate for the GCC countries. |
| Date: | 2021–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1474&r=ara |
| By: | Demirci, Murat (Koc University); Foster, Andrew (Brown University); Kirdar, Murat G. (Bogazici University) |
| Abstract: | This study examines disparities in health and nutrition among native and Syrian-refugee children in Turkey. With a view toward understanding the need for targeted programs addressing child well-being among the refugee population, we analyze, in particular, the Turkey Demographic and Health Survey (TDHS). The TDHS is one of few data sets providing representative data on health and nutrition for a large refugee and native population. We find no evidence of a difference in infant or child mortality between refugee children born in Turkey and native children. However, refugee infants born in Turkey have lower birthweight and ageadjusted weight and height than native infants. When we account for a rich set of birth and socioeconomic characteristics that display substantial differences between natives and refugees, the gaps in birthweight and age-adjusted height persist, but the gap in age-adjusted weight disappears. Although refugee infants close the weight gap at the mean over time, the gap at the lower end of the distribution persists. The rich set of covariates we use explains about 35% of the baseline difference in birthweight and more than half of the baseline difference in current height. However, even after that, refugee infants' average birthweight is 0.17 standard deviations (sd) lower and their current height is 0.23 sd lower. These gaps are even larger for refugee infants born prior to migrating to Turkey, suggesting that remaining deficits reflect conditions in the source country prior to migration rather than deficits in access to maternal and child health services within Turkey. |
| Keywords: | Syrian refugees, birthweight, anthropometric measures, forced displacement, Turkey |
| JEL: | J61 O15 F22 R23 R58 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15819&r=ara |
| By: | Mohamed Ali Marouani; Caroline Krafft; Ava LaPlante; Ilhaan Omar; Ruby Cheung; Sarah Wahby |
| Abstract: | Morocco adopted a very stringent lockdown regime relative to other parts of the developing world in response to COVID-19 outbreak, as we show below. The lockdown may have helped initially limit the spread of the virus but could not be maintained for very long due to its a high social and economic costs. Loosening the lockdown was followed by a major resurgence of the pandemic in the summer and fall of 2020, which was eventually brought under control following further lockdown measures. These measures and a relatively successful early vaccination campaign worked to limit the spread of the virus until the advent of the delta variant that resulted in an even larger resurgence in cases and deaths in mid-2021 than the previous fall’s peak. Morocco’s economy suffered a severe blow due to the lockdown and other disruptions caused by the pandemic. After having grown at an annual rate of 2.5 per cent in 2019, Morocco’s GDP shrank by 6.3 per cent in 2020 (Haut-Commissariat au Plan, 2021; Krafft, Assaad, & Marouani, 2021). The most severely affected sectors were “hotels and restaurants”, which contracted by almost 91 per cent in the second quarter of the year relative to the same quarter a year earlier, and “transport”, which shrank by 60 per cent in the same time period (Haut-Commissariat au Plan, 2021). Morocco’s contraction was larger than the average for the Middle East and North Africa (MENA) and world economy as a whole (World Bank, 2021). As well as its reliance on tourism, Morocco was particularly exposed to global value chains, including a manufacturing sector and exports to Europe that were affected by severe recessions there (World Bank, 2021). There was a slight recovery in GDP in the third and fourth quarters of 2020, but most sectors’ growth remained negative relative to the same quarters in the previous year (Haut-Commissariat au Plan, 2021; Krafft, Assaad, & Marouani, 2021). The government of Morocco adopted a series of economic support policies to alleviate the effects of the crisis on firms and individuals. Early in the pandemic it created a special response fund equal to about 3 per cent of GDP (World Bank, 2021) and undertook a number of measures to ease the burden on firms by postponing tax payments, social insurance contributions and loan instalments (World Bank, 2020a, 2020b, 2021). It also eased monetary policies and bank reserve requirements and established new credit facilities for firms and expanded existing ones to the tune of about 11 per cent of GDP (World Bank, 2020a). Individuals also received economic support in the form of soft loans to self-employed workers with year-long grace periods, suspension of loan and mortgage repayments, and delays in income tax payments (IMF, 2021). Social support programs included assistance to formally employed workers who incurred income losses due to the lockdown through the social security system (Abouzzohour, 2020). Assistance to informally employed workers was channelled to workers whose households were registered with RAMED, the subsidized health care program for poor and vulnerable families (IMF, 2021). For those not registered in this program, an online platform was created to facilitate their registration for the assistance program. However, much of these assistance programs were limited to the period between April and June 2020 (IMF, 2021). |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:sprr20222&r=ara |
| By: | Shantayanan Devarajan (Georgetown University) |
| Abstract: | The civil wars in Libya, Syria and Yemen arose from the Arab Spring that, in turn, was triggered by a broken social contract. In the old social contract, the state would provide free health and education, subsidized food and fuel, and jobs in the public sector, in return for which citizens would keep their voices low, despite widespread cronyism and corruption. By the 2000s, the state could no longer provide jobs, so the citizens took to the streets in protest. In Libya, Syria and Yemen, the aftermath was civil war that has lasted over a decade. When these wars end, the post-conflict reconstruction strategy should be geared towards a new social contract so as not to recreate the conditions for the resumption of conflict. Yet, the experience with postconflict reconstruction in MENA and elsewhere has been to reproduce the old social contract, where the centralized state commands all the resources and the citizens are passive recipients of its largesse. The new reconstruction strategy should be one where the citizens hold the state accountable, rather than the other way around. In practice, this means having education and health services managed by communities; private goods such as food and fuel sold at market prices; and fiscal resources transferred to households so that they can decide what to buy, where to live, and what services to demand from the state. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1581&r=ara |
| By: | Aysegul Kayaoglu (Istanbul Technical University); Zeynep Sahin Mencutek (Bonn International Centre for Conflict Studies); Ching-An Chang (National Chengchi University) |
| Abstract: | Refugee entrepreneurship is key to promoting self-reliance and resilience among refugees. It ensures a smoother transition from humanitarian to development programs, so it is considered mutually beneficial for the refugees, their hosts, and the overall humanitarian-development aid sector. Its success, however, relies on the development of multidimensional resilience strategies since refugee entrepreneurship is a complex phenomenon related to capabilities and structures for integration. Little is known about the resilience strategies of urban refugee entrepreneurs in the face of legal, economic, and sociocultural challenges; therefore, they should be addressed. Studying the case of Syrian refugees in Turkey, we show that urban refugee entrepreneurs are heterogenous and their resilience strategies depend on factors such as the size of their businesses, sectoral dynamics, access to financial markets, trade options, social acceptance in the host society, local economic structure, and costs of production. Our empirical analysis shows that they navigate these challenges by adopting certain strategies according to their capabilities. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1601&r=ara |
| By: | Katarzyna W. Sidlo (Center for Social and Economic Research) |
| Abstract: | The present paper provides the conceptual framework for the analysis of relationship between economic interdependence and conflict prevention, management, and solving. It starts by providing an overview of arguments of two main schools of thought that have been in debate over relationship between the two variables: the liberals, arguing for the pacifying effects of economic interdependence, and the realists, according to whom as interdependence between countries increases, so does the threat to their autonomy and national security, and thus likelihood of a conflict. It subsequently explores research focused on the question of conditionality of the relationship between the economic interdependence (usually operationalized in terms of trade exchange) and conflict: the impact of the type of political regime, (a)symmetry of relationship between economic partners, multilateralism, and trade agreements on the strength (and indeed outcome) on the interdependence-peace nexus. Further, analytical papers focused specifically on the countries in the Middle East and North Africa are reviewed. Finally, the paper examines specific aspects of the MENA region, focusing on factors flagged in the literature investigated as having a potential impact on the strength (or otherwise) of the pacifying effect of the economic interdependence. It concludes with summary of the findings from the literature review conducted, highlighting new variables such as potential trade wars or the ongoing Covid-19 pandemic, that might have to be taken into consideration in future research |
| Date: | 2021–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1483&r=ara |
| By: | Vladimir Hlasny (UN ESCWA); Shireen AlAzzawi (Santa Clara University) |
| Abstract: | This study estimates the impacts of the evolving COVID crisis on the trends in workers’ employment outcomes in Egypt and Jordan. Using panel microdata from ERF COVID-19 MENA Monitors, waves 1–5 (July ‘20–September ‘21), we estimate logit models of workers’ job loss, and multinomial logits of workers’ employment statuses. We confirm that the COVID regime stringency affects negatively employment and labor participation of most groups of workers – particularly youths, even if they were not disadvantaged pre-COVID. Higher education is associated with the retention of a better employment status, conferring consistently high returns in terms of remaining economically active, employed, and in formal employment. Workers’ preCOVID employment status affects their outcomes amid COVID, implying strong employmentstatus dependence. Those laid off amid COVID come predominantly from among those without (formal) employment pre-pandemic. Between mid-2020 and mid-2021, men’s employment prospects gradually improved, but women faced a stagnation by being largely excluded from work opportunities. Youths trailed non-youths early during the pandemic, but have caught up during recovery. In sum, evidence suggests that youths and women are affected more adversely than nonyouths and men at the height of the pandemic, face higher risks of getting laid off, and have a harder time returning to work – supporting the ‘last in’ if not the ‘first out’ hypothesis. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1566&r=ara |
| By: | Caroline Krafft (Corresponding author. St. Catherine University, St. Paul, MN, USA); Irene Selwaness (Cairo University, Cairo, Egypt); Maia Sieverding (American University of Beirut, Beirut, Lebanon) |
| Abstract: | The COVID-19 pandemic has been accompanied by widespread child care and school closures.Emerging evidence – primarily from high-income countries – suggests that these changes have disproportionately increased women’s time in unpaid care, which may be a particular challenge for women who have to balance these increased care needs with paid employment. This paper uses the waves of the ERF COVID-19 Middle East and North Africa (MENA) Monitor phone surveys in five countries to examine how MENA women’s unpaid care responsibilities have changed during the pandemic and how the impacts of the pandemic on their employment depend on care responsibilities and type of employment. Several research questions are addressed: (1) How has the COVID-19 pandemic, and particularly the closure of schools and nurseries, impacted women’s time spent in care work? (2) How are exits from employment related to care responsibilities?; and (3) How do changes in employment vary by pre-pandemic type of employment? The webinars, reports and papers are supported by the project “Advancing the Decent Work Agenda in North Africa (ADWA’)”, implemented by the International Labour Organization (ILO) and the Swedish International Development Cooperation Agency (Sida). The project aims to promote job-rich growth, International Labour Standards (ILS) and their application at the enterprise level. It works at the policymaking level in order to support evidence-based decisions on key dimensions of the Decent Work Agenda. This project was made possible by the generous contributions of the International Labor Organization (ILO), Agence Française de Développement (AFD), The Foreign Commonwealth and Development Office (FCDO) of the Government of the United Kingdom, the World Bank and the Arab Fund for Social and Economic Development (AFESD). |
| Date: | 2022–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:swp20225&r=ara |
| By: | Mahmoud Sami Nabi (University of Carthage, LEGI-Tunisia Polytechnic School and FSEG Nabeul, Tunisia) |
| Abstract: | The macroeconomic fundamentals of the Tunisian economy deteriorated seriously after the 2011’s revolution. The objective of this paper is to assess to which extent it was possible for Tunisia to realize better macroeconomic performance through alternative economic policy choices taking into account the domestic and external shocks. To that end, the paper employs a financial dynamic general equilibrium model calibrated using six flow-of-funds accounts representing the Tunisian economy in 2010. In a first stage, I reproduce the main macroeconomic variables observed for the Tunisian economy during the period 2011-2018. In a second stage, the model is used to compare the Tunisian macroeconomic performance during that period with counterfactual scenarios. The results show that the economy would have performed much better, in relation to a battery of macroeconomic indicators (economic growth, unemployment, public external and domestic debts, current account, fiscal balance) under alternative economic policies, given the same conditions of internal and external shocks. The most impactful results are obtained under the scenario a total factor productivity’s growth at its average level during 2001-2010. Indeed, the average yearly gain in terms of GDP growth would have been of 3.45 percentage points and the average unemployment rate reduced by 7 percentage points to reach 9%. The domestic and external domestic debt stock would have been much lower than the actual average, by reaching respectively 16.3% and 18% of the GDP. |
| Date: | 2021–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1473&r=ara |
| By: | Ghada Barsoum (The American University in Cairo); Mahdi Majbouri (Babson College) |
| Abstract: | In 2020, a global pandemic and its ripple effects swept through the world and disrupted every economy worldwide. We study the effect of this pandemic on employment, care work, and subjective wellbeing (SWB), particularly for women, in four countries in one of the most understudied regions, the Middle East and North Africa (MENA). We find that although employmentto-population ratios had an initial dip in the pandemic, they rose to pre-pandemic levels by February 2021. We, however, find that unemployment-to-population ratios for women rose during the pandemic and reached to two to three times their levels before the pandemic. We also find that about 40% of women reported a rise in their hours spent on childcare and housework during the pandemic. Finally, we find that controlling for individual characteristics and geographic-time fixed effectgs, the main factor associated with the SWB was the decline in household income. Men and women’s SWB in households that experienced a reduction in their income declined by 0.26 and 0.14 standard deviation, respectively. Increase in the time spent on housework was the second factor affecting women’s SWB. All other factors had no association with SWB. The implications of the results are discussed. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1528&r=ara |
| By: | Jasmin Fouad (American University in Cairo); Moheb Said (Economic Research Forum); Wesam Sherif (AUC); Chahir Zaki (Cairo University) |
| Abstract: | A public development bank (PDB), like any other bank, serves as a financial intermediary, but with a strong developmental role. This paper provides an overview of PDBs in Egypt. The latter is of particular interest for two reasons. First, while PDBs have a long history in the Egyptian economy, their roles and interventions are rather limited. This applies to banks that were created during the socialist era of Former Egyptian President Gamal Abdel Nasser. Second, the largest share of PDB-related projects implemented in Egypt is undertaken by government-owned commercial banks, namely the National Bank of Egypt, Banque Misr, and Banque du Caire. Thus, the objective of this paper is twofold: first, to analyze how and why the role of PDBs can be played by public banks; and second, to highlight the lessons that can be learned from the resilience of the Egyptian financial systems to the succession of crises/disruptions. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1594&r=ara |
| By: | Courtney Geary; Asma Ben Hassen (Global Fairness Initiative (GFI)); Arbia Saleh; Ahmad Awad |
| Abstract: | In the Arab region, social protection systems have historically suffered from several shortcomings, including high degrees of fragmentation, low coverage rates, and financial unsustainability. However, both Jordan and Tunisia have committed in recent years to expanding and reforming social protection systems. While civil society has the potential to positively influence the development of social protection policies in both countries, social dialogue has historically been suppressed. This paper seeks to examine the current context of social protection policy generation in both countries, providing an comparative examination of the historical roles that social dialogue has played in the formation of social protection policies and analyzing how periods of restricted public freedoms and tightening of civic space has limited civic participation in policy formation. The paper also provides a comparative analysis of the current social dialogue mechanisms and public freedoms in both countries, and in particular shifts which have occurred post-2011. By doing so, this paper highlights the role that civil society has played in the creation of recent social protection reforms, as well as identifies the significant challenges to civic participation in policy development which remain in both nations |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1591&r=ara |
| By: | Joris Jourdain (International Organization for Migration); Elizabeth Griesmer; Raffaele Bertini; Lorenza Rossi |
| Abstract: | The 2019 coronavirus (COVID-19) pandemic and its associated containment measures have impacted numerous dimensions of the lives of migrants, including their health, education, livelihoods and economic security, social cohesion, and mobility. As part of the International Organization for Migration’s (IOM) efforts to draw attention to the adverse consequences of the pandemic for migrants in the Middle East and North Africa (MENA) region, this study focuses on international migrants (mainly from Ethiopia and Eritrea) living in the states of Kassala and Gedaref in Sudan. To differentiate between various forms of mobility between countries of origin and Sudan, this report disaggregates the impact of the pandemic across three categories of migrants: 1) long-term migrants in Sudan, 2) migrants in transit who seek to settle in a third country other than Sudan, and 3) seasonal migrant workers whose stay in Sudan is temporary and who migrate between Sudan and their country of origin regularly. The study primarily examines the socio-economic outcomes of migrants living in Kassala and Gedaref, regardless of their reason for coming to Sudan. The research team conducted qualitative interviews with 30 key informants and collected quantitative information from 937 respondents using a household survey. The questions posed to key informants and migrants considered the multidimensional consequences of the COVID-19 pandemic along six pillars, as adapted from the United Nations’ Sustainable Development Group’s (UNSDG) framework for evaluating the immediate socio-economic impact of the health emergency: 1) Health, 2) Protection and access to basic services, 3) Economic response and recovery, 4) Macroeconomic response and multilateral collaboration, 5) Social cohesion and community resilience, and 6) Mobility (2020). Key findings of the paper are summarized under these six pillars |
| Date: | 2022–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1553&r=ara |
| By: | Emre Yüksel; Hüseyin Ikizler (OSTIM Technical University); Ali Emre Mutlu (RT Presidency of Strategy and Budget) |
| Abstract: | Like many MENA countries, the factors leading to climate change in Turkey have drastically escalated in the last two decades. This paper mainly focuses on the issue of ensuring food security. We aim to examine the significance of climate shocks in Turkey's food prices. The unique structures of this paper are threefold: First, we define climate shocks as persistent deviations from the long-term mean in a region regarding temperature and precipitation due to climate change; second, controlling for possible shocks, we examine the role of climate change in food price processes; and third, we examine the causal effect of food price on per capita food expenditure based on the demand equation. We find the most prominent climate change effect on prices of bread and cereals, and other food products. The estimates of the second phase of the analysis suggest that both price and the wealth effects on food consumption increase more in regions where climate change exists than in regions with no significant change in climate figures. However, we do not observe significant differences in the wealth effect on non-food consumption among the regions. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1516&r=ara |
| By: | Sevil Acar (Bogaziçi University Hisar Campus Sariyer Istanbu); Ahmet Atil Asici (Istanbul Technical University); A. Erinç Yeldan (Kadir Has University) |
| Abstract: | In December 2019, the European Union (EU) announced the European Green Deal (EGD) to create a climate-neutral continent by 2050. Accordingly, the EU Emission Trading System (ETS) will be revised to maintain economic growth against possible losses in competitiveness, leading to “carbon leakage.” The Carbon Border Adjustment (CBA) is one of the mechanisms proposed to tackle the carbon leakage problem; it is an import fee levied by the carbon-taxing region (in this case, the EU) on goods manufactured in non-carbon-taxing countries (in this case, Turkey). The purpose of this paper is to provide a first-order estimate of the potential sectoral impacts of the CBA on the Turkish economy by employing input-output methodology. Our results suggest that the CBA may bring a carbon bill of EUR 1.1-1.8 billion to Turkish exporters in the EU market. The revision of the Intended Nationally Determined Contributions (INDC) target and the ratification of the Paris Climate Agreement at the parliament are two steps that can be taken immediately. Speeding up the ongoing preparatory process of instituting an Emission Trading System (ETS) in Turkey (preferably linked to the ETS), will help minimize economic losses. |
| Date: | 2021–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1500&r=ara |
| By: | Amira El-Shal (Cairo University); Eman Moustafa (African Export-Import Bank) |
| Abstract: | This study investigates what predicts the uptake of preventive health behaviour (PHB) during COVID-19, bringing to the fore economic and psychological determinants. We provide novel evidence that through affecting psychological well-being, economic well-being can affect PHB. Exploiting a panel survey dataset of four North African countries for November 2020–August 2021, we construct a psychological well-being index and develop a structural equation model that addresses endogeneity in the PHB, economic and psychological well-being, and COVID-19 risk perception relationships. Our estimates reveal vast heterogeneity in individual responses to different PHB determinants across countries and by behaviour type. Psychological well-being had the strongest positive effect on the likelihood of physical distancing in Egypt and Sudan and of wearing masks in Morocco, Sudan, and Tunisia. Psychological well-being in turn was negatively affected by decreased food consumption and higher economic anxiety in all four countries. Psychological well-being was also lower for unpaid family workers in Egypt and Sudan and the unemployed in Egypt, Morocco, and Tunisia. Handwashing, a less publicly visible practice, was directly related to the perceived risk of COVID-19 and neighbourhood compliance. Gender, age, and education effects varied across countries and by PHB type. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1568&r=ara |
| By: | Mouez Fodha (Paris School of Economics); Djamel Kirat (University of Orléans); Chahir Zaki (Cairo University and Economic Research Forum) |
| Abstract: | The objective of this paper is to examine how financial markets are affected by climate and energy transition risks. Our contribution is thus twofold. First, relying on the overlapping generations’ model, we develop a simple theoretical model by taking into account the interplay between environmental quality and assets market. We show that when agents are sensitive to the environmental quality, they take decisions about savings and investment in line with the need for higher environmental protection. Second, we empirically test this model by assessing the nature and magnitude of the climate and energy transition determinants of the risk premium associated with public debt, with a focus on countries of the Middle East and North Africa (MENA) region, being one of the most abundant regions in natural resources. Our main findings show that fossil fuel subsoil wealth is associated to a higher risk premium. Moreover, this risk increases also with a higher level of CO2 emissions per capita or lower level of environmental performance index (EPI). This confirms how financial markets are accounting for climate and energy-transition risks. We also show that the quality of institutions plays an important role in counterbalancing the effects of climate-related variables on the risk premium. Finally, we conclude that financial markets could foster energy transition and encourage the implementation of effective environmental policies. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1526&r=ara |
| By: | Rana Hendy (The American University in Cairo); Nejla Ben Mimoune (Brookings Doha Center) |
| Abstract: | Using data from the Household Expenditure and Income Surveys (HIES), we examine the status of inequality of opportunity in education in Jordan at different points in time. Through our analysis, we track the changes in trends in inequality of opportunity of education and decompose inequality into the contributions of different circumstances using the Shapley decomposition. We find that inequality in education opportunities at the completed primary level for youth is still high. As for secondary completion rates, wide inequality gaps have persisted between 2008 and 2013, but then sharply fell in 2017. In addition, similar to other Arab countries, inequality of opportunities at the above secondary level has worsened over time. When investigating the main factors driving such inequalities, we find that family wealth is among the most important determinant for the opportunity of attending or completing an educational level over time, followed by the parents’ level of education, more specifically the mother’s. |
| Date: | 2021–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1480&r=ara |
| By: | Eleftherios Giovanis (Izmir Bakircay University); Oznur Ozdamar (Izmir Bakircay University) |
| Abstract: | As a response to the outbreak of the COVID-19 pandemic, governments around the globe have carried on strict lockdown measures affecting millions of jobs, public life, and the well-being of people. This study aims to examine the subjective well-being (SWB) of people, such as the perception of the economic situation and mental well-being, who made adjustments to cope with the earning losses. We estimate the well-being costs, which is the money required to compensate people because of the reduction in earnings or employment loss and the coping strategy followed, to bring their well-being at the levels of those who have not adopted any coping strategy. We examine two outcomes; the perception of the economic situation and a mental well-being index. We employ data from the ERF COVID-19 MENA Monitor Surveys for Egypt, Jordan, Morocco and Tunisia. The results show that coping strategies with the earning losses have a significant detrimental impact on well-being and are associated with significant costs. In most cases, the coping strategies of borrowing from banks or a private lender and selling assets present the highest well-being costs. Furthermore, the estimates highlight significant discrepancies across gender and types of workers, such as those employed in the informal sector and temporary contracts. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1521&r=ara |
| By: | Philippe Adair (University Paris-Est Créteil); Vladimir Hlasny (United Nations Economic and Social Commission for Western Asia); Mariem Omrani (UNDP); Kareem Sharabi Rosshandler (The Economic Growth Pillar, West Asia-North Africa Institute) |
| Abstract: | First, youth inactivity, unemployment and informal employment are pervasive in the MENA labour markets. Using microdata from Labor Market Panel Surveys, and ERF COVID-19 MENA Monitors for six MENA countries, workers’ employment statuses are assessed separately by age group and gender. Second, the social and solidarity economy (SSE) includes both for profit and non-profit entities, cooperatives, associations and mutual. Their legal frameworks and economic impact, especially in terms of employment and GDP contribution are surveyed. Third, personal savings and grants remain the major funding sources of SSEs, which face structural deficiencies in the banking system and lack tailored financial products that the microfinance industry should overcome. Four, formalisation policies encapsulate distinct strategies, targets and impact assessment, wherein which the SSE including microfinance institutions plays a role in formalising both informal businesses and employees, as well as triggering job creation. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1604&r=ara |
| By: | Ragui Assaad (Humphrey School of Public Affairs in the University of Minnesota); Alma Boustati; Vishal Jamkar |
| Abstract: | We examine in this paper the determinants of access to transfers in the context of the Syrian refugee influx to Jordan, and, in particular, whether vulnerable refugees based on a multidimensional poverty index, have access to different kinds of transfers. We use a publiclyaccessible, nationally-representative dataset that includes both registered and unregistered refugees to assess the adequacy of targeting of transfers. We analyze access to cash assistance and food vouchers as a function of refugee characteristics separately for those residing in camps and in host communities to identify different patterns of access across the two settings. Our findings indicate that transfers appear to be well-targeted to some vulnerable households in both settings including those with disabled members, those with a higher ratio of children among their members, and those with no workers. However, other markers of vulnerability, such as having an older household head, a high proportion of elderly members, or no educated members in the household, appear to be associated with reduced access to transfers. As a result, 37 percent of multidimensional poor households in both settings do not have access to any transfers. Outside the camp setting, these markers of vulnerability are also associated with a lack of registration, which is itself a major barrier to accessing transfers. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1561&r=ara |
| By: | Caroline Krafft (Saint Catherine University, Saint Paul, Minnesota, USA); Cyrine Hannafi (University Paris-Est Créteil, France) |
| Abstract: | Countries around the world are working to develop social protection floors to help reduce poverty. Ensuring workers can earn adequate wages is an important component of social protection floors. In this paper, we explore who receives minimum, poverty, median, and living wages in Jordan and Tunisia, as well as estimating the wage gaps between what workers earn and these wages. We demonstrate that while the majority of workers do earn at least minimum and poverty wages, only a minority of workers earn a living wage. The chances of earning minimum, poverty, median, and living wages depend on the characteristics of workplaces, specific work characteristics (especially job formality and skills required), and the demographic characteristics of workers. These findings highlight which workers are vulnerable to low earnings and where greater enforcement of minimum wage legislation might be needed. Furthermore, we use our results to simulate a number of social protection floor policy options, from universal basic income to more targeted transfers. We demonstrate that most of these policies are not fiscally viable; they would require far more social assistance spending than is currently undertaken in Jordan and Tunisia. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1557&r=ara |
| By: | Khalid Sekkat (University of Brussels) |
| Abstract: | The paper investigates to what extent the intra-MENA political tensions adversely affect intraregional trade (IRT). While traditional economic and political science literature focus on trade and wars, the paper considers other expressions of political tensions. In addition to inter-state wars, countries impose sanctions on financial collaboration, military collaboration, travel freedom, commercial relationships and diplomatic arrangements. The sanctions can be combined and simultaneous is order to achieve the highest impact. The analysis applies the gravity approach and the Pseudo-Poisson Maximum Likelihood estimator (PPML) to bilateral trade between the 18 MENA countries and 128 of their partners over the period 1971-2014. The results are that only commercial sanctions and inter-state wars are significant. They are negative meaning that they harm IRT. |
| Date: | 2021–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1475&r=ara |
| By: | Racha Ramadan (Cairo University) |
| Abstract: | The COVID-19 pandemic is a global crisis that has added additional challenges and burdens on households, workers and governments. Using the COVID-19 MENA Monitor Household Survey, conducted by the Economic Research Forum, the present paper aims to assess the impact of COVID-19 crisis on income in Jordan. Logistic regressions are estimated to examine the impact of the individuals and households’ characteristics on the likelihood of experiencing decline in household’s income. Individuals working in hard hit sectors and vulnerable groups such as youth, women, poor households and those working informally are more likely to lose their income. Other vulnerable groups include individuals working in hard-hit sectors, those who were suspended and individuals whose wage payment had been decreased. These negative drawbacks of the pandemic on income and employment are expected to increase income inequalities in Jordan between the different socio-economic groups. As a response, targeted social protection programs, carefully designed to include vulnerable households experiencing job and income loss during the crisis, are highly required. |
| Date: | 2022–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1546&r=ara |
| By: | Mohamed Ali Marouani; Caroline Krafft; Ragui Assaad; Sydney Kennedy; Ruby Cheung; Ahmed Dhia Latifi; Emilie Wojcieszynski |
| Abstract: | The Tunisian economy can be described as an open economy in terms of its trade openness2, which is high relative to other countries in MENA (World Bank 2021). Tunisia’s trade openness and the large role of services in the economy have contributed to the sizeable pandemic era economic contractions (World Bank 2021). Moreover, the tourism sector, which played a key role in Tunisia’s economy, was the most affected by the pandemic, as well as international trade (World Bank 2020). Moreover, Tunisia experienced substantial political instability leading to the president dismissing the prime minister, suspending parliament, and ruling by decree in late July 2021. Although our data predate these political events, they are important to keep in mind in understanding the policy responses and way forward. The Tunisian economy, which was already in a bad shape in 2019, endured a harsh blow with the pandemic. Tunisian GDP contracted by 8.8 per cent in 2020 after modest growth of 0.9 per cent in 2019. The most affected sectors were “hotels and restaurants”, which contracted by 77.3 per cent in the second quarter of 2020 relative to the same quarter a year earlier, and “transport”, which sank by 51.4 per cent in the same period (Institut National de la Statistique (INS) 2021a; Krafft, Assaad, and Marouani 2021b). There was a slight recovery in the third and fourth quarters of 2020, but most sectors’ growth remained negative relative to the same quarter in the previous year. The government adopted a series of economic support and social protection policies to alleviate the effects of the crisis on firms and households. The emergency response cost 2.6 billion Tunisian dinar (TND), which represents 2.3 per cent of GDP (IMF 2021; Krafft, Assaad, and Marouani 2021c). The response included several measures to ease the burden on firms by postponing tax payments, social insurance contributions and loan reimbursements (IMF 2021; Krafft, Assaad, and Marouani 2021b). In addition, the government introduced a state guarantee for new credit that was extended in the 2021 budget law. The Central Bank also eased monetary policies and the regulatory standards for the banking sector and was allowed by the parliament to directly finance the government budget with TND 2.6 billion (IMF 2021). Several vulnerable groups of people received emergency cash transfers to cope with the crisis. Support relied on regular social protection schemes by targeting households enrolled in the national anti-poverty cash transfer program (PNAFN) and in subsidised health insurance schemes (AMGII) and some received one-off transfers (mainly during the full lockdown period) (Hassen, Marouani, and Wojcieszynski 2021). The Central Bank also postponed household loan payments for three to six months in Spring 2020 in order to support middle-class workers who did not benefit from cash transfers (Hassen, Marouani, and Wojcieszynski 2021). |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:sprr20223&r=ara |
| By: | Ahmed Kchikeche (Mohammed V University); Assil El Mahmah |
| Abstract: | This paper investigates the role of the level and composition of government spending as a determinant of three different aspects of bank performance in 179 banks from the MENA region between 2001 and 2019. To control for the impact of the oil sector on the banking system of some countries in the region, we divide our sample into two groups of banks, depending on whether they are from net oil importers or net oil exporters. The results reflect the inherent heterogeneity of MENA region economies. We find that the determinants of banking performance differ according to the type of spending and the nature of the economy’s reliance on oil. Overall, the results show that government spending affects bank performance and that, in most cases, this impact is significantly negative. We find that current spending has either an insignificant or a negative impact on the investment and leverage efficiency of banks in the MENA region. On the other hand, while capital spending negatively affects lending growth, it has a positive effect on the performance of banks in oil-importing countries. Our findings shed light on the role of the level and composition of government spending on bank performance. Fiscal policy in the MENA region is greatly affected by oil prices and can have unintended effects on the banking sector.. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1555&r=ara |
| By: | Angela C. Lyons (University of Illinois at Urbana-Champaign); Josephine Kass-Hanna (University of Beirut); Alejandro Montoya Castano (University of Illinois at Urbana-Champaign) |
| Abstract: | This study uses vulnerability assessment data collected by the UNHCR, WFP, and UNICEF from Syrian refugees in Lebanon, a country that hosts an estimated 1.5 million refugees from neighboring Syria and the highest per capita proportion of refugees in the world. The data are used to construct a multidimensional livelihood index (MLI) to identify refugee households who are currently poor. The MLI is then used to assess households’ vulnerability to future poverty using a 3-stage Feasible Generalized Least Squares (FGLS) model. Our findings support the view that poverty is a dynamic phenomenon and not a static condition. The analysis allows us to identify more clearly which households and geographical locations are more vulnerable to experiencing prolonged poverty. This study is among the first to adapt the multidimensional poverty framework to the context of protracted forced displacement. It does this using a forward-looking approach to identify who, where, and how to target humanitarian assistance and development interventions more optimally, to prevent rather than simply alleviate immediate poverty |
| Date: | 2021–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1472&r=ara |
| By: | Mohammad Reza Farzanegan (Philipps-Universität Marburg); Reza Zamani (Allameh Tabataba'i University) |
| Abstract: | We study the effect of a corruption reflection index on internal conflict in Iran using a novel measure of corruption based on newspaper coverage. We use the Vector Autoregression (VAR) model and its applied tools of impulse response and variance decomposition analyses to track the response of protests to shocks in corruption levels. Using annual data from 1962 to 2019, we find a positive and significant response of protests to a positive shock in the news-based corruption reflection index. We also show that economic growth and military spending are the main channels where higher corruption may lead to higher internal protests. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1606&r=ara |
| By: | Hakan Ercan (Middle East Technical University); Ahmet Ozturk (Statistical, Economic, and Social Research and Training Centre for Islamic Countries (SESRIC)); Semih Tumen (TED University) |
| Abstract: | Improving the later outcomes of children through increasing their school attainment is a key policy priority in developing countries; yet, whether increasing government spending can improve school attainment is still an issue of debate. In this paper, we investigate the effect of a massive primary school construction program—which was launched as part of the 1997 schooling reform—on high school completion and labor force participation rates in Turkey. With this program, Turkey increased the number of primary education classrooms approximately by 31 percent from 1998 to 2002. Using the 2011 Population and Housing Census, we employ an identification strategy based on provincial differences in the intensity of construction program and the variation in exposure across birth cohorts induced by the timing of the program. The estimates suggest that the construction program increased high school completion rates by 2.1-2.4 percentage points for men and by 2.3-2.5 percentage points for women. While the program had no significant effect on male labor force participation, it led to a 2.2-2.6 percentage-point rise in female labor force participation. These findings suggest that the program has been effective in reducing the gender gaps in later outcomes. The results suggest that increasing primary school availability helps reducing gender gaps in later outcomes in a developing country context. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1522&r=ara |
| By: | Ozan Bakis (Bahçesehir University); Sezgin Polat (Galatasaray University) |
| Abstract: | This study aims to examine the evolution of wage inequality in Turkey between 2002 and 2019 using Household Labor Force Surveys. We find a significant decline in wage inequality over the period analyzed, which can be explained by a combination of (i) minimum wage hikes (2004 and 2016), (ii) a stable aggregate demand curve, and (iii) relative stagnation of post-secondary graduate wages. The two minimum wage hikes led to real gains that were preserved over the years for lower wage earners and reduced the wage gap between upper and lower percentiles. The decomposition analysis based on DiNardo et al. (1996) shows that minimum wage hikes had a strong wage (price) effect over the wage distribution. This impact even spilled over for wage earners above the minimum wage. We argue that minimum wage adjustments replace the role of central wage bargaining in an emerging economy with many low qualified jobs and almost no labor market institutions. The stagnating real wages for the upper deciles contributed further to the reduction in inequality in recent years. |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1509&r=ara |
| By: | Sami Mahroum (Solvay Brussels School of Economics and Management) |
| Abstract: | MENA countries display serious weaknesses in their ability to benefit from the adoption of digital trade and e-commerce. As these countries trade primarily in fossil fuel and other natural resources, they are less affected by the advantages of digital trade. MENA countries are poorly integrated in global value chains as they produce few intermediate products that they export to other countries. While consumers are adopting digital commerce quickly, the productive sector is not keeping pace. This has the implication of haemorrhaging consumers’ surplus for the benefit of sellers overseas. There are some exceptions where the opportunities such as in transport and tourism where digital trade have had a positive impact on local economies. Overall, the indications to date that the extent to which digitalisation will have a positive impact on the economies in the region will be limited to a small list of economic activities and confined to a small set of countries, mostly the GCC countries |
| Date: | 2021–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1487&r=ara |
| By: | ERF; FDL |
| Abstract: | In the chaotic global post-COVID-19 economy, with the ongoing war in Ukraine, the challenge of adjusting to the global stagflation that is engulfing the world is particularly hard for the oil importing countries of the Middle East and North Africa (MENA) region. A regional commission of experts, working under the auspices of the Economic Research Forum (ERF), and the Finance for Development Lab (FDL), was asked to evaluate the macro-economic risks ahead, and to make recommendations on the best course correction to avoid them. After an elaborate process of analysis, consultation, and deliberation, the Commission came up with four sets of recommendations, which are developed in this report: First, the recent macroeconomic shock waves are making an already weak economic situation catastrophic. Public debts are rising fast towards unsustainable levels. The challenge ahead is stark: inaction would lead to a financial crisis; but austerity alone could stabilize debt only in the very short term and at the cost of high social tensions. Economic growth is already falling, poverty rising, and the middle-class further weakened, all threatening a rise of social unrest. Failing to develop a convincing response raises the threat of a vicious cycle of economic, social, and political declines, including a retreat into populism, and destructive social polarization. Second, the immediate debt challenge forces countries to adopt painful decisions. While some reduction in government expenditure is unavoidable, much of the political capital invested in adjusting to high indebtedness should go towards improving growth prospects. Public expenditure should be reoriented to safety nets and pro-growth spending. Debt restructuring can only go so far, and countries should not expect too much from it. IMF support will be necessary. It needs to be more generous, but it also need to be made conditional on launching credible national revival strategies, as opposed to the austerity-only based approaches of the past. Third, a pro-growth macroeconomic framework is necessary to ignite growth. But it is not sufficient. In order to achieve a shift in expectation, structural reforms are needed. The reform agenda not only includes the “old” challenges of improving growth prospects and modernizing the state, it should also address the new challenges of relocalization and climate change. On all these fronts, the medium-term reform agenda needs to be initiated in credible ways to create a major expectation shock that can affect the short term - to encourage the private sector into initiate a supply response, and to encourage citizens to start buildin social trust. The fourth recommendation is to recognize that economic reforms are eminently political exercises that need to mobilize the political elites to work. The latter need to believe that the risks ahead are catastrophic, but that a better future is possible, and to convey these messages to the citizens with brutal honesty. Politically, they need to organize an open dialogue with the private sector and civil society to find new mutually beneficial arrangements - political, social, and economic - that can unlock the countries’ true potential. A gradual process if it starts in earnest is possible - improved trust in institutions and confidence about the future will support collective action and generate a virtuous process of progress on all fronts. In addition, there are enormous new opportunities to expand regional and global cooperation that can and should be mobilized in support of reformist national programs. |
| Date: | 2022–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:prr43&r=ara |
| By: | Shahid Yusuf (Chief Economist, Growth Dialogue, George Washington University) |
| Abstract: | The focus of this paper is on whether and how digital technologies could lead to a change in inequality over the course of the next decade. The paper is divided into five sections. Section 1 reviews the literature on the international experience with the diffusion of digital technology and trends in key macroeconomic variables, in particular: productivity, the displacement of labor, the worldwide trend in inequality, and how this affects growth. Much of the research is on advanced countries. Nevertheless, it can provide a window into the likely medium- and longer-term trends in Arab countries where digitalization advances. Section 2 examines the spread of digital technology in Arab countries and the impact of digitalization on inequality. As there is considerable heterogeneity among Arab countries, the section differentiates countries according to their capacity for absorbing digital technology. The potential impact of digital technology on jobs and wages in Arab countries and some comparators is tackled in section 3. Section 4 assesses the actual impact on inequality in the recent past and what is probable over the longer term. Section 5 presents suggestions on how Arab countries could maximize the gains from the new technology and cushion the effect on jobs and inequality. Finally, section 6 concludes. |
| Date: | 2021–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1486&r=ara |
| By: | Bjorn Nilsson |
| Abstract: | I contribute to the study of wage determination in the MENA region by studying the union wage gap in Egypt, a country where union activity has been highly controlled and centralized since independence. Despite reports of a dysfunctional union landscape, our findings point to a positive and significant union wage gap, comprised between 0.05 and 0.2 log-wages and robust to several alternative specifications. The data does not allow us to reject the null hypothesis of an identical gap between the public and private sectors, and shows positive wage gaps across educational levels, firm sizes and economic activities. Given the centralized and regime-controlled character of labor’s organization in Egypt as documented by the broader social sciences, this finding comes as a surprise. Investigating other frequent outcomes of union activity in the second part of the paper, I find no links neither between unionization and compressed wage distributions at the sectoral level, nor between unionization levels and decreasing profits at the firm level. The positive union wage gap is thus unlikely to stem from traditional union activity per se, and suggests careful interpretation of union wage gaps in settings where labor organization is restricted. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1529&r=ara |
| By: | Yusuf Emre Akgunduz (Sabanci University); Seyit Mumin Cilasun (Central Bank of the Republic of Turkey); H. Ozlem Dursun-de Neef (Goethe University Frankfurt); Yavuz Selim Hacihasanoglu (Central Bank of the Republic of Turkey); Ibrahim Yarba (Central Bank of the Republic of Turkey) |
| Abstract: | This paper exploits the COVID-19 pandemic as a negative shock on firm revenues and studies the transmission of this shock across industries via banks. We use the exante heterogeneity in the amount of loans issued to affected industries to measure the variation in banks' exposure to the negative shock. Using bank-_rm level credit register data from Turkey, we show that banks transmitted the shock by decreasing their loan supply not only to affected but also to unaffected industries. The effect persists at the firm level, yet lower for large firms and for firms with an existing relationship to state-owned banks. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1577&r=ara |
| By: | Mohamed Ali Marouani; Caroline Krafft; Ragui Assaad; Sydney Kennedy; Ruby Cheung; Sarah Wahby |
| Abstract: | The first case of COVID-19 in Egypt was confirmed on February 14th, 2020 (IMF, 2021a). On March 24th, the government declared a public health emergency followed by a nationwide lockdown aiming to contain the spread of the virus. Among the lockdown measures, the government implemented a two-week curfew (Beschel, 2021), which was later extended to a month (Reuters, 2020).2The curfew applied from 7 PM to 6 AM, during which time all public and private transport was suspended. All educational institutions were shut down until further notice. Shops and malls were closed on weekends and restaurants and coffeeshops were only open for home delivery. Public events such as government meetings and sports events were restricted, a stay-at-home order was imposed with exceptions for essential trips, restrictions on internal movements were imposed, and a total border closure was instituted (Beschel, 2021). Most businesses remained open, but some of them may have reduced their hours to conform to the curfew. During the initial two weeks of lockdown the government also suspended work on megaprojects which led to a substantial decline in workforce on construction sites. An agreement between the Ministry of Housing and the Egyptian Federation for Construction and Building Contractors (EFCBC) to ensure compliance with sanitation and health guidelines allowed for the resumption of work (Beschel, 2021). As shown in Figure 1, Egypt, like the rest of North Africa, had a higher stringency index than the world average during the first two months of the pandemic. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:sprr20221&r=ara |
| By: | Imed Medhioub (Imam Mohammad Ibn Saud Islamic University); Mustapha Chaffai (University of Sfax) |
| Abstract: | With the global spread of the COVID-19 pandemic, financial markets have experienced instability and high volatility due to increased uncertainty, which, in turn, has led investors to become pessimistic about decisions to buy/sell stocks in the market. Therefore, these pessimistic investors – who are generally the less informed in the market – decide to follow others due to their belief that they are more informed, especially during down market periods. Consequently, a natural question arises: can we confirm that herding behavior during the COVID-19 pandemic occurred due to investor pessimism? In this paper, we investigate the impact of COVID-19 on herding behavior in the MENA region. A comparison before and during the COVID-19 pandemic will be conducted due the increased global uncertainty it has caused. As developed in the financial literature devoted to behavioral finance, events and news can change the behavior and beliefs of investors, which can cause price changes and fluctuations in stock markets. This work studies the effect of investor sentiment on herding behavior in the MENA region in the last decade considering the COVID-19 effect. In fact, it was highlighted in many works (such as Mishra et al., 2021) that during periods of crisis, the sentiment of investors is unstable and they aren’t able to make the right decisions when buying and selling stocks. Therefore, they decide to follow others in the market without relying on their own information. New information can have a big effect on investor sentiment, which, in turn, can have a huge impact on their judgments about future decisions. Good news can make investors optimistic about their future decisions, while bad news can make them pessimistic. Based on the methodology used in Chiang et al. (2010) and by employing a quantile regression analysis for data covering the period 3 January 2011 to 15 July 2021, results show some differences in herding behavior in the Egyptian, Jordanian, Moroccan, and Tunisian stock markets. These different findings on countries and investors' sentiment have important empirical implications since the results suggest different situations of herding, especially between North African and Middle Eastern countries. There is a concordance in the sentiment of investors in both these regions toward herding behavior. Therefore, there is a link between herding behavior and investors' sentiment. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1570&r=ara |
| By: | Leila Baghdadi (University of Tunis); Inmaculada Martínez-Zarzoso; Amal Medini |
| Abstract: | In this paper, we evaluate the pass-through of the COVID-19 shock on international prices and trade policy to consumer prices in Tunisia. Specifically, we evaluate the extent to which changes in import unit values, tariffs, non-tariff measures, and new export restrictions imposed by Tunisia’s partner countries during COVID-19 are transmitted into consumer prices in Tunisia. Using monthly data from January 2018 to December 2020, a pass-through equation is estimated using sectoral panel data at the retail-product level, and we apply linear panel data techniques that account for unobserved heterogeneity in the dimensions of the panel. We augment the empirical specification with factors related to the current macroeconomic environment derived from the COVID-19 outbreak and persistence. The results provide important insights for Tunisian policymakers. |
| Date: | 2022–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1535&r=ara |
| By: | Touhami Abdelkhalek (Université Mohammed VI Polytechnique); Dorothee Boccanfuso (Université Mohammed VI Polytechnique) |
| Abstract: | When researchers and policymakers conduct impact analyses of economic reforms, especially fiscal reforms, the specification of the household demand system becomes crucial. There is a trade-off between demand systems that are simple to manipulate but less realistic, and other systems that are more realistic but are often more complex and difficult to estimate or calibrate. In this paper, we compare the results of two different demand systems: a simple one, the CobbDouglas (CD), and a more complex one, the Constant Difference Elasticity (CDE). We develop a hybrid method of estimation-calibration based on the estimation of the parameters and elasticities of a QUAIDS system and on the calibration of those of the CDE system using a cross-entropy approach. The estimates obtained are introduced into a micro-simulated partial equilibrium model to approximate the impact of the VAT reform on poverty measures in Morocco. We show that when the simulated shocks are moderate, the gain of using a CDE system instead of a CD system is marginal, but when these shocks are stronger, the differences become significant and increase. Therefore, the use of these models can lead to different results when evaluating public policies and their impacts on poverty measures. |
| Date: | 2022–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1541&r=ara |
| By: | Moez Ben Tahar (Faculty of Economics and Management of Sousse, Tunisia); Sarra Ben Slimane; Raja AlMarzoqi |
| Abstract: | This paper deals with fiscal sustainability by estimating fiscal reaction functions (FRF) for a panel of 15 MENA countries over the period 1990-2019. In investigating the question, this paper used various methods including the System General Method of Moments (System GMM), and the common correlated effects mean group (CCEMG) estimator. Our findings reveal that MENA countries are fiscally responsible, as evidenced by the positive and significant response in the primary balance to changes in the lagged debt-to-GDP ratio, and those countries adjust along the expenditure margin. Moreover, we find robust evidence of a nonlinear fiscal policy response to debt accumulation. We also show that the fiscal policy stance tends to be countercyclical, but government spending has a procyclical bias. Further, fiscal authorities in oil-exporting countries respond more strongly to rising debt levels than in net oilimporting countries. |
| Date: | 2022–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1542&r=ara |
| By: | Burhan Can Karahasan (Piri Reis University, Turkey); Mehmet Pinar (Edge Hill University) |
| Abstract: | Global combat with climate change is central to policymaking. However, recent discussions underline the rising disparity of the impact of climate change for countries with different topographic conditions. Motivated by the rising importance of local differences in climatic developments, this paper aims to investigate the impact of climate change on the spatial distribution of the agriculture sector in Turkey. Using provincial data between 2004 and 2019, our findings show that climate change has a pervasive impact on the regional distribution of agricultural activities. We found out that the impact of climate change on agricultural outcomes is mainly visible through rising temperatures. Those regions with accelerating average temperature are realizing falling agricultural value-added and employment. Moreover, our findings show that the same areas also experience higher food and overall price increases. Our local variability analyses reveal the non-monotonic relationships and suggest that the negative impact of climate change is more observable in for the eastern regions. Our findings demonstrate that climate change is another factor that contributing to the west-east regional development disparities in Turkey. These results are robust to different model specifications and endogeneity of climate change. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1524&r=ara |
| By: | Lamia Jaidane-Mazigh (University of Monastir); Islem Khefacha (University of Sousse); Belgacem Smiri (University of Tunis) |
| Abstract: | This paper aims to investigate the gender-corruption relationship in 13 MENA countries over the period 2006-20. Given the presence of cross-sectional dependence and the heterogeneity of the panel, we implement second-generation econometric panel unit root and cointegration tests. Using the ARDL-PMG approach, which is categorized as an error-corrected model, the results are broadly in line with the existing literature. We show that increased women’s involvement in the economic and political sphere decreases corruption. The findings also reveal that the joint impact of women’s participation and institutional variables is more effective in lowering corruption. The democracy and political stability context plays an important role in explaining the negative impact of corruption, especially when women are policymakers. Finally, we provide robust evidence that when a country performs in gender equality, the link between gender corruption becomes stronger. These results lead to several recommendations for MENA policymakers. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1611&r=ara |
| By: | Asmaa Ezzat (Cairo University); Chahir Zaki (Cairo University) |
| Abstract: | This paper examines the effect of the quality of institutions on the membership in trade agreements from de jure and de facto perspectives, with a special focus on the Middle East North Africa (MENA) countries. First, for the de jure aspect, we analyze how the quality of domestic institutions in a country affects its likelihood of joining a trade agreement. Moreover, for the de facto aspect, this paper examines how the difference in quality of institutions among trading partners and enforceability degree affects the volume of trade among them. Our main findings show that the larger the difference in the quality of political institutions between a country and its trading partners, the less likely it signs a deeper trade agreement (compared to more shallow ones). Moreover, the higher the enforcement degree of the agreement, the greater the positive effect on trade flows. This result holds for the enforcement of the aspects related to the World Trade Organization provisions, and those not related to it. Yet, the larger the institutional difference among trading partners, the lower the negative effect on trade flows in deep agreements compared to shallow ones. It is also worth noting that our results hold even when we control for the selection bias related to joining a trade agreement. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1514&r=ara |
| By: | Stylianou Kalaitzi, Athanasia; Samer, Kherfi; Alrousan, Sahel; Katsaiti, Marina-Selini |
| Abstract: | This paper examines the export diversification process and the causality between disaggregated manufactured exports and economic growth in the United Arab Emirates (UAE). The study develops a model whereby domestic investments, gross domestic product, as well as disaggregated manufactured exports and imports of goods and services, are considered. The results show that chemicals and related products cause short-run economic growth, while a bi-directional causality exists between machinery and transport equipment exports and economic growth both in the short and long run. Therefore, the shift to machinery and transport equipment exports contributes to long-run, sustainable economic growth in the UAE. |
| JEL: | L81 N0 |
| Date: | 2022–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:117590&r=ara |
| By: | Touhami Abdelkhalek (Université Mohammed VI Polytechnique); Aziz Ajbilou (Université Mohammed VI Polytechnique); Mohamed Benayad (Université Mohammed VI Polytechnique); Dorothée Boccanfuso (Université Mohammed VI Polytechnique); Luc Savard (Université Mohammed VI Polytechnique) |
| Abstract: | TThe digital is generating a lot of interest around the world and Morocco is not spared. This transformation is transversal and concerns all sectors of economic activity. In this article, we propose to raise some of the effects that digitalization could have on the main sectors of the Moroccan economy and propose some avenues for solutions. Beyond the presumed negative impacts in terms of job loss and limited growth, measures to increase productivity, create new employment opportunities, make the labor market more flexible or increase human capital seem to be strategies to consider. The development of e-gov in Morocco must continue, especially by improving the coordination of public policies implemented as part of a global approach. The adoption of digital technologies in the financial sector will promote economic growth through access to financial services. At the same time, the deployment of e-commerce, as a sector that promotes and facilitates business, can also have a significant impact on traditional business structures. Finally, the digitization of the agricultural sector is seen as one of the solutions to address some of the many challenges faced in this sector. However, much work remains to be done to ensure that a digital gap does not develop and that the digitization of agriculture can contribute to poverty reduction in Morocco. The analysis of these different sectors confirms that the success of the digital transformation will condition the performance of the Moroccan economy in terms of employment, growth and reduction of inequalities. |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1503&r=ara |
| By: | City Eldeep (Cairo University); Chahir Zaki (Cairo University, EMNES and ERF) |
| Abstract: | This paper examines the effect of the COVID-19 shock on the Egyptian economy using a computable general equilibrium (CGE) model. We contribute to the literature in several ways. First, using a CGE model, we try to distinguish between supply and demand effects of COVID19 on the Egyptian economy. Second, using a dynamic model, we examine the key differences between the effects of the pandemic on the economy in both the short and long terms. Third, we identify how the pandemic and the policy responses of the government had a heterogeneous impact on different economic agents and sectors. Fourth, we modify the model to include the informal labor that was highly affected by the pandemic. We calibrate the mode using the social accounting matrix of Egypt of 2014/2015. Our main findings show to what extent the Egyptian economy has been relatively vulnerable to the world economy with the decline in most of its foreign currency sources. Yet, while the economy is negatively affected in the short term by the pandemic, most of the effects are temporary and vanish in the long run. In terms of the policy response, increasing public current consumption without sectoral targeting has positive welfare effects but hurts economic growth and employment. In contrast, increasing public investment increases growth, welfare, and employment in the short run thanks to more externalities. In terms of social policies, financial transfers to households/domestic business agents and irregular workers increase private consumption but negatively affects economic growth and employment with a deteriorated fiscal stance of the government. Finally, the monetary stimulus package has significant growth, employment, and well-being effects compared to fiscal one since the latter raises the cost of production because of the crowding-out effect, while the former reduces it. |
| Date: | 2022–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1532&r=ara |
| By: | Ahmed Shoukry Rashad (Dubai Department of Economic Development, Government of Dubai); Mesbah Fathy Sharaf (University of Alberta) |
| Abstract: | In this study, we exploit a natural experiment, an education policy change reducing compulsory schooling from nine to eight years in Egypt, to estimate the causal impact of maternal education on mothers’ attitude toward female genital mutilation (FGM), the probability that their daughters undergo FGM, and their intention to perform FGM to her daughters in the future. We use a nationally representative sample of 16, 572 ever-married women aged between 15-49 from the 2008 Egypt’s Demographic and Health Survey and utilize a fuzzy regression discontinuity (FRD) framework to estimate the causal impact of maternal education on the three FGM outcomes. Our main findings suggest that maternal education did not discourage the actual implementation of the FGM practice in Egypt. It did not reduce either the probability of having a circumcised daughter or the motivation to perform FGM in the future. However, our results suggest maternal education had a favorable impact on the sentiment toward the FGM practice. The unexpected results maybe explained by the poor quality of schooling in Egypt on human capital protection and the power of traditionalism versus education |
| Date: | 2021–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1497&r=ara |
| By: | Dina Atef Mandour (Cairo University) |
| Abstract: | Apart from being a health crisis in the first place, COVID-19 at its core is an economic as well as a food security potential crises. This paper assesses the link between the pandemic and food security status with special focus on the MENA region. It highlights the different channels through which the pandemic could impact the status of food security, with its different pillars including affordability, availability, and utilization. Globally as well as in the MENA region, COVID has mainly affected the affordability and utilization pillars of FS, and had negligible effects on the availability pillar, at least in the interim. To understand the link between food insecurity and the pandemic, the study employs two types of datasets and correspondingly two equations were estimated using two different indicators for measuring food security and two indicators to proxy the effect of the pandemic. The two approaches confirmed that the variability in food security status across all countries is significantly negatively related to the pandemic stringency on global and MENA region levels. The empirical assessment has drawn vivid attention to the relative importance of the role of institutional and demographic prerequisites, consecutively, needed to handle the pandemic in explaining the food insecurity variability across all countries, compared to the effect of the stringency of the pandemic as measured by the number of confirmed cases. Regression results have put the MENA region at a disadvantaged situation, compared to the rest of the world, regarding its coping capacity limitations as represented by the weak governance, high prevalence of corruption and fragile health systems in explaining countries’ variability in food security levels. COVID has thus the potential of being the catalyst that would intensify the urgency to undertake radical reforms in food systems and to revisit several directly and indirectly related structural and institutional rigidities that have affected accessibility and utilization pillars in MENA region. |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1506&r=ara |
| By: | Najat El Mekkaoui (University Paris Dauphine, LEDa DIAL, France); Yeganeh Forouheshfar; Asma Benhassen; Nidhal Ben Cheikh; Jacob Emont |
| Abstract: | Informality is prevalent in Tunisia, limiting the access of a large share of the population to social safety nets. The COVID-19 pandemic has demonstrated more than ever the importance of an inclusive and stable social protection system. Meanwhile, informal workers have been disproportionately affected by the health crisis, hence, extending social security coverage to workers in the informal sector is vital. This paper provides a brief overview of the existing social protection schemes and programs in Tunisia and aims to analyze challenges and opportunities for the extension of social protection to informal workers in the labor market, through studying the main characteristics of Tunisia’s informal workforce and also the characteristics of those informal workers who have transitioned to formality. Finally, we provide policy recommendations tailored to Tunisia’s current situation. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1576&r=ara |
| By: | Aysun Hiziroglu Aygun (Istanbul Technical University); Selin Koksal; Gokce Uysal |
| Abstract: | This paper investigates how the pandemic affected the labor market in Turkey, using a unique dataset collected via face-to-face interviews in September and October 2020. Relying on the retrospective nature of our dataset, we study a broad set of outcome variables to identify the most affected groups in labor market during the first wave of COVID-19. We contribute to the literature by providing evidence from a developing country which has long-lasting structural problems in its labor market such as gender divide in paid work and high informal employment. Our results indicate that, being a woman, having low education levels and having children at home were important risk factors in terms of labor market outcomes during the pandemic. At the intersection, women with children who did not have a high school degree are found be the most vulnerable group as they are more likely drop out of employment and to report a loss in income and in hours of paid work. Self-employment and informal employment are emerged as other risk factors contributing to the vulnerability in labor market. Our findings provide insightful evidence on discussing the effectiveness of job protection policies that cover only formal employment and disregards the gender imbalances in labor force in Turkey. |
| Date: | 2022–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1533&r=ara |
| By: | Iman Cheratian (Tarbiat Modares University); Saleh Goltabar (Tarbiat Modares University); Mohammad Reza Farzanegan (Philipps-Universität Marburg) |
| Abstract: | Given the importance of firm strategic management in time of crises, this study investigates Micro, Small, and Medium Enterprises (MSMEs) survival strategies during the international sanctions against Iran. Using data from a questionnaire of 486 firms between December 2019 to September 2020, we found that firm strategies in reducing research and development (R&D) expenditures, marketing costs, and fixed/overhead costs and investing in information technology (IT) are positively related to their survivability. Conversely, managerial decisions to “reduce production” and “staff pay cut/freeze” have negative and significant impacts on a firm’s ability to survive during sanctions. Moreover, micro firms are more resilient than their small and medium counterparts. The findings also confirm that age has a significant and positive impact on firm survival. Finally, the results show that having a business plan, access to finance and technology, owner education, export orientation, business networking and consulting services are the key drivers of withstanding the pressure from sanctions. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1569&r=ara |
| By: | Eman Moustafa (General Authority for Investment and Free Zones); Amira El-Shal (Cairo University) |
| Abstract: | Fiscal sustainability is a major source of concern in light of successive weather and health disasters. We estimate the contemporaneous and long-run effects of weather vis-à-vis health disasters on the fiscal sustainability of 21 Middle East and North Africa (MENA) economies during 1990-2020 using two-way fixed-effects and two-step system generalized method of moments strategies. We also examine if domestic resource mobilization and external financing act as fiscal stabilizers that mitigate disaster effects. We find that weather disasters reduce the budget and overall fiscal balances by 2.1 percent and 2.2 percent instantaneously and by 5.4 percent and 6.2 percent after one year, respectively. Health disasters reduce the budget and overall fiscal balances respectively by 0.4 percent and 0.3 percent instantaneously, with no long-run effects observed. Our estimates indicate that government debt can help mitigate all types of disasters. Domestic resources from sovereign wealth funds and business taxation are more effective in mitigating the effects of weather disasters compared to external sources of finance. Countries with higher foreign reserves and net savings are better able to fiscally endure health disasters. This study emphasizes the significance of domestic resource mobilization visà-vis external sources of finance in times of disasters |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1520&r=ara |
| By: | Dina N. Elshahawany (Zagazig University); Ramy H. Elazhary (Zagazig University) |
| Abstract: | Poverty is one of the major socio-economic problems facing most developing countries. In Egypt, 29.7 percent of citizens live below the poverty line. The problem is more evident at the regional level, especially in Upper Egypt. Reducing poverty could be achieved through better allocation of government spending as it is considered an essential factor to promote economic growth, improve income distribution, and reduce poverty. Understanding the relationship between government spending and regional poverty reduction will help policymakers to design and implement programs that have the ability to reduce regional poverty and lessen income inequality effectively. This study aims to analyze the impact of government spending in alleviating regional poverty in Egypt. A panel data set for Egypt's 27 governorates through (2010-2018) has been employed. Using the two-way fixed effect regression model, the study finds that social government spending significantly affects poverty reduction across regions. At the regions level, health, education and social government expenditures have a significant negative impact on poverty, especially in Upper Egypt and Cairo regions. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1609&r=ara |
| By: | Nesma Ali (Düsseldorf Institute for Competition Economics (DICE), Heinrich-Heine University D¨usseldorf); Lisa Chauvet (UMR Centre déconomie de la Sorbonne, Paris 1 Pantheon-Sorbonne University); Mohamed Ali Marouani (UMR Développement et Sociétés, IRD and Paris 1 Pantheon-Sorbonne University and ERF) |
| Abstract: | In this paper we study the impact of the variation of the stringency of COVID containment measures and their volatility on rms’ performances. The analysis is based on regressions relying on three waves of rms’ surveys, conducted in four countries of the MENA region in 2021. Our main results are that restrictions tightening but also a higher volatility of the stringency index are negatively associated with the variation in rms’ sales. Access to nance does not seem to lessen the negative eect of the stringency of restrictions and volatility on sales. However, while rms’ adaptation through changes in the business model or digitalization dampens the eects of higher stringency, only a change in the business model can dampen the eects of higher volatility. We also nd evidence of a stronger negative eect of restrictions tightening for foreign-owned and exporting rms. The webinars, reports and papers are supported by the project “Advancing the Decent Work Agenda in North Africa (ADWA’)”, implemented by the International Labour Organization (ILO) and the Swedish International Development Cooperation Agency (Sida). The project aims to promote job-rich growth, International Labour Standards (ILS) and their application at the enterprise level. It works at the policymaking level in order to support evidence-based decisions on key dimensions of the Decent Work Agenda. This project was made possible by the generous contributions of the International Labor Organization (ILO), Agence Française de Développement (AFD), The Foreign Commonwealth and Development Office (FCDO) of the Government of the United Kingdom, the World Bank and the Arab Fund for Social and Economic Development (AFESD). |
| Date: | 2022–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:swp20221&r=ara |
| By: | Dina N. Elshahawany (Zagazig University); Eduardo A. Haddad; Michael L. Lahr |
| Abstract: | In 2014, Egypt started its national road project. This project is one of the greatest achievements in the history of Egyptian roads, and perhaps even all infrastructures. It is designed to connect the country's governorates through a 30% expansion of the existing 23, 500 km network of roads. Its costs are currently estimated at $9.8 billion. There are now about two-thirds of the National Roads Project plans; another 1, 300 km is still under construction. Another 1, 200 km will be built in the near future. The project has enhanced accessibility across the country enriching the opportunity for further expansion into industrial, agricultural and urban areas. Measuring the project's economic impacts would emphasize the project's importance and allow for better targeting of new road projects. In this paper, we explore how the National Road Project likely changed the country's economy at both the national and regional levels. We do this by applying the Computable Spatial General Equilibrium (SCGE) model in Egypt. We found that the project revitalized the national economy by engaging deeply in some of Egypt's least developed governorates. The increased accessibility brought by the corridor has translated into positive efficiency gains at the national and regional levels. The model allows for exploration of the areas most affected by the project and thus could assist planners in allocating infrastructure investments. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1610&r=ara |
| By: | Kelishomi, Ali Moghaddasi (Loughborough University); Sgroi, Daniel (University of Warwick) |
| Abstract: | Iran has the world's only government-regulated kidney market. We report the results of the first field study of donor behaviour in this unusual market. Participants have lower risk tolerance and higher patience levels than the Iranian average but display no difference in rationality from population averages and there is evidence of altruism among participants. We provide an examination of decision-making in extreme situations by individuals in this market, typically at the very bottom of the income distribution, and shed light on the sort of people likely to participate if other nations were to operate such markets. |
| Keywords: | kidney donation, Iranian kidney market, risk, patience, rationality, altruism, generalized axiom of revealed preference, lab in the field |
| JEL: | I11 I12 I18 C93 D03 |
| Date: | 2022–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15806&r=ara |
| By: | Touhami Abdelkhalek (Mohammed VI Polytechnic University); Dorothee Boccanfuso (Université Mohammed VI Polytechnique - AIRESS - FGSES - Maroc) |
| Abstract: | Two new methodologies are developed to approach the impact of the reform of the social protection system in Morocco on multidimensional poverty as measured by the MPI introduced by OPHI, and its components. These approaches are distinguished by their mechanism for targeting beneciaries. The rst approach bases the identication of beneciaries on random selection. The second approach is a priori more objective and based on a probabilistic model (probit). As an illustration, we use data from Morocco's 2018 Enquête Nationale sur la Population et la Santé Familiale (ENPSF). We consider three reform scenarios targeting health and education indicators. We present the results in ponctual form and by condence intervals constructed using both Monte Carlo and bootstrap approaches. Finally, we perform a distributional analysis to overcome the arbitrariness of setting the poverty line associated with the measures and make robust comparisons. Our results show that the three simulated reforms have a positive eect on the multidimensional poverty measures, regardless of the approach used. At the methodological level, targeting by objective identication does not necessarily dominate random targeting for the simulations we conducted, possibly because of the highly unbalanced sample. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1607&r=ara |
| By: | Reham Rizk; Racha Ramadan; Rana Hendy |
| Abstract: | The COVID-19 pandemic poses massive economic challenges on the Jordanian economy, as well as on other economies in the region and worldwide. The COVID-19 pandemic has exacerbated the existing inequalities, economic and non-economic inequalities, between the different socio-economic groups. Hence, understanding the determinants of inequalities and the characteristics of the vulnerable groups are required to provide adequate policies to reduce inequalities, eradicate poverty and leave no one behind. Within this context, the present report overviews the inequality status in Jordan, before and after the outbreak of COVID-19. Based on data availability, the report tackles inequality in expenditure as a proxy of income inequality. While for inequalities in capabilities, the report focuses on inequality in educational outcomes and opportunities. The report summarizes the results of the empirical analysis conducted through research partnership between UNDP Jordan and Economic Research Forum.* The report sheds the light on the drivers of income inequality and examines inequalities of opportunities and of outcomes in education using the latest rounds of the Jordan Household Income and Expenditure Survey (HIES). COVID-19 raises the renewed concerns about inequality. Leveraging on the second wave of the COVID-19 MENA Monitor data, collected by ERF, we examine the impact on income inequality and education. The analysis shows that income inequality is mainly driven by differences in the socioeconomic characteristics of individuals such as education level, employment status and geographical location, as well as the returns to such characteristics. Geographical inequality is in favor of the urban areas. While the gender wage gap is in favor of men, the gender expenditure gap is in favor of female-headed households. Inequality of outcomes in education is related to individual effort such as time and effort spent on educational attainment and measured using the highest educational level attained by students over the period from 2008 to 2017. The findings show that overall inequality of educational outcomes has been widening over time in particular with completing secondary education and above compared to basic completion. The main drivers of educational inequality include parental wealth and education. Additionally, girls in Jordan are less likely to complete basic education compared to boys. The results show that inequality of opportunity in education arises from circumstances beyond the individual’s control such as parental education and financial resources. Inequality in educational opportunities at the completed primary level for young people is persistently high, with wealth being the most influential factor. Inequality of opportunity at the secondary level of education and higher has worsened over time with household wealth being the most important determinant. Assessing the impact of COVID-19 on income, by examining the impacts of the individuals’ and households’ characteristics on the vulnerability of losing income, show that the economic drawback of the pandemic has disproportionate impacts on individuals according to their economic activity, education level, nationality, gender, income group and age. Women, youth, Syrians and individuals living in urban areas are more likely to have lost income during the crisis. Moreover, employment is a key determinant. Informal employees, those working in hard-hit sectors and those who were suspended or had a decline in their wage payment, are more vulnerable to decreasing household income. The report pursues answering the questions of how children’s education are influenced by school closures as a response to COVID-19 outbreak. We examine the socioeconomic status of households using different educational tools during the COVID-19 school closure. The main drivers of inequality for education are families’ education and financial resources. Families play a very important role in helping their children in using online platforms and books. The usage of online education and receiving parents’ help contribute to unequal opportunities for kids in school. Moreover, educated parents can assist their kids in schoolwork and measure their performance over time. Several policy lessons can be concluded from the analysis. Fiscal reforms are required, with removal of subsidies for richer households, poverty reduction programs targeting the poorest and vulnerable segment and improve targeting of social protection schemes. More measures are needed to support jobs and workers. For instance, temporary cash transfers for the lay-offs and self-employed. For education, the government needs to take additional actions to guarantee basic schooling for children, reduce school dropout rates, and improve the quality of education. Other policy options include awareness campaigns, offering conditional cash assistance targeting the least advantaged families to help their children progress at school. As parents’ education is one of the main drivers of inequality of outcomes in education; the government can design programs to reduce illiteracy rates and to formulate ICT literacy programs, particularly for adults. Finally, it is worth noting that the presented analysis is limited by data availability and by the different variants of the COVID-19 that may continue affecting the labor market and the economy. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:prr41&r=ara |
| By: | Rana Hendy (American University in Cairo); Shaimaa Yassin (Institute for Research on Public Policy, Canada) |
| Abstract: | Boosting low levels of female labor force participation remains a challenge in the MENA region. Women, especially after marriage and childbirth, typically forgo the labor market (LM), particularly when jobs/job offers are non-family-friendly. Especially for females, a job is perceived as a combined package of wages and non-monetary attributed. This paper relies on an attributebased discrete choice experiment using hypothetical job offers, as opposed to the employment situation pre and post the outbreak of the Coronavirus. The objective is to estimate the willingness to pay (WTP) distribution for non-monetary job attributes. An experiment was administered within a COVID-19 impact survey in Egypt (namely CETUS20) - 5 months into the outbreak of the pandemic, making it possible to measure the change in job preferences following the COVID19 health shock. The hypothetical choice method robustly identifies preferences, and overcomes challenges to estimate WTP for specific non-monetary job attributes using other methods. Our findings reveal that COVID-19 has led workers to value more positive job amenities, such as parttime jobs, flexible work, work from home and shorter commutes. With the increased burden of domestic work, females with children value the most jobs where they can work on a part-time basis. They would require to receive substantial increases to their current labor income to accept jobs with a non-family friendly set-up, such as the need to work in weekends or night-shifts. Interestingly, however, respondents in the experiment, particularly male workers, have perceived overtime as a positive job amenity. Their WTP for the latter increased post-COVID suggesting income challenges faced by workers post-COVID. Generally, a substantial proportion of our experiment's employed respondents accept the hypothetical job offers they receive during the interview (about 40% of the males and 70% of the females). More than 50% of those who accepted those offers would have never accepted them prior to COVID. Our results reveal the change in the value of employment to workers, particularly females, which comprises both the wage and the non-monetary attributes associated with employment |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1575&r=ara |
| By: | Sherif Kamel (American University in Cairo (AUC)) |
| Abstract: | Digital transformation offers Egypt a unique opportunity to transform several economic sectors such as financial services, retailing, healthcare, agriculture, and manufacturing while creating opportunities for individuals and enterprises and impacting inclusive development and economic growth. However, while digitalization can make a significant difference in the economy, it should be supported by the required technological infrastructure, human capital, and the appropriate legal, regulatory, and other enabling environments so that digital transformation becomes a platform for equity rather than divide. This paper reviews the current state of the economy, the evolution of information and communication technology in Egypt, and the potential impact digital transformation can have on society |
| Date: | 2021–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1488&r=ara |
| By: | Samir Makdisi (American University of Beirut); Raimundo Soto (Pontificia Universidad Católica de Chile.); Razan Amine (J-PAL Asia) |
| Abstract: | There is now consensus that the 2010-2011 uprisings in Arab countries reflect the breakdown of the social contract that had prevailed for over half a century. Governments could no longer sustain an economic system that traded political submissiveness for continuous employment in the public sector and food and energy subsidies. The initial hopes for political and economic reforms quickly faded, and the aftermath of the uprisings led to open conflict and, eventually, civil war. We first identify the key factors that influence the outbreak of a conflict (Syria and Libya) or the renewal of political violence (Yemen and Iraq). Our analysis extends the authoritarian-bargain theory of civil conflicts to include uncertainty about the value of the political bargain offered by an authoritarian government to citizens who have limited information about the available government resources and their distribution among different groups, the probability of success of a revolt, and the eventual political and economic costs of a failed uprising. We test our theory using data for around 125 economies in the period 1980-2020 and undertake several counterfactual exercises that allow us to derive policy implications vis-à-vis the desirable polices authorities should implement to increase the probability of maintaining peace after a conflict |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1580&r=ara |
| By: | Reham Rizk (Universities of Canada in Egypt); Nada Rostom (Research associate in J-pal MENA) |
| Abstract: | There is substantial inequality in educational achievement in Jordan, but few studies examine its extent and the way forward to reduce inequality and achieve social mobility. This paper attempts to examine the sources and trends of inequality in educational outcomes in Jordan using Household Income and Expenditure Surveys (HIES) from 2008 to 2017. In addition, using the D-index and shapely decomposition, we model the sequential nature of attaining education to give an overall view of the influence of circumstances on child progression through schooling years. We find that inequality is high, especially with respect to transition from basic completion to secondary education and above. Parents’ education, in particular fathers’ education, and family financial resources are considered the main drivers of the inequality in the transition from basic to secondary and tertiary education levels. In the 2017 HIES wave, shapely decomposition shows an increasing gender gap over time where girls have lower completion rates compared to boys. |
| Date: | 2021–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1491&r=ara |
| By: | Massoud Karshenas (University of London) |
| Abstract: | We examine the impact of minimum wages on the distribution of earnings in Iran. Specifically, we show that minimum wages have played a critical role in the distribution of earnings and the distribution of household income. We identify a perverse relationship between minimum wages and distribution of earnings, which is contrary to the observed relationships in other developed and developing countries. To explain this anomaly, we investigate the role of minimum wages in the overall wage-setting institutionsin the country and conduct decomposition analysis by reweighting methods that separate the effect of individual attributes from wage structure effects. The paper concludes by highlighting some of the broader implications of our findings for future research on inflation, unemployment and competitiveness in oil economies like Iran |
| Date: | 2021–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1478&r=ara |
| By: | Mosab O. M. Ahmed (University of Khartoum); Diya Albatal; Omran A. H. Musa (Qatar University) |
| Abstract: | The Sudanese youth from both genders mounted a remarkably courageous uprising in December 2018 aimed at unseating the long-reigning regime of Gen Omer Al-Bashir, one of the most repressive regimes in Africa and the Arab world. Therefore, this paper aims to explore the role of economic and political factors that hindered the absorption of Sudanese youth into the developmental process. It also tries to understand the role of youth in the December Revolution and in shaping the political discourse, especially after the October 25, 2021, military procedures. Finally, it investigated the determinants of Sudanese youth’s views on government, political parties and their aspiration and interest in public affairs before and after the revolution. A cross-section design was followed. The data on Sudanese youth, aged 18 – 35 years who were surveyed on the Arab Index were obtained from the Arab Center for Research and Policy Studies. A backward stepwise logistic regression model was employed for testing the hypotheses, with a probability value set at pr (0.20). Odds ratios were reported as effect size, marginal effects were computed, and the link-test was used for model specification. The majority of the surveyed Sudanese youth do not have political membership and do not trust political parties. Young people from families with good economic conditions were more likely to trust the government during and after AlInqaz regime. Adult youth aged 25 – 34 years and those who are unemployed were found to have increased odds of trusting the political parties after the revolution. Young people who are males, aged 25 - 34 years, and studied less than or secondary school and above have an increased likelihood to participate in public affairs during Al-Inqaz and after the revolution. Based on our analysis and international best practices of youth development policies and plans. The policy lessons to be considered include; the formulation of robust policies to integrate Sudanese youth into the economic system, the incorporation of young people in the planning of the national strategic vision, and catalyzing programs for young peoples’ capacity building. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1595&r=ara |
| By: | Khaled Nasri (University of Tunis El Manar); Mohamed Amara (University of Tunis); Imane Helmy (World Bank’s Poverty and Equity Global Practice and ERF) |
| Abstract: | This paper proposes two new approaches for targeting the beneficiaries of social benefit programs in Tunisia, such as the cash transfer and healthcare programs. The first approach is a mixed means test (MMT), which extends the proxy means test (PMT) model to explicitly combine both individual/household assessment and geographical targeting methods. The second approach is drawn from the identification step of the family of multidimensional poverty measures. Using the 2015 National Survey on Household Budget, Consumption, and Standard of Living, our results show that the targeting performances based on both approaches are considerably better than the existing programs. Specifically, the coverage rate of the poorest 10 percent using the MMT targeting model that combines individual/household and geographical scales is around 29 percent, nearly twice the coverage rate of the current PNAFN program. The MMT works well not only at the national level but also at the regional level. It allows us to minimize inclusion and exclusion errors for the poorest regions of Tunisia. Additionally, the proposed multidimensional approach identifies a higher number of beneficiaries compared to the selection process currently implemented in Tunisia. However, the inclusion of such a number of households in a social program may be constrained by the unavailability of monetary resources and the country’s financial situation. For this purpose, the deprivation targeting approach allows us to categorize potential beneficiaries into three mutually exclusive and collectively exhaustive groups of households according to their degree of deprivation. |
| Date: | 2022–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1593&r=ara |
| By: | Yacoub Alatrash (University of Washington); Gani Nurmukhametov (University of Washington) |
| Abstract: | This paper examines the effectiveness of fiscal policy in Egypt under different debt regimes. In so doing, we evaluate the relationship between expansionary fiscal policy and real economic growth. Two elements of particular interest are the (non)linearity and the impact of domestic debt on macroeconomic variables. Specifically, we search for a threshold effect by applying the Hansen (2000) sample-splitting threshold regression model. We establish with statistical significance that fiscal expenditure leads to greater real GDP in a low-debt regime (81.5% domestic debt-to-GDP threshold) and lower real GDP in a high domestic debt above the threshold. We further explore and test possible theoretical explanation for the findings. The paper concludes with a discussion of policy implications of this research. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1527&r=ara |
| By: | Khaled Nasri (University of Tunis El Manar); Mohamed Amara (University of Tunis); Imane Helmi (World Bank’s Poverty and Equity Global Practice and ERF) |
| Abstract: | This paper aims to provide a comprehensive overview of the social protection system in Tunisia based on discussions with policymakers and civil society actors as well as a document review of academic literature and reports produced by the government, international organizations, and other stakeholders. After presenting information on the economic, demographic, and social factors influencing social protection strategies in Tunisia, the first part of this paper covers the legal framework related to contributory social protection schemes in the public and private sectors. We also identify the coverage of these schemes, the contributions and benefits provided, and the conditions for granting these services. We then discuss the non-contributory system of social protection in Tunisia, particularly the Assistance to Needy Families program, the school allowance program, the free medical assistance program, energy and food subsidies, and the Amen Social program, among others. Finally, we identify the gaps in ensuring the delivery of social protection to all Tunisians, as well as the expectations of and recommendations for the civil society and international organizations and the key issues for moving forward. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1592&r=ara |
| By: | Nada Hazem; Marina Hicham; Racha Ramadan; Moheb Said; Chahir Zaki |
| Abstract: | The Jordanian case, being an upper middle-income, relatively diversified and politically stable country, is of particular interest for several reasons. This report examines the macroeconomic and microeconomic effects of COVID-19 on Jordan. First, Jordan has, for a number of decades, acted as the “shock absorber” for the surrounding area, an island of stability and refuge in a region beset by conflict. According to the UNHCR (2019), one in every four people in Jordan is a refugee. Jordan had barely begun to recover from the global financial crisis when the Syrian conflict and regional instability further hampered its economy (Assaad and Salemi, 2019). The COVID-19 pandemic is a further shock to an already struggling economy; prior to the pandemic, Jordan already had the third lowest rate of employment in the world with 31% in 2020. Unemployment rate is particularly high among youth with 37.28% and women with 24% (Assaad, Krafft and Keo, 2019; World Development Indicators, 2022). Moreover, Jordan, being a rent economy, is highly dependent on foreign direct investment and remittances. With the decline in oil prices in labor-importing countries and the pandemic, these channels are likely to exert a negative effect at the macroeconomic level (lower economic growth, more unemployment, less trade) and the microeconomic one (poor, youth, women, informal workers, refugees and vulnerable populations). The objective of this report is threefold. First, it provides an overview of the COVID-19 impact on Jordan and the associated government’s response. The latter was necessary but not sufficient, especially when it comes to the support provided to households and firms. Second, using both macroeconomic and microeconomic datasets, we examine the effect of the COVID-19 on the economy. Indeed, we show how the structural characteristics of the Jordanian economy amplified the impact of the pandemic. Finally, we provide some policy recommendations to curb the negative effects of this shock at different levels (especially monetary, fiscal, social, and trade policies). Several conclusions can be withdrawn from our findings. At the macroeconomic level, in order to curb the negative effects of the health shock, the government implemented some fiscal measures that led to a decrease in government revenues and an increase in spending. This led to a deterioration of the fiscal deficit that increased from 6% during the first quarter of 2020 to 10% in the second quarter and a higher primary deficit from 1% to 5.5%. At the monetary policy level, the Central Bank adopted an expansionary monetary policy. To do so, more than 550 million dinars were injected to the national economy by reducing the compulsory reserve from 7% to 5%. Moreover, the Central Bank of Jordan adopted a number of measures to boost the financial sector including: restructuring the loans of individuals and companies, reducing the guarantee commissions of the industrial and services finance program from 1.5% to 0.75% for all loans, reducing the start-up loans guarantee commission from 1% to 0.75%, and increasing the insurance coverage percentage of the local sales guarantee program from 80% to 90%. Mid-sized firms took advantage of this initiative since 38% applied for or received a business loan. This figure is lower for larger ones (22%). The lowest figure is the one of micro. This result is a surprising given that, generally, the smaller the firms, the more they need financial resources. Yet, mid-sized firms, exporters and those operating either in the manufacturing sector or the services contracted a loan from or asked to reschedule it in order to cope with the crisis. At the trade level, the total number of harmful and liberalizing measures imposed by Jordan has changed drastically with the health crisis since the total number of harmful measures has increased from 1 to 7 between 2018 and 2020 (such as the ban on exports of food products or the ban on re-exportation or selling of medical masks). At the microeconomic level, small, and micro firms are the most affected by the economic slowdown. Employed individuals in these firms, especially those with no contracts, were more likely to be fired or experience decline in their payment. Second, income decline, increase in food price, limited availability of food and limited mobility threaten food security of households. This food crisis may be considered as an access problem, both physically and economically, especially for low income and vulnerable groups as refugees and those living in urban areas. Third, women are the main ones to bear the cost of the increasing care work during the lockdown period and the e-schooling. Fourth, working remotely, in a context of precaution measures and social distancing, is not easily applied as some jobs cannot be done off work sites, employees are not allowed to work from home and because of lack of technology. Finally, the main coping strategies applied to face the painful economic impacts include borrowing money from family or friends in the country, taking money out of savings, borrowing from banks, employer, or private lender and selling assets. |
| Date: | 2022–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:prr44&r=ara |
| By: | Saif El Din Daoud Abd El Rhman |
| Abstract: | The Jordanian case, being an upper middle-income, relatively diversified and politically stable country, is of particular interest for several reasons. This report examines the macroeconomic and microeconomic effects of COVID-19 on Jordan. First, Jordan has, for a number of decades, acted as the “shock absorber” for the surrounding area, an island of stability and refuge in a region beset by conflict. According to the UNHCR (2019), one in every four people in Jordan is a refugee. Jordan had barely begun to recover from the global financial crisis when the Syrian conflict and regional instability further hampered its economy (Assaad and Salemi, 2019). The COVID-19 pandemic is a further shock to an already struggling economy; prior to the pandemic, Jordan already had the third lowest rate of employment in the world with 31% in 2020. Unemployment rate is particularly high among youth with 37.28% and women with 24% (Assaad, Krafft and Keo, 2019; World Development Indicators, 2022). Moreover, Jordan, being a rent economy, is highly dependent on foreign direct investment and remittances. With the decline in oil prices in labor-importing countries and the pandemic, these channels are likely to exert a negative effect at the macroeconomic level (lower economic growth, more unemployment, less trade) and the microeconomic one (poor, youth, women, informal workers, refugees and vulnerable populations). The objective of this report is threefold. First, it provides an overview of the COVID-19 impact on Jordan and the associated government’s response. The latter was necessary but not sufficient, especially when it comes to the support provided to households and firms. Second, using both macroeconomic and microeconomic datasets, we examine the effect of the COVID-19 on the economy. Indeed, we show how the structural characteristics of the Jordanian economy amplified the impact of the pandemic. Finally, we provide some policy recommendations to curb the negative effects of this shock at different levels (especially monetary, fiscal, social, and trade policies). Several conclusions can be withdrawn from our findings. At the macroeconomic level, in order to curb the negative effects of the health shock, the government implemented some fiscal measures that led to a decrease in government revenues and an increase in spending. This led to a deterioration of the fiscal deficit that increased from 6% during the first quarter of 2020 to 10% in the second quarter and a higher primary deficit from 1% to 5.5%. At the monetary policy level, the Central Bank adopted an expansionary monetary policy. To do so, more than 550 million dinars were injected to the national economy by reducing the compulsory reserve from 7% to 5%. Moreover, the Central Bank of Jordan adopted a number of measures to boost the financial sector including: restructuring the loans of individuals and companies, reducing the guarantee commissions of the industrial and services finance program from 1.5% to 0.75% for all loans, reducing the start-up loans guarantee commission from 1% to 0.75%, and increasing the insurance coverage percentage of the local sales guarantee program from 80% to 90%. Mid-sized firms took advantage of this initiative since 38% applied for or received a business loan. This figure is lower for larger ones (22%). The lowest figure is the one of micro. This result is a surprising given that, generally, the smaller the firms, the more they need financial resources. Yet, mid-sized firms, exporters and those operating either in the manufacturing sector or the services contracted a loan from or asked to reschedule it in order to cope with the crisis. At the trade level, the total number of harmful and liberalizing measures imposed by Jordan has changed drastically with the health crisis since the total number of harmful measures has increased from 1 to 7 between 2018 and 2020 (such as the ban on exports of food products or the ban on re-exportation or selling of medical masks). At the microeconomic level, small, and micro firms are the most affected by the economic slowdown. Employed individuals in these firms, especially those with no contracts, were more likely to be fired or experience decline in their payment. Second, income decline, increase in food price, limited availability of food and limited mobility threaten food security of households. This food crisis may be considered as an access problem, both physically and economically, especially for low income and vulnerable groups as refugees and those living in urban areas. Third, women are the main ones to bear the cost of the increasing care work during the lockdown period and the e-schooling. Fourth, working remotely, in a context of precaution measures and social distancing, is not easily applied as some jobs cannot be done off work sites, employees are not allowed to work from home and because of lack of technology. Finally, the main coping strategies applied to face the painful economic impacts include borrowing money from family or friends in the country, taking money out of savings, borrowing from banks, employer, or private lender and selling assets. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:prr42&r=ara |
| By: | Omar Mohsen Hussein (University of Essex and Institute for Social and Economic Research) |
| Abstract: | The objective of this paper is to investigate empirically the role of social networks in the determination of labour match quality in the Egyptian labour market. We study the differentials in wages and turnover between workers who found their jobs through social contacts compared to those who found them through other search methods. Using individual level data from the 2018 round of Egypt Labour Market Panel Survey (ELMPS), we build a worker fixed effect model for wages, and an employment survival model for turnover, and introduce interactions with tenure, skill level, and occupation to assess the possible heterogeneities of network effects. Our findings indicate an overall insignificant effect on initial wages, but there exists a wage penalty that appears on long run for connected workers. The effect on wage is insignificant for low skilled workers and negative for skilled workers. Contacts have a positive and significant effect on job duration for low skilled workers and the effect is insignificant for skilled workers |
| Date: | 2022–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1536&r=ara |
| By: | Sarah El-Khishin (British University in Egypt); Dina Kassab (Faculty of Economics and Political Science) |
| Abstract: | This paper empirically examines monetary-fiscal interactions during uncertainty shocks. Applying on the Egyptian economy, we examine the extent to which fiscal dominance and discretionary interventions resulted in undesired outcomes, particularly during uncertainty shocks. We construct a Structural VAR model to model monetary-fiscal interactions in Egypt during uncertainty. Alternative outcomes under counterfactual scenarios of monetary autonomy, as opposed to fiscal dominance, are examined under the New-Keynesian system of assumptions. Results show that poor monetary autonomy and sustained fiscal dominance contributed to establishing long-run procylical fiscal behavior in Egypt and significantly impeded the effectiveness of monetary policy in stabilizing the economy during uncertainty shocks. We recommend establishing a strong, commitment-based monetary policy framework to lessen the undesired outcomes resulting from the persistent fiscal dominance. Recent IMF-supported reform measures show a stronger role of monetary policy in stabilizing the economy within a coordinated framework. Nevertheless, proper institutional measures need to be established to sustain such outcomes after the materialization of the reform program. |
| Date: | 2021–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1493&r=ara |
| By: | Mesbah Fathy Sharaf (Department of Economics, Faculty of Arts, University of Alberta, Canada); Abdelhalem Mahmoud Shahen |
| Abstract: | This study examines the nonlinear impact of remittances on financial development (FD) in Egypt over the period 1980-2019 while controlling for other key determinants of FD. The paper utilizes a recently developed comprehensive index of FD and uses an Autoregressive Distributed lag (ARDL) bounds testing approach to cointegration and a vector error-correction model to estimate the short- and long-run parameters of equilibrium dynamics. We find support for the complementarity hypothesis in the short run in which remittances have a statistically significant positive impact on FD. However, the results show that remittances have an inverted U-shaped impact on FD in the long run. In particular, remittances complement (substitute) FD below (above) a remittance-toGDP ratio of 7.28 percent. This implies that in the long run remittances to Egypt hinder FD when received in large quantities. We also found that financial openness has a statistically significant positive impact on FD in the long run, while inflation impedes FD. Policies aimed at increasing the flows of remittances to Egypt should mitigate its potential adverse impact on financial development |
| Date: | 2022–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1545&r=ara |
| By: | Roll, Stephan |
| Abstract: | Egyptian President Abdel Fatah al-Sisi has consolidated his authoritarian regime in recent years. This has been accompanied by a significant increase in Cairo's foreign debt, which more than tripled between June 2013 and March 2022. The country's debt policy was directly linked to the presidential centre of power. The government managed a well-choreographed mix of incentives, threats, and concealment that made it possible to take out more and more new loans. The Egyptian military, on whose support President Sisi is dependent in order to assert his claim to power, is the main beneficiary of the debt policy. External debt helped to protect the revenues and assets of the armed forces, to finance major projects in which they could earn significant money, and to pursue an expansive military build-up. The instrumentalisation of debt policy for power politics increases the risk that Egypt will no longer be able to service its liabilities in the future. Above all, however, the misallocation of scarce financial resources undermines the socio-economic development of the country and promotes police-state repression. The latter, in turn, favours the political instrumentalisation of debt policy for power politics, as it prevents any control of government action. In the future, Germany and its European partners should therefore tie bilateral lending as well as support for Egypt in its negotiations with international financial institutions to two conditions: firstly, the dismantling of military economic activities - whereby the assets of the armed forces must also be disclosed - and secondly, concrete steps towards ending police-state repression. |
| Keywords: | Egypt, President Abdel Fatah al-Sisi, authoritarian regime, debt policy, power politics, international financial institutions, International Monetary Fund (IMF), Egyptian military, EU, bilateral lending |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:swprps:122022&r=ara |
| By: | Susan Razzaz (Economist and consultant, Jordan); Irene Selwaness (Cairo University) |
| Abstract: | Under the old social contract, the main components of social insurance were provided through several features of public employment: income during old-age and in case of disability was assured through pensions, while income was protected from sudden shocks by job security. In its effort to shift toward a new social contract, the Government of Jordan has consistently articulated its vision of a private sector led economy, and its intention to implement this vision through a shift from direct public provision of the social insurance components of the social contract to government as a regulator and facilitator of social insurance through private sector employment. This paper examines the extent to which Government regulatory efforts are ensuring private wage employment provides social insurance. The paper shows that it has become increasingly difficult for Jordanians entering the labor market to obtain a first job that provides effective coverage and that there are few opportunities for Jordanian workers to shift later into a job that provides effective coverage. The law is relatively comprehensive in requiring coverage. Despite the fact that coverage is required without regard to firm size, the existence of a written contract or regularity of work, compliance with the law is strongly determined by these factors. Surprisingly, when controlling for a wide range of job characteristics, there are no significant differences in coverage by gender or nationality. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1582&r=ara |
| By: | Gunes Asik (Tobb Economics and Technology University); Mohamed Ali Marouani (Paris 1 Pantheon-Sorbonne University and ERF) |
| Abstract: | Militarized conflict worldwide has been on a declining trend after World War II while trade and economic interdependence have been in-creasing rapidly. Whether trade and economic interdependence promote peace and whether conflict harms trade ties between countries are critical questions which have been studied widely in the conflict literature. A strand of this literature finds that bilateral trade reduces the probability of militarized conflict while multilateral trade increases the probability of conflict. In this research, we ask whether the relationship between trade and conflict is different for the MENA region as compared to the rest of the world. Using the dataset on Militarized Interstate Dispute between 1960 and 2014, we find that trade is not disrupted significantly after a conflict episode in the region. We find that unlike previous studies, both bilateral and multilateral trade induce conflict in the overall MENA region, however, as for oil rich countries, the increase in bilateral trade links is associated with lower probability of militarized conflict. RTAs within the region almost do not have an impact, due to their low effects on regional trade. Deeper RTAs may have had a different impact. Furthermore, countries with higher export sophistication are more likely to engage in conflict in the region. Finally we do not find a statistically significant relationship between FDI flows and conflict in general, but FDI outflows seem to be more deterrent for conflict than inflows |
| Date: | 2021–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1481&r=ara |
| By: | Ibrahim Saif (Jordan Strategy Forum); Rani Khouri (Excel Consulting) |
| Abstract: | This paper investigates the relationship between economic interdependence and conflict prevention. It will focus on the institutional dimensions of the relationship between economic interdependence and conflict prevention & management. The early days of what has been dubbed the 'Arab Spring' raised some expectations about whether the region could see a new era of renewed regional cooperation and integration after several failed attempts. Instead, the unfolding of events across different countries has further weakened the Arab state system and has thus given rise to new transnational identities such as tribalism, sectarianism, and outright fundamentalism, rather than regional unity. Regional institutions have played a limited role in entrenching economic integration and preventing or managing conflicts. The region has been historically a volatile region of instability and till today, it remains one of the least integrated and most unstable regions globally. While integration momentum was gaining pace before 2010, the instability associated with the Arab Spring moved the region one step behind. The paper discusses the complex relationship between economic interdependence and conflict prevention/management from an institutional lens, and analyzes the main institutional factors influencing this relationship. It provides an account of the main functional regional institutions related to economic interdependence and conflict management in the Arab World and discusses their quality and effectiveness. The last section presents policy directions to enhance the role of institutions and allow for deeper integration and less conflict. |
| Date: | 2021–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1479&r=ara |
| By: | Ghassan Dibeh (Department of Economics at the Lebanese American University) |
| Abstract: | This paper investigates the role of the new digital technologies in the Lebanese economy. After presenting an overview of the economy especially the postwar business cycle and the rise of a low productivity economy, the paper delineates the different aspects of the new technologies in Lebanon including the current state of startups, Fintech, e-government and e-commerce. Moreover, the paper investigates the potential labor market and inequality effects of the introduction of new technologies. The paper concludes with prospects and policy recommendations. |
| Date: | 2021–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1485&r=ara |
| By: | Saeed Tajrishy (Sharif University of Technology); Mohammad Vesal (Sharif University of Technology) |
| Abstract: | Public housing projects are hotly debated, especially due to their impact on neighboring properties. This impact is theoretically ambiguous; public housing projects could enhance local amenities through agglomeration externalities or direct government provision, however, the concentration of low-income households could trigger negative spillovers. The expansion of the housing stock is also an important channel for large projects. While the impact of public housing projects is wellstudied in developed countries, to the best of our knowledge, there is no rigorous empirical study on developing countries. In this paper, we study a large public housing project known as the Mehr housing project in Iran that facilitated the construction of two million affordable apartments, making it the largest public housing project in the world. We use the exact delivery date of Mehr units and their postal region to set up a difference-in-differences strategy. Using the universe of house transactions for 19 large cities in Iran between 2010 and mid-2019, we compare house price changes in Mehr postal regions to non-Mehr ones before and after Mehr units were delivered. Our results show that Mehr units lowered house prices in the same postal region by around 11 percent (significant at five percent). This effect is robust to controlling for city by time fixed effects, differential trends for suburbs, and regions with higher initial property values. We also provide suggestive evidence on the role of disamenity effects by looking at the heterogeneity of results across different house types and cities over time. Finally, we find a significant positive effect of available schools in the Mehr postal region that fits well with the amenity story. |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1505&r=ara |
| By: | Diego Martin; Erin Neale; Raffaele Bertini (Regional Office of IOM for Middle East and North Africa); Julia Smith Omomo; Olga Aymerich |
| Abstract: | Among the main socio-economic effects of the COVID-19 pandemic in Middle Eastern countries, its impact on small- and medium-sized enterprises (SMEs) is one of the most relevant, especially in post-conflict and fragile countries and contexts. To analyze this, the United Nations’ International Organization for Migration (IOM) in Iraq, the Food and Agriculture Organization (FAO), and the International Trade Centre (ITC) jointly conducted a panel study tracking the pandemic’s impact on SMEs in Iraq. The survey was disseminated among more than 700 SMEs across the country covering 16 economic sectors. Four rounds of data were collected at four points in time between June 2020 and June 2021 (June/July 2020, September 2020, November/December 2020, and June 2021) from businesses registered in the IOM’s database, located in both urban and rural areas. Findings from four rounds of data collection show that COVID-19 negatively affected production, revenue, and employment and, notably, the gender gap in the labor force at the beginning of the pandemic (February to June 2020) and COVID-19-related movement restrictions. This study concludes with related policy recommendations for Iraq and the Middle Eastern countries. |
| Date: | 2022–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1552&r=ara |
| By: | Mary Kawar; Zina Nimeh (United Nations University MERIT and Maastricht University); Tamara A. Kool |
| Abstract: | This paper provides a broad overview of the formal contributory and non-contributory programs provided formally by the Jordanian Government. The paper utilizes the Social Risk Management framework and the concept of Transformative Social protection to examine existing programs and reflect on social protection policy. Contextualized to the experience of Jordan and its socioeconomic realities, the paper presents a comprehensive gap analysis which stems from the mapping of social protection programs. The paper argues that the way forward for social protection policy and programming in Jordan should focus on recognizing and building upon the work that has been already done (especially the National Strategy for Social Protection), future roadmaps and plans of implementation processes and procedures must be coupled with clear monitoring and evaluation mechanisms to ensure their implementation. Additionally, the paper argues that international assistance should take the form of sustainable technical assistance, fiscal training and support, as well as inter-agency coordination to ensure a holistic approach based on a national Jordanian vision through a joint focus on policy and programs. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1590&r=ara |
| By: | Nisreen Salti (American University of Beirut); Stephen J. McCall DPhil (American University of Beirut); Noura El Salibi (American University of Beirut); Marwan Alawieh (Refugee Council Norewigen); Zeinab Ramadan (American University of Beirut); Hala Ghattas (American University of Beirut); Sawsan Abdulrahim (American University of Beirut); Berthe Abi Zeid (American University of Beirut) |
| Abstract: | Lebanon has battled the COVID-19 pandemic in the midst of an economic crisis. The evolution of the pandemic and a fragile health system have meant that public health policy has had to rely heavily on non-pharmaceutical interventions for disease control. However, changes in disease dynamics and pandemic fatigue have meant that disease control policies need to be updated. Identifying variables associated with adherence to non-pharmaceutical preventive practices, particularly for vulnerable groups, can therefore help inform and refine interventions in the face of pandemic fatigue and changing disease dynamics. Using recent and timely data on older (50 years and above) Syrian refugees in Lebanon, this paper explores the determinants of adherence to two non-pharmaceutical COVID-19 prevention measures (wearing a mask and avoiding social gatherings) among this high-risk subgroup in a vulnerable population. Among respondents who report adhering to these measures, the paper also identifies the determinants of sustained adherence over a period of 6 months. The findings suggest that older refugees and those less educated are less likely to wear a mask, and refugees living in informal tented settlements are more likely to relent on preventive practices within 6 months. Individuals with chronic diseases who initially report avoiding social gatherings are also likelier to desist than those without chronic illness. The lower continued adherence to mask wearing among residents of informal tented settlements points to factors beyond pandemic fatigue and that should be taken into consideration in devising measures for disease control: the potential for community-based norms to determine individual-level behavior. Recognizing the pivotal effect of communitybased norms in settings such as informal tented settlements is essential in adapting current policy and designing future interventions. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1585&r=ara |
| By: | Pelin Öge Güney (Hacettepe University) |
| Abstract: | Monetary policy plays a central role in stabilizing macroeconomic fluctuations. In addition to monetary policy, uncertainty in monetary policy associated with uncertainty in interest rates is an important determinant of economic decisions. In this paper, we analyze the effect of interest rate uncertainties for different maturities on industrial production, inflation, unemployment, and exchange rate for Turkey using the VAR model. Since the dominant position of the US economy in global financial markets implies uncertainty about how the monetary policy of the US (MPU) may impact foreign economies, we also discuss the impact of MPU uncertainty on the variables of interest. Although the effect varies across the different maturities of the yield, our findings suggest that interest rate uncertainty reduces the growth of industrial production, increases unemployment, and depreciates the exchange rate. Additionally, inflation increases in response to interest rate uncertainty shocks. Finally, while a shock in MPU uncertainty tends to significantly increase unemployment, it decreases the growth of production. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1558&r=ara |
| By: | Mohamed Ali Marouani (UMR DEVSOC, Universit´e Paris 1 Panth´eon-Sorbonne and IRD and ERF); Phuong Le Minh (Vietnam Academy of Social Sciences); Nidhal Ben Cheikh (University of Paris) |
| Abstract: | In this study, we analyze the impact of the PNAFN, a Tunisian social protection program combining a cash transfer and access to a free healthcare insurance program. The outcomes of interest are healthcare out-of-pocket spending, financial risk associated to illness, and healthcare utilization. Using the nationally representative household survey, we implement various regression techniques taking into account the endogeneity of selection into the program. We find that the access to PNAFN reduces the risks of incurring high and catastrophic out-of-pocket expenses. It also encourages the PNAFN families to spend more on medications than any of three control groups. However, PNAFN beneficiaries have a higher probability to be unable to visit the doctor when having an illness due to a higher demand for health facilities coupled with financial deficiencies. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1579&r=ara |
| By: | Izak Atiyas (Sabanci University); Mark Dutz (The World Bank) |
| Abstract: | This paper focuses on uptake and use of mobile internet-enabled smartphones as a key access technology enabling benefits from digitalization. Geographically, the paper focuses on three regions of the African continent and the Middle East, namely sub-Saharan Africa (SSA), North Africa (NAfr) and non-rich Middle East (NRME) countries. The paper documents positive causal impacts of internet availability on the probability of employment, labor force participation, and falling poverty rates. The paper provides the following new findings. First, the main constraint to the benefits arising from broader digitalization lies not in internet coverage but in too little uptake and use of internet and the range of productive technologies that are enabled by internet. The paper finds that SSA, followed by NRME, South Asia and NAfr regions have the highest uptake gaps in the world, namely the highest percentage of their populations that have no internet use even though they are covered by at least a 3G network. Second, on the demand side, the most important conditional correlates of low uptake and use include low affordability as reflected in low incomes, high data prices and higher income inequality, low capabilities as reflected in low levels of education and skills, low levels of other complementary assets (especially electricity), and low attractiveness as reflected in low perceptions of useful content. The paper finds evidence of a significant positive correlation between lower uptake and lower incomes, lower capabilities, and lower access to electricity. Third, on the supply side, given levels of demand, the offered variety, quality, and price of internet and enabled digital services are critically associated with the level of market competition. The level of competition, in turn, depends on the policy and regulatory frameworks that govern the evolution of these markets. The paper finds evidence of a significant negative correlation between uptake and the degree of concentration in the mobile market as well as the key regulatory variable of Mobile Termination Rates (MTRs). Finally, when explored in a joint regression framework that combines selected demand and supply-side variables, quantitatively the most important variable associated with internet uptake is affordability (proxied by GDP per capita), followed by skills and electricity. Regulatory stance also matters: the statistical significance of market concentration and not MTRs suggests that regulatory actions and timing, including how they affect the nature and sequencing of entry may be more important than policies focusing on MTRs. |
| Date: | 2022–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1549&r=ara |
| By: | Abeer Elshennawy (The American University in Cairo); Dirk Willenbockel (University of Sussex.) |
| Abstract: | Climate change is a reality in Egypt. Temperatures in Egypt have risen 0.34o C/Decade between 1961-2000. Climate change is likely to aggravate water scarcity problems, reduce agricultural yields and agricultural output as parts of the Nile Delta is threatened by inundation due to sea level rise. Reducing carbon emissions is thus essential. Utilizing an Intertemporal General Equilibrium Model, this paper investigates the effect of implementing a carbon tax on economic growth and consumer welfare. Alternative ways to recycle the tax revenue is also considered. The effect of the carbon tax on economic growth depends on the use of the additional tax revenue. If the revenue is used to fund additional government consumption or cash transfers to private households, the effect is mildly contractionary. If the revenue is used to reduce other tax rates in a way that stimulates additional investment, the carbon tax could have a positive impact on economic activity. The carbon tax has no discernible adverse effects on the distribution of household income. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1525&r=ara |
| By: | Rana Hendy (The American University in Cairo); Shaimaa Yassin (McGill University) |
| Abstract: | This paper contributes to the discussion on the restructure of workers’ time use -female workers in particular- as a result of COVID-19 and the subsequent impact this restructure might have on labor supplies. The subject matter of the study is hence to study the effect of COVID-19 on market and within-household labor supplies- namely for women who used to work before the outbreak of COVID-19 in Egypt which took place mid-March of the year 2020. To document and discuss the shifts in time use towards more home-based activities and implications such shifts might have on women’s market employment-related decisions, we construct time-use profiles using the newly collected time-use survey from CETUS20. The main findings of the paper show that workers in general – females with children in particular- have restructured their time use as a response to the COVID-19 health crisis. Longer hours on domestic work (housework and child-care), particularly with the closure of daycare services and educational institutions, have been the highlight for the surveyed females with children. The never-married working population allocated more time for paid work (both remote and on-site) compared to their ever-married peers. Regardless the marital status, women generally work less hours in the labor market than men; this gender gap in time spent on paid work is larger within the ever-married population, of around 100 and 70 minutes for the ever-married and never-married groups respectively. The paper’s analyses show as well that both the presence and the age of children significantly increases the women’s time allocated to child-care. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1565&r=ara |
| By: | Marwan Khawaja (UN-ESCWA); Jawad Al-Saleh (Palestinian Central Bureau of Statistics); Nathan Reece (ESCWA); Adriana Conconi (ESCWAOxford Poverty & Human Development Initiative (OPHI)) |
| Abstract: | Poverty is of particular concern to policy makers and international agencies in the context of Palestine because of the continued and increased hardship caused mainly by a prolonged colonial occupation. In this paper, we provide a multi-dimensional poverty index (MPI) for Palestine using data from the most recent Palestine Expenditure and Consumption Survey (PECS) survey conducted in 2016/2017. The sample design of this survey was proportional to population size including 3, 739 completed interviews and was specifically designed to provide requisite data for designing an MPI. The proposed Palestine MPI is unique in the region in at least two respects: it is rightsbased and includes monetary as well as non-monetary dimensions. It consists of 7 dimensions and 22 indicators, with the current monetary poverty line as one of the dimensions and indicators and the remaining non-monetary dimensions including education, health, employment, housing conditions, safety and use of assets, and personal freedom. The findings show that about 24% of the Palestinian population is multidimensionally poor. The incidence of poverty is four times higher in the Gaza Strip than in the West Bank. Significant differences in poverty are observed by place of residence, refugee status and household size. In terms of poverty composition, monetary poverty accounts for about 45% of overall poverty in Palestine. Education, employment, and housing conditions also have relatively high contributions to poverty – over 10% each. It is hoped that this index will be a useful instrument for monitoring poverty and informing public policy. |
| Date: | 2021–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1477&r=ara |
| By: | Adeel Malik (University of OxfordAuthor-Name: Chahir Zaki; Cairo University and Economic Research Forum) |
| Abstract: | This paper offers a simple analytical framework on the political economy of post-conflict reform in Arab societies. Highlighting the importance of temporality, we argue that policies towards postconflict reform need to be cognizant of how power was distributed prior to conflict, how the configuration of power shifts during the conflict, and what are the likely impacts of current policy interventions on future political equilibria. We also emphasize the need to recognize and address the multiple commitment challenges and coordination failures inherent in instituting post-conflict reform. Post-conflict institution building also ought to explicitly recognize the complexity and contradictions of the reform space, and the interests and incentives of various actors involved. This requires a shift of emphasis away from idealized institutional outcomes (e.g. elections, transparency, control of corruption, etc.) to intermediate processes. We conclude the paper by outlining the key features of macroeconomic policy reform in this brittle political economy context. In this regard, we highlight the need to avoid the time inconsistency problem where policies that are optimal in the short-run may not be perceived to be optimal in the long-run and therefore remain unimplemented |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1600&r=ara |
| By: | Samir Makdisi (American University of Beirut); Razan Amine |
| Abstract: | The paper analyzes Lebanon’s extraordinary economic breakdown of October 17, 2019 when the Central Bank suddenly imposed effectively de facto capital controls on Lebanon’s prevailing free foreign exchange market since its independence in the late nineteen forties. This action has since led to a major economic and financial crisis: the emergence of a parallel market with a depreciating pound, alongside a few additional official rates designated for particular transactions, rapid inflation, business closures, rising unemployment, deeply declining GDP, and an accelerating rate of emigration of professionals, among others. The paper analyzes the root causes of the crisis, its economic manifestations, and the failure of public and private sector responses during the follow up period through June 2022. It draws attention to three crucial aspects of economic and financial reform that Lebanon would need to implement to assure its sustained recovery. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1562&r=ara |
| By: | Ibrahim Alnafrah (Damascus University); Suliman Mouselli (Arab International University) |
| Abstract: | The external shocks narrative in the existing literature suggests that the underdevelopment of a knowledge-based economy in low-income countries is due to external shocks of an economic or political nature. This study aims to analyze the real causes that hinder the Syrian economy from transitioning toward a knowledge-based economy. We apply the Documentary Research Method (DSM) to analyze the existing literature of the external shock theory as well as studies that investigated the transition process toward a knowledge-based economy. We also apply the Structural Vector Autoregression (SVAR) to measure the impact of internal and external shocks on some innovation and knowledge creation-related variables. Our results indicate that, in the short and long run, external shocks do not provide a comprehensive explanation of the failure to build a knowledge-based economy in Syria. On the other hand, internal shocks, whether the shock of liberal policies or the internal conflict, provide better insights. The results also show that internal shocks in general and the shock of liberal policies in particular are largely responsible for Syria's failure in transitioning to a knowledge-based economy, and for the outbreak and development of the conflict. A set of economic policies were proposed for the reconstruction of Syria based on a non-classical approach that orients the reconstruction process toward building a knowledge-based economy and raising the pace of convergence with other countries in the region, whether in terms of digitization or changing the sectoral structure of the economy. |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1508&r=ara |
| By: | Linda Smail (Zayed University); Mouawiya Alawad (Zayed University); Wasseem Abaza (Zayed University); Firuz Kamalov (Canadian University Dubai); Hamdah Alawadhi (Zayed University) |
| Abstract: | Economic growth in most advanced countries is driven by small and medium-sized enterprises (SMEs), and most countries prioritize entrepreneurship for economic growth and innovation. This is very apparent in the United Arab Emirates (UAE), where an average of around 39 percent of adults want to start a business in the next three years. As such, entrepreneurial intentions have been a major area of focus in research, but they have always been studied using generic models. We use Bayesian networks as a relatively new technique to model entrepreneurial intentions as it provides an advantage over classical methods. Using the theory of planned behavior as a foundation, we conduct a cross-sectional study among a random sample of 324 Emirati university students in the UAE. We implement unsupervised structural learning within BayesiaLab using the SopEQ unsupervised algorithm to minimize the “minimum description length” score. Our model provides confirmation of and more robust statistical support for existing theoretical frameworks. It helps us find relationships among the different entrepreneurial factors and assess the effects of changes in these variables on intentions. One of the strengths of our study is the inclusion of attitudes toward entrepreneurship and self-efficacy variables. Accordingly, the main conclusion that can be drawn from our model is that entrepreneurial intentions are highly affected by attitude, self-efficacy, subjective norms, and opportunity feasibility. The results can be used by professionals for proposing new policies for university opportunities and government support. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1583&r=ara |
| By: | Bernard Hoekman (European University Institute) |
| Abstract: | Digitalization, along with the associated servification of economies, is both a driver and reflection of structural transformation. Digital technologies offer potential opportunities for Arab countries to diversify production and (intra-regional) trade, including complementing revealed comparative advantages in travel and transport services, enhancing participation in extant manufacturing value chains, and enhancing resilience to international shocks. Harnessing digitalization opportunities is conditional on an institutional and regulatory framework that supports access to and use of digital technologies and market platforms by micro, small, and medium-sized enterprises (MSMEs). The track record of exports of nontravel/transport services of many Arab countries is very heterogenous. The high service export growth rates for some countries demonstrate the potential that exists. However, the lack of dynamism in other Arab countries, despite proximity to large markets, suggests greater focus is needed on putting in place a supportive policy environment. Growth in digital trade is conditional on satisfying regulatory standards for data protection and the provision of services and digital products. Countries in other regions are actively pursuing digital trade cooperation, complementing trade agreements that encompass service trade and investment, and engaging in discussions on e-commerce, service regulation, and MSMEs. Many Arab countries have neglected services trade liberalization and are not engaged in international discussions to define good regulatory practices for the digital economy and identify measures to facilitate and support digital trade. This lack of attention may reduce the prospect of capturing digitalization opportunities. |
| Date: | 2021–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1484&r=ara |
| By: | Reham Rizk (Universities of Canada in Egypt) |
| Abstract: | The interaction between the pandemic, school closures, and the digital divide further contributed to inequality in education in Jordan by making it harder for children belonging to poor families to break the intergenerational transmission of inequality. This paper makes use of the ERF COVID-19 Monitor Survey for Jordan to assess the prevalence of the various learning methods used during school closures and the difference in the characteristics of individuals using each method (gender, place of residence, parents’ education and employment, and household income) using a probit model. The paper finds that low household wealth and parents’ education are more likely to limit students’ ability to use online education, books, and written materials, or receive any family help. In-person education is more common among Jordanians, the unemployed or those out of the labor force, and those with less educated parents. The COVID-19 outbreak shed light on the importance of tackling the issue of the digital divide. Government efforts should be directed toward investing more in information and communications technology (ICT) infrastructure to be conducive to teaching and learning. In addition, these efforts should also aim to formulate ICT literacy programs to train adults to use the Internet and access children’s e-learning platforms to potentially help them with their schoolwork. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1597&r=ara |
| By: | Sarah El-Khishin (The British University in Egypt); Mohamed Rashwan (The British University in Egypt) |
| Abstract: | The Egyptian housing market is a very dynamic market and has many interactions with monetary and financial markets in the economy. In this paper, we investigate the macro-financial fundamentals, institutional as well as specific behavioural and cultural factors that are argued to play a role in housing demand and prices in Egypt. We design a field survey for a representative sample of household homebuyers and sellers as well as real estate developers and brokers. We then run an Ordinal Logistic Regression Model (OLM) based on the results of the field survey and a constructed housing price index. Analysis reveal many important findings, firstly, land construction and licensing costs, government real estate and housing policies are all perceived as main determinants of housing prices in the Egyptian market. On the contrary, macro-financial variables, namely inflation and interest rates were not significant indicating a possibly weak monetary transmission mechanism through the theoretically explained asset-price channel. Results also affirm that housing investment is perceived by Egyptians as the safest form of investment during uncertainty shocks and good hedge against inflation and other financial turbulence. Finally, findings reveal a huge discrepancy in information and data on housing dynamics and expectations across the sampled groups, households and Developers & Brokers. Lack of information makes market actors more vulnerable to principal-agent problems and result into asymmetric information moral hazard outcomes. The above results altogether reinforce the importance of constructing a micro dataset on housing prices in Egypt and constructing a housing price index for the Egyptian market as was initiated in this research and planned to be further developed in future research. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1603&r=ara |
| By: | Amira Elayouty (Cairo University); Hala Abou-Ali (Cairo University); Ronia Hawash (Butler University) |
| Abstract: | Children’s nutritional status is expected to be negatively impacted by global climate change given their relative vulnerability to food insecurity shocks. The developing countries in Africa are relatively even more vulnerable to these negative impacts. This study investigates the impact of climate change on the geographical variation of the prevalence of stunting among children under the age of five in the Nile basin region using the Demographic and Health Surveys of the three countries Egypt, Ethiopia and Uganda. Survey data is spatially and temporally merged with high resolution climate change datasets to investigate whether and how the change in temperatures and precipitation has an influence on children’s malnutrition. The prevalence of stunting among children under five years of age and its socioeconomic determinants are modelled using Bayesian geospatial regression model. The prevalence and determinants of stunting varied across Egypt, Ethiopia, and Uganda. The result of this paper highlights the fact that social policies and public health interventions targeted to reduce the burden of childhood stunting should consider geographical heterogeneity and adaptable risk factors. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1613&r=ara |
| By: | Racha Ramadan (Cairo University) |
| Abstract: | Income inequality is relatively low in Jordan when measured using the Gini index, which is the common inequality measure. However, other income inequality measures show higher levels of inequality, as the pre-tax national income share of the highest ten percent was more than 40 percent in 2016. Additionally, income inequality is expected to increase with the spread of the COVID-19 pandemic and the slowdown of economic growth. Thus, understanding income inequality and its main drivers is key to addressing it adequately and achieving inclusive growth where no one is left behind. The present paper tackles expenditure inequality in Jordan as a proxy for income by examining the main drivers of the expenditure gap between urban and rural areas and between female-headed households (FHHs) and male-headed households (MHHs) using the most recent available Households Expenditure and Income Survey (HEIS, 2017/2018). Using an Unconditional Quantile Regression (UQR), gender expenditure inequality and spatial expenditure inequality are decomposed into endowment and returns effects. The results show that the spatial expenditure gap is in favor of urban areas, and the gender gap is in favor of FHHs. The education of household heads and the geographical location of households are the key determinants of expenditure gaps between urban and rural households and between FHHs and MHHs. |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1513&r=ara |
| By: | Adel Ben Youssef (University of Côte d’Azur) |
| Abstract: | The role of non-governmental organizations (NGOs) in climate policy and the green transition (conservation of biodiversity, energy transition, climate change) is becoming increasingly important worldwide. This paper examines the contribution of NGOs to drafting and implementing climate policy in Tunisia, engaging in climate negotiation processes and activities, and formulating effectiveness criteria related to climate change lobbying at the local, national, and international levels. First, we show that improved working conditions have a positive effect on NGO involvement in climate change actions. Second, greater professionalism has a substantial effect on Elaboration Resilience 2050, Elaboration of a Low Carbon Economy 2050, and climate change training, whereas the effect of the Conferences of the Parties (COPs) is marginally negatively significant. Third, exclusion from the drafting of government laws is a major determinant of involvement in climate change actions. Fourth, NGOs which cooperate with the government and receive funds from international organizations are more likely to be involved in climate change actions, climate policy, climate negotiations, and NGO projects. Fifth, NGOs working on project implementation do not have sufficient resources to undertake several activities simultaneously. Sixth, budget increases and the number of funding sources seem to be positively correlated to engagement in policy changes/negotiations and the implementation of climate projects. |
| Date: | 2021–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1519&r=ara |
| By: | Randa Alami (Economic Department, SOAS) |
| Abstract: | This paper reviews the impacts of COVID19 on health policies in the Arab region, benchmarking them against progress towards Universal Health Coverage (UHC). UHC aims to provide Access to Acceptable Affordable Quality Care for all, which is now endorsed as a key pillar of Sustainable Development Goals regionally and globally. Before COVID19, despite some progress, most countries displayed deficient and maldistributed health structures and provisions, and pernicious inequities in health outcomes and access to healthcare, reflecting systemic gaps in health coverage and financial risk protection. The transition towards fairer health financing mixes is lagging, with protection tilted towards richer quintiles and the formal sector. Large swathes of its population still shoulder one to two thirds of health spending from their own pockets. These swathes are concentrated among the poor and informal sectors, highlighting the link between health equity, social protection, and labour market vulnerabilities. These fault lines amplified the impacts of the ongoing complex global emergency, with large proportion of the populations battered by increased poverty, trapped in systemic precariousness and informality, and unable to access or afford decent health care. Thus the “new normal” may well be about recognizing that the “old normal” has reached its limits. “New normal” in policies need to include: speeding up the institutional prerequisites for UHC, particularly in financing mixes and supportive digitised information systems; addressing health equity more bluntly; tapping existing national wealth explicitly; and embracing more redistributive and progressive policies. Without these steps, both recovery and reintegration in the world economy will be compromised |
| Date: | 2022–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1537&r=ara |
| By: | Bassam Yousif (Indiana State University); Omar El-Joumayle |
| Abstract: | In this paper, we apply institutional approaches to understand the economic and social contexts of the protests that took place in Iraq in 2019 to 2020. We use the World Bank’s World Governance Indicators as well as other data to show that political institutions that were established post 2003 have impeded economic development. We study how Iraq’s political settlement along with its already deteriorating economic institutions and unfavorable economic and social conditions have combined to shape poor economic outcomes. That is, increased political openness and inclusion has not resulted in greater economic inclusion; instead, Iraq’s political institutions likely have worked to constrain economic inclusion and a more egalitarian distribution of oil income. We thus offer policy recommendations that include a proposal for (limited) basic income scheme to distribute Iraq’s oil rents. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1563&r=ara |
| By: | Asli Dolu (Izmir Bakirçay University); Hüseyin Ikizler (Ostim Technical University) |
| Abstract: | This study focuses on the impact of earthquakes on the labor market. We try to estimate the impact of two major earthquakes (Izmir and Elazig) in Turkiye. We consider the earthquakes a natural experiment and employ a synthetic control method using data from TURKSTAT and ISKUR. The results show that the impact varies based on the labor market structure of the regions. While the earthquake positively affects the labor market of agriculture-oriented regions, it harms the labor market of non-agricultural-oriented regions. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1571&r=ara |
| By: | Ehsani, Afsaneh; Jaghdani, Tinoush Jamali; Götz, Linde |
| Keywords: | Food Consumption/Nutrition/Food Safety, Food Security and Poverty |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi22:329614&r=ara |
| By: | Ali Taher Al-Hamoud (alitahernaser@hotmail.com); Ahmed Qassem Moften |
| Abstract: | The issue of youth occupies a central place in development priorities and strategies. It is the issue that most intersects and converges with all the issues of society in its present and future. In Iraq, the youth group was among the groups most affected by the conditions of crises that Iraqi society was exposed to, as it bore for long periods the burden of wars, conflicts and violence, and it also entered the predicament of unemployment. Despite the clear growth witnessed by efforts concerned with youth during the past two decades, youth empowerment projects and their inclusion in development processes remained negatively affected by societal changes and transformations that were reflected in the results on the levels of government awareness, the awareness of civil society organizations, and large sectors of youth themselves, which requires an appropriate pause and efforts. A national and international collective explores the depths of this transformation and contributes to the empowerment of youth and serving their causes. Their problems, aspirations, sources of anxiety and frustration, their outlook on the future and their positions on basic issues such as security, participation, communication, media... etc. These topics, in addition to their knowledge value, can form a basis for understanding the youth in Iraq. The current study aimed to identify the vision of Iraqi youth for their country, to reveal their grievances and their economic and social aspirations, and to know their attitudes and opinions about the nature of the political process and its mechanisms, joints and components, whether it was their evaluation of the experience or their aspirations to develop it, as well as its attempt to discover the similarities and consistency in their views about the Iraqi past and present. |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1598&r=ara |
| By: | Adel Ben Youssef (University of Côte d’Azur) |
| Abstract: | Adoption of digital technologies has accelerated largely in the last decade and has reached a critical stage today. The rapid diffusion of digital technologies has fostered the use and exploration/exploitation of new possibilities based on the internet. Therefore, this paper discusses the current state, main opportunities and challenges of digital transformation in Tunisia. First, it relies on up-to-date information to describe the current diffusion and use of digital technologies in Tunisia. This would allow a better understanding of how infrastructure, equipment, access and use of these technologies are diffusing among the population. Second, it takes account of the effect of the COVID-19 pandemic on how the use of digital technologies is developing and to what extent the pandemic has fostered or hampered the digital transformation in Tunisia. Third, most of the existing literature describes digitalization and its impacts without offering clear explanations related to the prerequisites for full exploitation of the potentialities of the technologies in an inclusive manner. Fourth, we examine the prerequisites for reaping digital dividends and moving toward building new jobs and skills, the change of organizational practices and towards safe, secure digital technologies. |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1512&r=ara |
| By: | Amirah El-Haddad (German Development Institute); Chahir Zaki (Cairo University) |
| Abstract: | The COVID-19 outbreak has had severe economic consequences across the globe. The crisis emanating from the pandemic has caused demand and supply side shocks, which are more far reaching than any crisis in living memory. We use a new data set from the 2020/21 Egyptian Industrial Firm Behavior Survey (EIFBS) to examine determinants of firms’ resilience during the COVID-19 pandemic. Crisis present the opportunity for what Schumpeter (1934) called creative destruction. Have manufacturing firms been all hit by the crisis equally, or were less efficient firms more likely to exit or downsize their activities thereby ‘cleansing’ the market? Two sets of factors affect firm dynamics and survival: 1) firms’ innate characteristics, such as formality and export status, sector, ownership, age, size and location and; 2) firm behavior which captures the extent to which good managerial practices, innovation, the adoption of advanced technologies and worker training have provided an opportunity for firms to adapt their business models and show greater resilience in coping with the crisis. Our main findings illustrate the vulnerability of private, smaller, informal firms and those that are not located in industrial zones. Also, as expected, preCOVID behavioural characteristics matter for firm dynamics. The food sector and sectors identified as ‘COVID sectors’ show more resilience. More nuanced results show that the effect of some behavioral traits vary by sector and are more influential depending on firm size. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1586&r=ara |
| By: | Nada O. Eissa (Georgetown University); Hamid Eltgani Ali (School of Economics, Administration and Public Policy) |
| Abstract: | It is fitting that the modern history of Sudan is tightly intertwined with the call for federalism, starting with the Southerners' push for regional autonomy since independence. In this paper, we examine the design and practice of one dimension of federalism – the ability of citizens to govern their fiscal affairs at the local level and how the central government designed and implemented fiscal relations with the states, focusing largely on intergovernmental transfers over the past decade. We documented the evolution of the institutional framework and fiscal trends over several decades. Severe fiscal fragility meant that transfers to states varied substantially over time and heavily oil exports facilitated higher transfers, the loss of the South sharply curtailed them. The study shows the underlying differences in standards of living across states to set the scene for understanding the distribution per-capita transfers. The results suggest that the current system in Sudan does little to offset existing inequities across states and may exacerbate them. If fiscal federalism is to support the rebuilding of the state in Sudan, it must address disparities and empower citizens to engage in determining their local public choice of taxing and spending.Length: 46 |
| Date: | 2022–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1596&r=ara |
| By: | Amirah El-Haddad (German Development Institute); Chahir Zaki (Cairo University, EMNES and ERF) |
| Abstract: | We use data from the 2020/21 Egyptian Industrial Firm Behavior Survey (EIFBS) to assess the effects of the COVID-19 crisis on firm dynamics, behavior and performance. The crisis emanating from the COVID-19 pandemic induced both demand and supply side shocks, which are more far reaching than any crisis in living memory. Our results show that the crisis has hit the entire Egyptian manufacturing sector. But, in line with Schumpeter’s (1934) creative destructive theory, the market shows signs of ‘self-cleansing’, whereby the less efficient are more likely to exit and downsize their activities. Our descriptive results show resilience of larger, public, formal, and export sector firms. Thus, revealing pre-existing fragilities of the private, informal and, more generally the lower productivity firms in the manufacturing sector. The counter cyclicality of the relation implies that contraction of the formal sector expands the informal as the only alternative way to earn a living. As a ‘survival sector’, the informal sector has provided 'helping hand employment'. Pre-crisis good managerial practices, innovation, the adoption of advanced technologies and training workers all provide an opportunity for firms to adapt their business model, as reflected by superior firm dynamics and post-crisis performance. Larger firms and mostly less vulnerable sectors such as fabricated metals and rubber have had more access to government support. It is likely that the government has chosen to support sectors with potentially better chances of survival rather than support the most vulnerable. Firms in pharmaceuticals were also recipients of support, which is sensible in a health crisis. |
| Date: | 2022–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1530&r=ara |
| By: | Safaa El Tayeb El-Kogali (World Bank); Tanya June Savrimootoo; Kebede Feda; Dmitry Chugunov |
| Abstract: | The global learning crisis has, rightfully, taken center stage over the past few years, with an increasing focus on supporting policies aimed at improving learning outcomes. However, the COVID-191 pandemic has led to extended school closures worldwide, forcing over 1.8 billion children out of school, and in many cases, with limited access to effective remote learning. School closures in Sudan have led to concerns about the potential long-term learning losses this may entail for several generations of children. For Sudan, the challenge is formidable. The country has undergone a popular revolution to overthrow a 30-year old dictatorship amid worsening macroeconomic conditions. Taking over in September 2019, the Transitional Government introduced an ambitious education reform agenda, with policies that, if fully implemented as intended, may have a significant impact on improving learning outcomes for all. This paper simulates the potential impact of both COVID-19 related school closures as well as the intended policy reforms on learning outcomes and equity. We simulate the effects of these shocks under different assumptions, including the likely duration of school closures, and effectiveness of remote learning solutions adopted by the Government, as well as education financing levels and the capacity of the Government to fully implement the policy reforms. Given equity concerns around the potential COVID-19 impact, we also consider the effects on children from households within different wealth quintiles. The findings show that school closures may have devastating impacts on learning outcomes, especially for children from poorer families. However, the simulations also indicate that the policy focus of the education reform agenda, as well as the stated commitment to increase education financing, have the potential to mitigate short-term learning losses due to COVID-19 and significantly improve learning over time. The findings suggest that increasing education budgets and implementing key reforms will be critical to rebound from the effects of COVID-19 in the short- to medium-term. |
| Date: | 2021–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1507&r=ara |
| By: | Amal Medini (University of Tunis); Chaima Ben Abderrahmen (University of Tunis); Leila Baghdadi (University of Tunis) |
| Abstract: | The COVID-19 pandemic significantly disrupted trade flows between countries, thereby revealing the vulnerability of global value chains. This unexpected event sparked a public debate on devising new policies to increase the resilience of value chains. This study identifies vulnerabilities related to supply chains with a specific focus on Tunisian imports during the period 2019-20. To this end, we select three potential drivers of import vulnerability based on post-pandemic reports and discussions and assess their impact on Tunisia’s overall imports using a quantitative analysis. For each product, we consider: (1) the market concentration of Tunisia’s suppliers, (2) the intensity of imports, and (3) COVID-19 products – that we call ‘essential products’ – as a potential source of import vulnerability, the impact of which we assess separately. These factors are country-specific product characteristics. Then, we identify a model based on a first differences estimator to assess the impact of the change in vulnerable imports on the change in total imports at the country-month and country-quarter levels using import data for the period 2019-20. Finally, we use input-output linkages to assess the level of exposure of Tunisia’s local industries to vulnerable supplies from partner countries through a downstream propagation approach. This framework will help us get insights into Tunisia’s most sensitive imports and industries. |
| Date: | 2022–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1531&r=ara |
| By: | Faris K. Nadhmi (Iraq University); Mazen Hatem |
| Abstract: | The protest wave that started on October 1, 2019 and then renewed with greater momentum on the twentyfifth of it in Baghdad and the governorates of the south and the middle Euphrates in Iraq, but constituted a decisive moment of protest in its intensity, momentum and sacrifices to bring about political change, in comparison with other waves that preceded it since 2010. The current field study sought to test four basic hypotheses by researching the phenomenology of the October protest, i.e. showing the patterns of political perception among the protesters, assuming that an essential part of the dynamics of revolutionary protest can only be understood or diagnosed in the light of the people's subjective perceptions. The study sample consisted of (1020) male and female protesters from Tahrir Square in Baghdad, who were interviewed in the field during the period from October 25 to November 17, 2019, using a questionnaire consisting of an informational introduction on the socio-economic backgrounds of the protesters (10 items), followed by (24) closed-ended questions with limited options, and (4) open-ended questions. Thus, the qualitative and quantitative methods were mixed, and statistical techniques were used to investigate the hidden implications arising from the dialectical relations between the categorical backgrounds of the protesters and their perceptions, attitudes and expectations. In its final analytical whole, the study concluded a complex set of conclusions, the most prominent of which was the remarkable rise in the educational level of these protesters, and that they represent the youth group at a high rate, but they suffer from absolute deprivation represented by a sharp rise in the rate of poverty and unemployment, and from severe economic deterioration on the individual and family levels. In comparison with the average economic conditions for the whole of Iraq, their conditions decline by rates ranging between double and triple. In addition to this absolute deprivation, their level of relative deprivation rises to a similar degree, and this means that their deprivation was a compound in which absolute deprivation is mixed with relative deprivation. As for the protest goals, it became clear that their goals of a comprehensive and radical nature (I want a homeland / fighting corruption / changing the political system) are superior to the rest of their goals of a partial reformist nature (improving services / getting my share of oil / reforming the government / getting a job/ entering the green zone). The study also concluded to prove its four hypotheses that the October protests emerged from the influence of a deep existential youth trend in which nationalism interacted with class egalitarian tendencies, and that it is a structural and functional link with the protests that preceded it. Al-Salami” is a far-reaching cognitive-behavioral strategy taken by the October protesters collectively to draw a line between the identity of the protestors and the identity of the authority without overlapping. A new fifth hypothesis was also added, derived from the results of the study, confirming the existence of a clear differentiation in the perceptions of the protesters between social religion as an individual's ideological, value and behavioral choice, and political religion as an authoritarian structure that produced conditions worthy of rejection, protest and change to the point of desperation from their point of view. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1587&r=ara |
| By: | Jaime de Melo (University of Geneva, FERDI and CEPR); Jean-Marc Solleder (University of Geneva) |
| Abstract: | The paper focuses on two challenges of digitalization for structural transformation in MENA and SSA, one particularly relevant for SSA countries, the other for MENA countries. For SSA on the way to account for half of the growth in the global labor force over the first half of the 21st century, the most pressing challenge is that automation presents a threat for employment. Digital technologies (digitech) could rob SSA from its demographic dividend enabled by rising wages in China. For MENA countries where manufacturing has largely failed to take off, the digital transformation where ‘value creation shifts from capital to knowledge’ presents an opportunity for structural transformation. Successful digitalization would then allow MENA countries to achieve a service-sector led high-productivity growth structural transformation. For countries in both regions, improving digital skills to close the growing digital gap will be necessary. Digitalization is only starting across developing countries and is barely visible in the data and estimates reported in this paper. The paper covers evidence on three aspects of digitalization. First, disparities in digitalization across countries in both regions may be increasing in a digital world increasingly data-driven. New technologies entering the exports of firms participating in GVCs present a threat for low-income countries through two channels. First, the new technologies are biased towards skills and other capabilities, reducing the comparative advantage of unskilled labor-abundant countries, like those in SSA. Second, this bias makes it harder for low-income countries to offset their technological disadvantage with their labor-cost advantage. Next, the paper documents the weak performance of services in SSA and MENA, a sector that has become the engine of structural transformation. SSA and MENA stand out for having registered the slowest average labor productivity growth in services across regions over 1995-2018. Great differences in the state of national data infrastructures are observed across both regions, a signal that many countries are not ready for cross-border e-commerce, an essential ingredient of the digital transformation. It reports on firm-level evidence establishing causality between exports of software-intensive services exports and the quality of data infrastructure. Third the paper shows that trade costs have remained higher and participation in supply chain trade lower than in most other regions. New econometric estimates suggest that an increase in telecom subscriptions is associated with a direct elasticity of GVC participation of 0.4 and an indirect effect of 0.25 through a reduction in trade costs. In sum, ‘this time may be different’ because the labor displacement effects of automation may not be accompanied by reinstatement effects observed during past episodes of widespread technological change when jobs were created to implement the new technologies. The complementarity between humans and machines observed in previous spells of technical progress may be threatened by the continued growth in automation and robots. MENA and SSA countries should also prepare for regulation of cross-border e-commerce by, among others, weighing the costs and benefits of data localization measures that can provide consumer protection and give an advantage to local firms. For African countries engaged in the AfCFTA, negotiations on protocol for e-commerce in phase III provides a unique opportunity for African countries to collectively establish common positions in e-commerce that would help guide their structural transformation. |
| Date: | 2022–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1547&r=ara |
| By: | Amirah El-Haddad (German Development Institute); Chahir Zaki (Cairo University) |
| Abstract: | The COVID-19 pandemic saw two sets of policy responses: lockdown to limit spread of the virus, which was a huge demand and supply shock, and government support to firms and individuals to offset the effects of this policy-induced shock. This paper explores the allocation and effectiveness of government support to firms in Egypt. We consider both financial support measures which were by and large already being implemented pre-COVID, as well as tax- and loan-related exemptions and deferments. Our main findings show that government support has helped mitigate the effects of COVID-19, with a significantly larger, favorable impact on smaller, younger and private firms. However, although these firms apparently make better use of government support, they receive a disproportionately smaller share of it. In line with the emerging ‘unsocial’ social contract, government support has been chiefly determined by political connections and a captured industrial policy. This ‘misallocation’ reinforces the missing middle phenomenon which acts as a constraint as SMEs are unable to grow. Finally, to control for the endogeneity of support, we use an instrumental variable approach and a propensity score matching. Our results remain globally robust. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1573&r=ara |
| By: | Bassam Yousif (Indiana State University); Omar El-Joumayle; Jehan Baban |
| Abstract: | This paper utilizes research on Water-Energy-Food (WEF) nexus to study the relationships between Iraq’s water (requirement and supply), energy (the oil and gas sector), and food production. We survey environmental conditions and note that the quality and availability of water have declined over the last decades, which have posed threats to public health, environmental sustainability, and food security. We next use a variety of data sources to study the interlinkages between these three sectors, including water-energy-food indexes, and explore the state of the agriculture and oil sectors. We point out that water is a key input into both agricultural production and oil extraction, mediating the energy and food sectors and acting to constrain and make rival food and energy outputs. We offer policy recommendations classified into those that seek to overcome internal barriers and others geared towards external constraints. |
| Date: | 2022–08–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1564&r=ara |
| By: | Daniel Silverman; Karl Kaltenthaler; Mujtaba Ali Isani |
| Abstract: | Why do people support—or refrain from supporting—nonviolent protests for political change? The literature offers different answers to this question, but one variable that has received little attention is fears of protest unleashing violent conflict. This is surprising given that protest movements often emerge in insecure societies—from Iraq to Pakistan and Algeria to Myanmar—that have experienced or are at risk of experiencing large-scale civil strife. |
| Keywords: | protest, Nonviolene, Conflict, Fear, Iraq, Violence |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp-2022-168&r=ara |
| By: | Rashid Hassan (University of Pretoria); Hassan Abdelnur; Ismail Elgizouli; Yasir Khairy |
| Abstract: | Ensuring sustainability is about protecting the rights of future generations in natural wealth endowments, which include in addition to stocks of resource assets (minerals, land, water, forests, wildlife, etc.), a healthy environment and functional ecosystems. Prudent use of the proceeds from liquidation of natural assets and protection of environmental quality and ecosystems health, are therefore necessary for inter-generational equity. At the same time, consequences of depletion of natural assets and environmental degradation are not equally shared among different regions and social groups, with the least fortunate and more vulnerable bearing the largest burden. Such intragenerational inequities, in turn threaten sustainability. This illustrates how equity and sustainability are interlinked in the dynamics of natural and human systems’ interactions. This paper is an attempt to contribute to an improved understanding of how human and natural systems interact in shaping livelihoods and environmental conditions in Sudan. The paper analyzed the natural, institutional, and socioeconomic contexts and policy environments within which the transitional period administration in Sudan is to design its reform strategies and implement programs for prudent environmental management and equitable distribution of the benefits from exploiting the country’s natural wealth. Our analysis focused on identifying major challenges to pursuing the goals of inclusive and sustainable development and propose intervention measures necessary to address them |
| Date: | 2022–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1550&r=ara |
| By: | Nada Mustafa Ali (University of Massachusetts Boston); Sawsan Abdul Jalil (University of Khartoum, Sudan); Naglaa Abdulwahid (South Kordofan and a Farmer and a Member of SPLM-N Peace Delegation, Sudan); Mai Azzam (University of Bayreuth, Germany); Asja Abdelmoniem (Port Sudan Teaching Hospital, Sudan) |
| Abstract: | Women’s participation in Sudan’s 2018/2019 uprising has shed light on the social, economic, cultural, and political roles women played and continue to play in Sudan. This participation is n ot unusual given that women have always been active in Sudan’s politics and society and given an ancient history of women’s leadership and rule. An important outcome of the uprising is that it has (re)invigorated women’s and feminist activism and theorizi ng. It ushered a commitment, at least at the level of discourse, among many self identified feminists and women activists and organizations, to understanding and engaging with the theory of intersectionality. This paper, which uses an intersectional persp ective, draws on interdisciplinary, collaborative field research which took place in 2021 in three states in Sudan. The paper documents and analyses the experiences of self employed women street vendors in Khartoum and Port Sudan, and women farmers in Sou th Kordofan. The paper documents ways in which these groups of women contributed to sustaining protestors in Sudan during the uprising, and the ways they continue to sustain communities across Sudan, through a politics of care. The paper also analyses soc ial protection programs that the Transitional government which assumed power in 2019 introduced, particularly the Family Support Program. The visions and perspectives of marginalized communities, including women street vendors and farmers, should inform e fforts for social change and transformation. A policy brief which is partially based on the research that informs this paper, also prepared for the Economic Research Forum, makes further assess gender related policies during Sudan’s transition and makes re commendations on ways to achieve gender equality in Sudan. |
| Date: | 2022–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1574&r=ara |
| By: | Nils-Christian Bormann (Witten/Herdecke University); Ibrahim Elbadawi (ERF) |
| Abstract: | The signing of the Juba Agreement for Peace in Sudan (JAPS) constitutes an important step for the country to achieve lasting peace and complete its transition towards democracy. In this paper, we will review the JAPS in light of scientific evidence on the effectiveness of powersharing. Reviewing multiple studies that evaluate power-sharing, we conclude that a larger number of power-sharing provisions and the effective inclusion of previously marginalized ethnic groups increase the chances of peace. However, leaving out previously peaceful groups carries some risk. The beneficial effects of power-sharing provisions in peace agreements and ethnically inclusive governments pertain to the likelihood of democratic transitions. We find only weak evidence for the benefits of power-sharing in ensuring democratic survival due to the small number of post-conflict democracies that exist around the world. While the JAPS contains a reassuring number of power-sharing provisions and should be effective in bringing about stability and improving the chances of democratization according to the best available scientific evidence, much uncertainty remains. For Sudan to succeed in achieving lasting stability and effective democracy, political leaders will be required to respect the agreement and depend as much on positive background factors such as economic development outside the scope of the JAPS. To address these concerns, we propose five future initiatives: a national peace conference; a firm term limitation for the transitional authority; broad-based political parties and coalitions; a better institutionalized and sufficiently funded “Peace Fund”; and two national bargains in the critical areas of security reforms and transitional justice |
| Date: | 2021–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1490&r=ara |
| By: | Abderrahim Chibi (Maghnia University Center); Sidi Mohamed Chekouri (Maghnia University Center); Mohamed Benbouziane (Maghnia University Center); Hadjer Boulila (Maghnia University Center) |
| Abstract: | The topic of fiscal policy sustainability has received much attention during the last two decades, as budget deficits in developed and emerging countries have deteriorated. It is no coincidence that the sustainability of public debt became a specific research agenda in macroeconomics and public economics at around the same time. However, the literature lacks a clear consensus about the definition of public finance. In fact, many research papers introduce their own criteria for sustainability, with many similar (but not identical) elements. In this context, the concept of a debt ceiling, limit, or threshold complements debt sustainability analysis (DSA) exercises and gives a better sense of fiscal sustainability. It could be used as a starting point for determining the level at which it would be desirable to stabilize debt. Regardless of how the debt limit is derived, the debt anchor should not be set at this limit; instead, it should be utilized as a mechanism for self-insurance that provides a buffer against adverse macroeconomic and fiscal shocks (Eyraud et al., 2018). Those buffers should reflect the distribution of risks around the predicted debt trajectory (Fournier and Fall, 2015; Debrun et al., 2019). Accordingly, this study focuses on two main aspects of fiscal sustainability in Algeria. In the first essay, we use Ostry et al.’s (2010) “fiscal space and public debt limits” approach to analyze fiscal sustainability. We use Fully Modified Least Squares and threshold models to estimate the fiscal reaction function for Algeria between 1990-2020. Despite the efforts made to rearrange spending and income priorities, the descriptive and econometric results provide clear evidence of the fiscal fatigue state (loss of control of the debt growth) and the decrease in the fiscal space available in Algeria. The results also show the existence of a threshold level in the debt ratio (debt ceiling or fiscal cliff), approximately equal to 61.1 percent, above which Algerian fiscal policymakers are concerned with corrective actions to avoid insolvency. The second essay aims to analyze the relationship between public debt and economic growth and investigate whether a unique debt turning point (threshold) exists for Algeria. For this purpose, we use an innovative methodology: a regression kink with an unknown threshold (Hansen, 2017). The empirical results show a debt-to-GDP threshold of 31.9 percent for 1970- 2020. Our estimated threshold suggests that, in Algeria, debt-to-GDP ratios below 32 percent would boost economic growth by 0.13 percent, while any debt ratios above that threshold would harm economic growth by 0.06 percent. |
| Date: | 2022–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1540&r=ara |
| By: | Sara A. Hassanain (Former Acting Minister of Health, Sudan); Abdelhadi Eltahir; Lina I. Elbadawi |
| Abstract: | This study demonstrates that health and its system are dynamic and interlinked with social and economic sectors. The paper calls for reading health and its system beyond the standard economic development lens. Optimizing the health system legitimizes the entire state and is an essential pillar for state- and democracy-building in Sudan's transition and path ahead. The paper describes the current health system within the Sudan transition and dives into the historical background of the changes over time. It sheds light on the perpetuated gaps with highlights and analyses of the possible determinant factors and how to reform the health system within and as a component of state-building. It also examines various alternatives for addressing the health system crisis in Sudan in light of the current political instability and the lack of basic health service provision needs. Following a careful analysis, a set of context-specific recommendations with short- and long-term effects are provided. These recommendations are strategic and operational in nature. The strategic recommendations are political and developmental, focusing on developing policies that address the emergency and crisis at a national level with the involvement of all local sectors. The operational recommendations propose how implementation can occur most effectively. These sets of recommendations must operate in harmony and in close communication with the Ministry of Finance and Ministry of Health and other sectors that impact health by their nature, with the aim to generate results that are aligned with Sudan’s overall economic and developmental models of reforms to revitalize the health system and restore its functions comprehensively. The unified intellectual thread covering those topics emerges during reading. |
| Date: | 2022–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1554&r=ara |
| By: | Ibrahim Elbadawi; Abdelrazig Elbashir; Abdelrahman Osman; Amir Hamid Elobaid; Elfatih Eltahir; Alzaki Alhelo |
| Abstract: | The initial conditions of the Sudanese agricultural sector are quite dire. Despite more than half a century of several economic development plans and public policy initiatives all centered on transforming the sector, the country’s vast agricultural potential is far from realized. Notwithstanding sad past experiences, modernizing agriculture remains critical for promoting win-win solutions, and it must be the focal point of any serious transformational project for the Sudanese economy. The modern growth literature focusing on the process of catch-up growth contrasts between the growth processes of industry and agriculture. The overall evidence shows that poor countries with initially low productivity could grow faster and catch up with richer countries if they adopt growth-promoting policies and build the right institutions to allow them to absorb knowledge and learn from the technological frontier. Therefore, poorer economies can only grow faster than richer economies, conditional on their endowments, policies, and institutions (Rodrik, 2011). However, more recent evidence suggests that productivity in manufacturing tends to converge unconditionally regardless of the prevailing institutions or policy environment (Rodrik 2013). In the light of this evidence, it is natural to question whether the unconditional convergence property also extends to the agricultural sector (Ishac et al., 2013). |
| Date: | 2022–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:prr40&r=ara |
| By: | Ahmad Alawadhi (Kuwait Institute for Scientific Research); Mohammad Alali; Shaikha Al-Fulaij; Shaikha; Sulayman Al-Qudsi; Sulayman |
| Abstract: | Applying rich micro-level data for 2013 and 2020, this paper juxtaposes the living conditions and consumption profiles of foreign workers in Kuwait. It contributes to a growing literature on foreign workers by focusing on migrant workers’ consumption profiles and their heterogeneity following the COVID-19 income shock. The paper compares the 2020 income and consumption profile with that of 2013. Moreover, since foreigners represent the majority of the population, the paper inquires if the most commonly used consumption functions apply in the case of foreign households in Kuwait. Findings corroborate that the migrant community bore the brunt of the COVID-19 impact in terms of employment, earnings, and living conditions. Our research also corroborates that the consumption-income decisions of foreign workers in Kuwait are broadly congruent with Friedman’s permanent income hypothesis and that, for given income levels, consumption heterogeneity holds for foreign workers according to age cohorts, thereby giving some credence to the life cycle hypothesis. Finally, Kuwait’s foreign workers consume high proportions of their incomes derived from business activities, as opposed to workers whose incomes derive mainly from wages and salaries. For comparative purposes, the analysis is benchmarked against Kuwaiti households comprising citizens with more endowments, rights, and privileges, including ability to borrow to finance random consumption peaks. |
| Date: | 2022–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1534&r=ara |
| By: | Nada Ali (School of Oriental and African Studies, University of London) |
| Abstract: | Despite Sudan’s legacy of abrupt but successful popular uprisings, the country has failed to date to chart a path towards sustainable democracy. This paper seeks, through a review of Sudan’s contemporary political history, to understand the failures of successive democratic governments to pursue an effective program of nation building, ensure peace and move the country out of this dysfunctional cycle of long autocratic military rule, interrupted by popular uprisings and failed democratic transitions. Theoretical literature in this area is neither uniform nor discipline-specific. This paper uses insights from political science, sociology and economics to reach conclusions. Apart from economist who tended to focus on structural factors hindering political transitions (e.g. conflict and the relevance of oil rents) enough commentators agree that the kernel of the problem is the political elite, their decision making and behavior vis-à-vis pivotal national questions (See Khalid, 1990, De Waal 2015). We understand the relevant questions as including the conceptualization of national identity post-independence, the development of a coherent and effective citizenship construct, defining the relationship of the center to the periphery – in terms both of rights and obligations, understanding the regional and international forces affecting the internal politics in Sudan, Sudan’s position in the modern World and issues of justice and accountability for past wrongs. This approach subordinates the “economic” to the “political” in the sense that it treats the issue as a political problem which then generates economic effects such as economic stagnation, development impasse and clientelism and cronyism. We are also aware of the particular challenges facing Sudan by way of inheritance from the previous regime (See Elbattahani (2017)). These include a disintegrated state, ongoing conflicts, fragile state institutions and an ongoing economic crisis. However, if we are to learn anything from the brief periods of failed democratic rule in the 60s and 80s it ought to be that short-term solutions to long-term problems seldom work |
| Date: | 2022–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:erg:wpaper:1551&r=ara |
| By: | Hinrichsen, Simon |
| JEL: | N0 F3 G3 |
| Date: | 2021–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:108960&r=ara |