Economic Research Forum (ERF)

November

Accelerating Africa’s economic transformation

The Covid-19 pandemic is likely to exacerbate the move away from globalisation that began early this century and promote regionalisation around big economic blocs. This column, originally published at the LSE Business Review, explains how African countries have an opportunity to deepen regional integration and create their own value chains, transforming the raw materials that they have in abundance. Agribusiness could be as pivotal for Africa as coal and steel for Europe because of the benefits of food security and jobs for the continent.

Prospects for Sudan’s peace agreement in the shadow of the coup

The Juba Agreement for Power Sharing in Sudan (JAPS) signed in late 2020 raised hopes of ending almost two decades of internal armed conflict in Sudan, but the military coup of October 2021 has thrown doubt on whether the peace process can succeed. This column summarises research concluding that even without the coup, the JAPS alone would have been insufficient to bring peace and democracy to the country.

Getting the private sector to generate decent jobs in Arab countries

Formal private sector firms in Arab countries suffer from four overlapping labour market challenges: job creation, inequality, productivity and technology. As this column explains, proposed policy responses need to rise to the enormity of these challenges. They also need to take account of short-term interventions to address Covid-19, as well as medium and long-term solutions to structural problems.

MENA public healthcare systems: building resilience for future emergencies

The pandemic caught most countries in the Middle East and North Africa with underfinanced, imbalanced and ill-prepared healthcare systems. This column outlines what went wrong, the economic and health impacts, and the implications for policy. The authors conclude that together with a strong focus on building core public health functions, leveraging the power of data openness can help to promote the region’s recovery. It can also support resilient systems capable of responding to future health calamities arising from epidemics, wars and natural disasters driven by climate change.

Climate finance: poorer countries need it as a matter of urgency

Climate change will shrink the economies of rich, poor, hot and cold countries alike, and will make it more difficult and more expensive to raise the finance needed to decarbonise in the future. This column, which originally appeared on The Conversation website, argues that the cost of early action is far cheaper than the cost of delayed action. Mobilising climate finance is a win-win for both the developed and developing economies.

Energy subsidies: easy pickings for climate policy or political bombshell?

In the Middle East and North Africa, energy consumption is heavily subsidised, which has harmful environmental consequences. But reform of energy subsidies is politically difficult, not least because of limited government legitimacy and citizen distrust of authorities. This column argues for a new holistic approach to reform to account for the frail social contract that has prevailed for decades between elites and the broad population of the region.

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EU climate policy: potential effects on the exports of Arab countries

The carbon border adjustment mechanism aims to ensure that Europe’s green objectives are not undermined by the relocation of production to parts of the world with less ambitious climate policies – but it could impose substantial costs on developing countries that export to the European Union. This column examines the potential impact on exporters in the Arab world – and outlines possible policy responses that could mitigate the economic damage.

Financial development, corruption and informality in MENA

Reducing the extent of informality in the Middle East and North Africa would help to promote economic growth. This column reports evidence on how corruption and financial development influence the size of the informal economy in countries across the region. The efficiency of the financial sector in MENA economies reduces the corruption incentive for firms to seek to join and stay in the formal sector.

Green hydrogen production and exports: could MENA countries lead the way?

The Arab region stands at the threshold of a transformative opportunity to become a global leader in green hydrogen production and exports. But as this column explains, achieving this potential will require substantial investments, robust policy frameworks and a commitment to technological innovation.

Climate change threats and how the Arab countries should respond

The Arab region is highly vulnerable to extreme events caused by climate change. This column outlines the threats and explores what can be done to ward off disaster, not least moving away from the extraction of fossil fuels and taking advantage of the opportunities in renewable energy generation. This would both mitigate the potential for further environmental damage and act as a catalyst for more and better jobs, higher incomes and improved social outcomes.

Freedom: the missing piece in analysis of multidimensional wellbeing

Political philosophy has long emphasised the importance of freedom in shaping a meaningful life, yet it is consistently overlooked in assessments of human wellbeing across multiple dimensions. This column focuses on the freedom to express opinions, noting that it is shaped by both formal laws and informal social dynamics, fluctuating with the changing cultural context, particularly in the age of social media. Data on public opinion in Arab countries over the past decade are revealing about how this key freedom is perceived.

Child stunting in Tunisia: an alarming rise

Child stunting in Tunisia seemed to have fallen significantly over the past two decades. But as this column reports, new analysis indicates that the positive trend has now gone dramatically into reverse. Indeed, the evidence is unequivocal: the nutritional health of the country’s youngest citizens is rapidly deteriorating and requires immediate and decisive action.

Exchange rate undervaluation: the impact on participation in world trade

Can currency undervaluation influence participation in world trade through global value chains (GVC)? This column reports new evidence on the positive impact of an undervalued real exchange rate on the involvement of a country’s firms in GVCs. Undervaluation acts as an economy-wide industrial policy, supporting the competitiveness of national exports in foreign markets vis-à-vis those of other countries.

New horizons for economic transformation in the GCC countries

The countries of the Gulf Cooperation Council (GCC) have historically relied on hydrocarbons for economic growth. As this column explains ahead of a high-level ERF policy seminar in Dubai, emerging technologies like artificial intelligence, blockchain and robotics – what some call the fourth industrial revolution – present a unique opportunity for the region to reduce its dependence on oil and make the transition to a knowledge-based economy.

Shifting public trust in governments across the Arab world

The Arab Spring, which began over a decade ago, was driven by popular distrust in governments of the region. The column reports on how public trust has shifted since then, drawing on survey data collected soon after the uprising and ten years later. The findings reveal a dynamic and often fragile landscape of trust in Arab governments from the early 2010s to the early 2020s. Growing distrust across many countries should raise concerns about future political and social instability.

Corruption in Iran: the role of oil rents

How do fluctuations in oil rents influence levels of corruption in Iran? This column reports the findings of new research, which examines the impact of increases in the country’s oil revenues on corruption, including the mechanisms through which the effects occur – higher inflation, greater public spending on the military and the weakness of democratic institutions.




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