Economic Research Forum (ERF)

November

Did the Egyptian protests lead to change?

Egypt’s period of euphoria following the toppling of Mubarak in 2011 was followed by the sobering realities of the political transition process. This column reports research showing how a wave of dissatisfaction overtook the popular mood, providing support for the conservative backlash in the presidential elections of 2012.

Harnessing technology for export growth by small businesses

What policy actions can help small and medium-sized enterprises (SMEs) to enhance their integration into the global market for goods, services and ideas? This column outlines recommendations in a new book on the opportunities and challenges facing SMEs in developing countries, focusing in particular on the role of digital technology in supporting SMEs in Arab economies to export and grow.

Vocational training fails the cost-benefit test: evidence from Turkey

Rising unemployment in Turkey during the global financial crisis prompted the government to expand its provision of free vocational training. This column reports an evaluation of the newly introduced programme, which finds that the costs of training the unemployed exceeded the benefits.

Arab oil exporters: coping with a new global oil order

What are the implications of recent developments in global oil markets for the oil-exporting countries of the Arab region? This column outlines key issues discussed at an ERF conference hosted by the Arab Fund for Economic and Social Development in Kuwait in November 2017.

Effectiveness of export sanctions: evidence from Iran

Whether export sanctions are effective depends on their goal. This column highlights that if the goal is to reduce total exports of the targeted country, sanctions may be less effective as exporters can redirect their exports from one destination to another. But if the goal is to put pressure on exporters in the targeted country, then sanctions can be effective as exporters incur welfare losses while redirecting exports to new destinations.

From energy subsidies to universal basic income: lessons from Iran

In December 2010, Iran introduced an ambitious energy subsidy reform that combined large price increases for fuel with generous cash transfers. This column explains the key lesson: that despite severe flaws in the programme’s implementation, it is possible to reduce the distortions caused by cheap energy and offer citizens a minimum basic income that is not excessively harmful to work incentives.

Foreign investment and domestic production complexity in Turkey

Inflows of foreign direct investment can act as a catalyst for domestic firms to develop sophisticated manufacturing products, according to evidence from Turkey presented in this column. The authors conclude that investment promotion policies can play a key role in facilitating upgrading of the national production structure.

Arab development as freedom

There is widespread discontent and social unrest in the Arab world, a direct result of decades of failed economic and political transitions led by largely autocratic regimes. This column argues that economic development thinkers and practitioners need to present credible alternatives for a new Arab society that meets citizens’ aspirations and restores their essential freedoms.

Inflation targeting and exchange rate flexibility in Egypt

The degree of exchange rate flexibility within an inflation targeting framework matters in emerging economies. This column reports research that quantifies the impact of different approaches to the conduct of monetary policy on inflation and output variability in Egypt.

Policies to reduce air pollution in Cairo

Vehicle exhaust fumes are a major cause of air pollution in megacities like Cairo. This column outlines the policies that the Egyptian authorities have introduced in an effort to cut emission rates and raise the costs to users of polluting vehicles. Air pollution has been reduced but much remains to be done, notably investing in an effective public transport system.

Return migration and gender norms: evidence from Jordan

Migration can be responsible for the spread of new social norms about gender roles. This column explores the impact of temporary migration from Jordan to more conservative and highly unequal neighbouring countries. The results indicate that women in households with a return migrant become more conservative themselves.

Lebanon’s challenge of fiscal sustainability

New legislation by the Lebanese government, which provides a big boost to the salaries of public sector employees, puts considerable pressure on the country’s public finances. This column outlines the potential impact on inflation, interest rates, the balance of payments and the exchange rate – and the kind of austerity measures that are needed to restore fiscal sustainability without too much damage to potential economic growth.

Does political conflict hurt trade? Evidence from consumer boycotts

The use of trade policy tools such as boycotts, embargoes and sanctions has become increasingly prevalent in international conflicts. This column reports research that examines the impact of politically motivated consumer boycotts on trade relations. The two examples are conflicts between China and Japan; and between Denmark and the Muslim world.

Housing policy and marriage: evidence from Egypt, Jordan and Tunisia

At a time when young people in MENA countries face an increasingly protracted and difficult transition to adulthood, how can housing policy help them to marry and form independent households? This column explains how reforms to the rental housing market in Egypt helped to reverse a trend towards later marriages.

Air pollution and infant mortality: evidence from Turkey

The widespread replacement of coal with natural gas as Turkey’s key energy source over the past 25 years has led to much improved air quality. This column reports research showing that the environmental benefits of the transition to natural gas have resulted in a significant reduction in infant mortality.

Growth without change: MENA needs structural transformation

Although the Southern and Eastern Mediterranean region had been enjoying a decade of relatively high growth just prior to the Arab Spring, the fruits of prosperity remained unequally distributed. This column examines countries’ inability to ignite structural change and start shifting their large and young labour force towards well-paid jobs in the key sectors of a modern economy.

Economic policy management: a new framework for MENA countries

There is a clear need for MENA countries to create policy frameworks that will improve the credibility and effectiveness of economic policy-making. This column outlines the main institutional weaknesses that must be addressed, and the six key elements of a well-structured framework for economic policy management.

Getting more women into private sector jobs

Two interconnected challenges for the Arab countries are how to increase the low participation of women in the labour market and how to reduce a longstanding reliance on the public sector as ‘employer of last resort’, especially for women. This column explains the economic benefits of removing impediments to women’s employment in the private sector.

Most read

Happiness in the Arab world: should we be concerned?

Several Arab countries have low rankings in the latest comparative assessment of average happiness across the world. But as this column explains, the average is not a reliable summary statistic when applied to ordinal data. The evidence from more robust analysis of socio-economic inequality in happiness suggests that policy-makers should be less concerned about happiness indicators than the core development objective of more equitable social conditions for citizens.

It’s too early to tell what happened to the Arab Spring

Did the Arab Spring fail? This column presents a view the consensus view from ERF’s recent annual conference in Morocco: careful analysis of the fundamental drivers of democratic transitions suggests that it’s too early to tell.

Arab regional cooperation in a fragmenting world

As globalisation stalls, regionalisation has emerged as an alternative. This column argues that Arab countries need to face the new realities and move decisively towards greater mutual cooperation. A regional integration agenda that also supports domestic reforms could be an important source of growth, jobs and stability.

Reformed foreign ownership rules in UAE: the impact on business entry

In an effort to stimulate economic growth and diversify the economy, the government of the United Arab Emirates has recently implemented regulatory reform that allows 100% foreign ownership of companies operating in the country. This column examines the implications of the reform for entry of new firms in Dubai, using unique data on new business licences in the emirate.

Self-employment in MENA: the role of religiosity and personal values

How important are individual’s values and beliefs in influencing the likelihood that they will embrace the responsibilities, risks and entrepreneurial challenge of self-employment? This column presents evidence from 12 countries in the Middle East and North African region on the roles of people’s religiosity and sense of personal agency in their labour market choices.

Gender differences in business record-keeping and planning in Iraq

Only one in every ten informal businesses in Iraq is led by a woman. Yet as research summarised in this column reveals, those businesses are more likely to set budgets and sales targets, and to keep business records. This may be evidence of the role of social exclusion in motivating greater reliance on the formal bureaucratic system.

Conflict and debt in the Middle East and North Africa

With the global economy is in its third year of deceleration amid declining inflation and oil prices, the Middle East and North Africa grew by just 1.9% in 2023, with a forecast for growth in 2024 at 2.7%. In addition to heightened uncertainty brought on by the conflict centred in Gaza, many countries in the region are also grappling with pre-existing vulnerabilities, including rising debt levels. This column summarises a new report that unpacks the nature of debt in MENA – and explains the critical importance of keeping rising debt stocks in check.

Making aid-for-trade more effective in the MENA region

Aid-for-trade represents an important opportunity for developing countries to enhance their trade capacities. But the positive effect of aid-for-trade on exports can hinge on the quality of institutions in recipient countries. According to research reported in this column, in the Middle East and North Africa, it is specific aid types – such as aid to support trade policy reform and aid to enhance productive capacities – that matter most for exports.

Sanctions and carbon emissions in Iran

How are Iran’s energy use and emissions of carbon dioxide affected by the imposition of economic sanctions? This column summarises new research that analyses a range of different scenarios and which takes account of multiple economic, social and environmental dimensions, notably what happens to growth and energy intensity, and whether sanctions are lifted.

Can a free trade area in services boost trade within the Arab region?

With trade in goods among Arab countries remaining modest, trade in services could play the pivotal role of an engine of growth in economic integration within the region, as well greater participation in global value chains. This column outlines progress to date and what needs to be done to make a success of AFTAS, the Arab free trade area in services.




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