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

Egypt’s care economy needs to address deteriorating working conditions

A robust and high-quality care economy is critical for supporting women’s employment – as both an employer of women and a mechanism for redistributing unpaid care work to the market. Yet in Egypt, despite national goals of expanding care services, employment in the sector has been shrinking, while becoming increasingly privatised. As this column reports, care jobs have also experienced worsening conditions of work, including reduced formality and the emergence of a pay penalty for care workers.

Unemployment among young women in GCC countries

The average rate of unemployment among young women in the high-income countries of the Gulf Cooperation Council (GCC) is far higher than the equivalent for young men. This column reports new evidence on the extent to which flexible labour markets, in the context of a generous social contract, can reduce female youth unemployment rates in the region.

Boosting trade through flexible rules of origin in preferential agreements

Rules of origin are critical components of preferential trade agreements designed to stop products coming in under insufficient transformation or through the partner that applies the lowest tariff. But in practice, these rules are often needlessly complex, undoing the benefits of market access associated with trade agreements. This column reports research showing that the adoption of more flexible product-specific rules of origin within preferential agreements would give a significant boost to global trade.

Challenges of GCC investment in the energy transition

The countries of the Gulf Cooperation Council (GCC) have identified the energy transition as a crucial area of growth and are investing heavily in a diverse array of projects. However, as this column explains, the region faces a number of challenges in making a success of these investments, most notably its current dependence on fossil fuels, a lack of infrastructure and technical expertise, the high upfront costs, and geopolitical tensions.

The decline of social insurance in Egypt: directions for reform

The longstanding challenge for the Egyptian economy of providing its workers with decent, formal, socially insured jobs has become even more difficult. As this column explains, informality has been rising rather than falling, with a substantial reduction in social insurance coverage for the employed since the late 1990s. Reforms are needed to reverse this decline.

Social insurance in Egypt: between costly formality and legal informality

The rates of participation of Egyptian workers in contributory social insurance has continued to decline, even during times when the country has had positive annual growth rates. This column discusses key institutional elements in the design of the current social insurance scheme that have contributed to the growing gap in coverage, particularly the scheme’s cost and eligibility requirements.

Making trade agreements more environmentally friendly in the MENA region

Trade policy can play a significant role in efforts to decarbonise the global economy. But as this column explains, there need to be more environmental provisions in trade agreements in which developing countries participate – and stronger legal enforcement of those provisions at the international level. The MENA region would benefit substantially from such changes.

Jordan: navigating through multiple crises

Jordan’s real GDP per capita is today no higher than it was 40 years ago. While external factors have undoubtedly had an adverse effect on the country’s economic outcomes, weak macroeconomic management and low public spending on investment and the social sectors have also played a substantial role. This column explores what can be done to reduce high public debt, accelerate private sector development and enhance social outcomes.

Egypt and Iraq: amenities, environmental quality and taste for revolution

The Middle East and North Africa is a region marked by significant political turbulence. This column explores a novel dimension of these upheavals: the relationship between people’s satisfaction with, on one hand, the amenities to which they have access and the environmental quality they experience, and, on the other hand, their inclination towards revolutionary actions. The data come from the World Value Survey collected in 2018 in Egypt and Iraq.

Iran’s globalisation and Saudi Arabia’s defence budget

How might Saudi Arabia react to Iran's renewed participation in global trade and investment? This column explores whether the expanding economic globalisation of Iran, following the lifting of nuclear sanctions, could yield a peace dividend for Saudi Arabia, consequently dampening the Middle East arms competition. These issues have attracted increased attention in recent times, notably after a pivotal agreement between the two countries in March 2023, marking the resumption of their political ties after a seven-year conflict.