Economic Research Forum (ERF)

October

Energy subsidy reform: progress and challenges

Despite a growing global consensus about the need for reform of costly and environmentally damaging energy price subsidies, many countries remain resistant. This column takes stock of recent developments in the context of a database of diesel prices. Environmental concerns seem to play a role in driving reform, but most reforming countries have been facing large fiscal imbalances.

Creating jobs: East Asian success and MENA failure

Comparing the experiences of MENA and East Asia in recent decades reveals the delicate nature of the latter’s remarkable structural transformation: several parts of the economy had to be pulling in the same direction. This column explains how East Asia succeeded – and MENA failed – in generating productive employment.

Inequality in higher education: Egypt, Jordan and Tunisia

Attainment of higher education is strikingly unequal in Egypt and Tunisia, and a little less so in Jordan. This column reports research showing that in all three countries, family background is the primary driver of inequality. Particularly in Egypt and Tunisia, public spending on higher education is regressive, with the result that what purports to be a meritocratic and equitable system in reality perpetuates inequality.

Going beyond Doing Business to foster job creation

The World Bank’s Doing Business rankings provide a useful benchmark, but making them a key policy goal is inappropriate for Arab countries where the reform agenda needs to be far more wide-ranging. This column argues for a more practical and effective approach to creating business environments that will attract investment and foster job creation.

From booming oil revenues to inclusive growth

The first ten years of the twenty-first century saw an unprecedented surge in oil prices and highly favourable incomes for oil-exporting countries in the Middle East – yet it culminated in social and political upheaval. This column reports research on the extent to which the growth experiences of those countries in that decade may be considered to have been ‘inclusive’ of a broad swathe of society.

Inequality underestimated in Egypt: evidence from house prices

Standard estimates of income and consumption inequality rank Egypt as one of the world’s most equal countries. By analysing data on house prices to obtain a more accurate estimate of the top tail of the income distribution, this column presents evidence that Egyptian inequality is considerably underestimated.

Public procurement: the value of making global commitments

The World Trade Organization’s Agreement on Government Procurement aims to ensure that public procurements in signatory countries are conducted in a competitive, non-discriminatory and transparent manner satisfying the conditions of integrity. This column reports research showing that the agreement promotes competition, reduces corruption and delivers better value for taxpayers’ money.

Lessons and pitfalls of transitions to democracy

Under what circumstances is a country most likely to make a successful transition to democracy? This column outlines the roles of both human agency and structural factors such as class or economic interests. Key to the process of democratisation is the kind of incentives that encourage elite groups in society to reach compromises even in the face of ideological differences.

Mothers’ education and children’s health

Educational reforms in Turkey 20 years ago led to a significant improvement in the attainment of young men and women. This column reports research indicating that the children of women who were required to extend their time at school from five to eight years are healthier at birth and less likely to die by the age of five.

Job creation and labour market regulation: flexibility versus security

Job creation in the formal private sector is vital for inclusive economic growth in many MENA countries, but in some cases, it is being hampered by over-protective labour regulations. This column emphasises the importance of a balanced approach between flexibility in the labour market and the security of workers’ earnings.

Diversification strategies for the Gulf monarchies

For the Gulf monarchies, the only long-term solution to lower oil prices is to diversify the economy, which can be done either with or without citizen labour. This column argues that given employers’ preference for foreign labour, the only alternative is to bifurcate the job market, creating enclaves where citizen labour can be used productively. This requires strong state institutions that can impose labour market regulations on businesses.

What’s holding back the private sector in MENA?

The development of a vibrant private sector is essential for delivering the sustainable employment and inclusive growth that are so urgently needed in the countries of the Middle East and North Africa. This column summarises findings on the key constraints on doing business from Enterprise Surveys conducted in eight economies in the region during the period 2013-15.

The oil price collapse: crisis or opportunity?

How should oil-producing economies in the Middle East and North Africa respond to the potential persistence of low oil prices? This column argues that governments need both to find alternative revenue sources and to make the non-oil economy more productive. It is time to think about the next chapter in the region’s development history – the post-oil chapter.

Putting human security at the heart of public policy-making

Governments’ core objective of providing a secure environment for their people is traditionally understood to mean ‘national security’. This column advocates replacing that idea with a broader concept of ‘human security’. Such an approach can provide a consistent framework for handling multiple challenges, including natural disasters and global crises as well as military threats.

Universal primary care lowers mortality: evidence from Turkey

In 2005, Turkey extended basic healthcare services to its entire population under a free-of-charge, centrally administered system. This column reports research showing that the programme was successful in lowering mortality rates across provinces, particularly for the most vulnerable. The findings provide compelling evidence in support of providing accessible healthcare services to all citizens.

Freedom for women is crucial for economic progress in MENA

The Middle East was once the cradle of civilisation: can it prosper once again? Looking back at lessons from the European Enlightenment, this column argues that if the region wants to advance economically, it needs to advance in terms of its treatment of women. Female agency is central to understanding the West’s technological leadership of the past two centuries.

Implications of the current low oil prices for MENA countries

The current low oil price environment, in part driven by the US shale oil revolution, has important macroeconomic implications for the Middle East and North Africa (MENA). This column reports research evidence on its likely impact on both oil-exporting and oil-importing countries in the region.

Transition lessons from China for MENA development

How can developing economies escape from the trap of middle- or low-income status in which the majority has been for decades? Drawing lessons from the experiences of China, this column argues that an economically successful country must have the market as its foundation and on top of that the state playing an active, facilitating role.

Why the West got rich and the Middle East did not

Today’s rulers of the three largest Middle Eastern economies all look to religious authorities as a key source of legitimacy. Drawing on a broad sweep of historical analysis, this column explores what this might mean for the region’s economic future. One notable danger is that the types of people who would push for policies that promote long-run growth are excluded from the political bargaining table.

Oil exporters’ responses to the US fracking boom

What are the implications of low oil prices for the economic and political stability of Arab oil-exporting countries such as Saudi Arabia? This column explores the impact of the US fracking boom on Arab oil revenues – and how policy-makers in these countries should respond.

The United Arab Emirates’ dilemma

As energy-producing economies strive to reduce their reliance on oil revenues, they must strike a balance between the competing demands of fiscal sustainability and steady growth of the non-energy sector. This column outlines how the United Arab Emirates is addressing this challenge.

An agenda for reducing income inequality in the Arab countries

What can be done to reduce income inequality in Arab countries? This column explores issues of measurement as well as potential policy measures. It concludes by calling for a new multipurpose pan-Arab survey that would allow for an evidence-based decision-making process on the impact of proposed policies on poverty and inequality.

Prospects for development with democracy in the Arab world

What are the prospects for democracy in the Arab world? This column expresses the hope that as conflict-afflicted countries embark on their programmes of economic reconstruction, autocratic institutions will not be re-established under the pretext of the need for a speedy and steady recovery. The optimal path of development necessarily includes robust growth, equity as well as democracy.

Why Turkish growth ended

Following a period of rapid economic growth, the Turkish economy has slowed significantly since 2007. This column argues that these economic ups and downs reflect institutional improvements in the aftermath of the country’s 2001 financial crisis, followed by an ominous slide in the quality of these economic and political institutions.

It’s time to stop the civil war in Syria

Since 2011, the conflict in Syria has created more refugees and more internally displaced persons than anywhere else in the world. This column suggests that the international community can no longer afford simply to accept the growing costs of civil wars like Syria’s and should intervene to end them and promote reconstruction.

Most read

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.

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.

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.

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.

Egypt’s labour market: new survey data for evidence-based decision-making

As Egypt faces substantial social and economic shifts, understanding the labour market is crucial for designing policies that promote employment and inclusive economic growth. This column introduces the latest wave of the Egypt Labor Market Panel Survey, which provides fresh, nationally representative data that are vital for examining these dynamics.

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.

More jobs, better jobs and inclusive jobs: the promise of renewable energy

Among the many economic and environmental challenges facing the countries of the Middle East and North Africa (MENA), two stand out: the need for jobs and the need to combat the threat of climate change by moving away from reliance on fossil fuels. As this column explains, embracing renewable energy technologies presents an opportunity for the region to diversify its economy, mitigate the possible negative impacts of digital technologies on existing jobs, reduce its carbon footprint and create significant levels of employment, particularly for women and the youth, across a variety of sectors.




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