Economic Research Forum (ERF)

June

A moonshot for MENA: laying the groundwork for a modern digital economy

A new economic reality is needed in the Middle East and North Africa (MENA). This column proposes a ‘moonshot’, which, like the US effort to land a man on the moon in the 1960s, can unite people behind a common goal and transform the ways in which governments, companies, international financial institutions and civil societies conduct business. It would transform MENA economies and help to ensure that millions of the region’s young people can find the good jobs they deserve.

Iran: the nuclear deal, currency depreciation and inflation

Iran’s currency has once again fallen against the dollar following the US withdrawal from the nuclear deal. This column explores the inflationary impact of speculative attacks on the rial, as well as the policy responses from the government and the central bank. Such episodes – and subsequent overshooting – have proven to be highly disruptive to the country, with lasting adverse social and economic effects.

Measuring economic destruction in Syria from outer space

How is Syria’s civil conflict affecting the economy? This column analyses data on night-light intensity measured by satellites to assess the extent of the destruction of economic activity across the country. Without a strong programme of economic rebuilding when the conflict finally ends, the return of approximately 5.6 million registered refugees to Syria will not happen any time soon.

Local winners and losers in Erdoğan’s Turkey

Throughout the 2000s, Turkey was portrayed as a model of social and economic success for other countries in the MENA region. Ahead of the country’s early presidential and parliamentary polls, this column reports research evidence on how the ruling Justice and Development Party has managed public resources and fostered local economic development since it took power in 2002. The government has played a substantial role in influencing local economic performance on a discretionary basis.

Liberalising road transport markets between Turkey and Europe

The routes that connect Turkey to its most important trading partners in Europe are governed by a system of road transport quotas, which has a significantly negative effect on the country’s exports. This column explores the challenges of liberalising the market for road freight transport services between Turkey and the European Union.

Poverty reduction efforts in Iran: the wrecking force of inflation

Iran’s universal cash transfer (UCT) programme plays an important role in fighting poverty. But as this column shows, its real value and impact on the country’s poorest people has diminished significantly as a result of rising prices. Over the five-year period since the UCT was first operating in 2011, inflation halved its original value.

The new normal in the global economy: challenges for MENA

ERF’s annual conference has become the premier regional event for economists of the Middle East. This column previews the 2018 conference, to be held in Cairo in July, where the main theme will be the challenges for the region of the likelihood of a relatively sustained period of low oil prices as well as disruptive cyclical movements around the long-term price trend – the so-called ‘new normal’ in the global economy. Special sessions will also discuss the challenges of inequality; climate change and environmental damage; and solidarity, economy and social justice.

Jordan’s labour market: new inputs for informed policy-making

The labour market in Jordan has deteriorated since 2010: informality and irregular employment have increased; the recent social security reform has had limited impact; and large shares of young people are neither working nor in school. This column reports new high-quality survey data collected by ERF, analysis of which is providing insights into the causes of the deterioration and potential policy responses. Jordanian researchers and policy-makers are now in a better position to ask informed questions and develop better policy.

Most read

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.

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.

Labour market effects of robots: evidence from Turkey

Evidence from developed countries on the impact of automation on labour markets suggests that there can be negative effects on manufacturing jobs, but also mechanisms for workers to move into the services sector. But this narrative may not apply in developing economies. This column reports new evidence from Turkey on the effects of robots on labour displacement and job reallocation.

Global value chains and domestic innovation: evidence from MENA firms

Global interlinkages play a significant role in enhancing innovation by firms in developing countries. In particular, as this column explains, participation in global value chains fosters a variety of innovation activities. Since some countries in the Middle East and North Africa display a downward trend on measures of global innovation, facilitating the GVC participation of firms in the region is a prospective channel for stimulating underperforming innovation.

Food insecurity in Tunisia during and after the Covid-19 pandemic

Labour market instability, rising unemployment rates and soaring food prices due to Covid-19 are among the reasons for severe food insecurity across the world. This grim picture is evident in Tunisia, where the government continues to provide financial and food aid to vulnerable households after the pandemic. But as this column explains, the inadequacy of some public policies is another important factors causing food insecurity.

Sustaining entrepreneurship: lessons from Iran

Does entrepreneurial activity naturally return to long-term average levels after big economic disturbances? This column presents new evidence from Iran on trends in entrepreneurship among various categories of firm size, sector and location – and suggests policies that could be effective in promoting entrepreneurial activities.

Manufacturing firms in Egypt: trade participation and outcomes for workers

International trade can play a large and positive role in boosting economic growth, reducing poverty and making progress towards gender equality. These effects result in part from the extent to which trade is associated with favourable labour market outcomes. This column presents evidence of the effects of Egyptian manufacturing firms’ participation in exporting and importing on their workers’ productivity and average wages, and on women’s employment share.

Intimate partner violence: the impact on women’s empowerment in Egypt

Although intimate partner violence is a well-documented and widely recognised problem, empirical research on its prevalence and impact is scarce in developing countries, including those in the Middle East and North Africa. This column reports evidence from a study of intra-household disparities in Egypt, taking account of attitudes toward gender roles, women’s ownership of assets, and the domestic violence that wives may experience from their husbands.

Do capital inflows cause industrialisation or de-industrialisation?

There is a clear appeal for emerging and developing economies, including those in MENA, to finance investment in manufacturing industry at home with capital inflows from overseas. But as the evidence reported in this column indicates, this is a potentially risky strategy: rather than promoting industrialisation, capital flows can actually lead to lower manufacturing value added and/or a reallocation of resources towards industries with lower technology intensity.

Financial constraints on small firms’ growth: pandemic lessons from Iran

How does access to finance affect the growth of small businesses? This column presents new evidence from Iran before and during the Covid-19 pandemic – and lessons learned by micro, small and medium-sized enterprises.