Economic Research Forum (ERF)

March

Is the Middle East the world’s most unequal region?

Survey-based estimates suggest that inequality in Middle Eastern countries is not particularly high by historical and international standards. This column reports research that combines household surveys, national accounts, income tax data and rich lists to produce the first estimates of income inequality at the regional level. The results suggest that the Middle East is the most unequal region in the world.

Shifting commodity markets in a globalised world

Commodity markets have been on a rollercoaster ride in the first two decades of the twenty-first century. A new book, summarised in this column, examines the long-term forces of technology, geography, demography and policy that influence these markets, and how their interplay sends price signals to producers and consumers.

Highways to growth: the impact of road upgrades on Turkish trade

Investment in transport infrastructure can improve a country’s growth prospects by facilitating trade. This column reports the findings of research on the impact of a major programme of road upgrades in Turkey from the early 2000s, which converted many two-lane undivided roads into dual carriageways. Trade both within the country and with other countries has benefited significantly from these improvements.

Improving market access for Jordanian exports to Europe

As part of its efforts to alleviate the Syrian refugee crisis in Jordan, the European Union has granted a relaxation on origin requirements for selected products from certain parts of the country. This column reports analysis of whether the EU’s decision can help to provide job opportunities for refugees.

Why economists missed the Arab Spring

Just prior to the Arab Spring, many of the economic and social indicators for the countries of the Middle East and North Africa painted quite a favourable picture of the region. This Project Syndicate column explores why economists failed to anticipate the unrest. One key lesson is that improved economic performance cannot be viewed as an insurance policy against political instability.

Financial vulnerability and export dynamics

How does the financial vulnerability of many developing economies affect the ability of their firms to participate effectively in export markets? This column summarises research on 34 developing countries between 1997 and 2011. Financial crises in both the exporting and importing countries have a big negative effect on export dynamics.

MENA firms involved in trade: characteristics and challenges

How do MENA firms participating in international trade compare with their counterparts elsewhere in the world as well as with non-traders in the region? This column reports globally comparative data on the size and productivity of firms that export, import and do both – ‘two-way traders’. The results indicate the need for policy measures in MENA economies to promote efficient access to export markets and material inputs, especially for dynamic mid-range firms with potential for growth.

Tax reform for equity and fiscal space in middle-income Arab countries

Arab countries have systematically low tax collection rates relative to the size of their economies. What’s more, with rising military expenditures and lower oil prices, the public budgets of the oil-rich states are coming under growing pressure. This column argues that the time is right for region-wide fiscal policy reforms that enact fair and progressive taxation systems.

Modernising the EU-Turkey customs union

Turkey has benefited from a customs union with the European Union since the mid-1990s, but now is the time for it to be modernised. This column argues that current arrangements should be strengthened by signing a free trade agreement covering agriculture, services, public procurement, investment protection, dispute settlement and sustainable development.

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.