Economic Research Forum (ERF)

May

Oil rents and Iran’s middle class

Iran’s middle class has experienced persistent expansion over the past 50 years, excluding the period coinciding with revolutionary turmoil and the Iran-Iraq war. As this column explains, the growth of the middle class has been significantly influenced by oil revenues acting to expand non-oil trade, the service sector and the real estate sector. But growth has not been accompanied by improvements in the quality of political institutions.

Improving access to finance and social cohesion in MENA

The Covid-19 crisis is exacerbating income inequalities in the Middle East and North Africa, pushing many vulnerable people into poverty and causing bankruptcy for multiple micro-enterprises and small and medium-sized enterprises. This column explores some financial innovations to help address these huge challenges, particularly focusing on improving access to finance for individuals and small businesses.

Living with debt: how institutions can chart a path to recovery in MENA

Public debt has been a critical tool for governments dealing with Covid-19, but it is a double-edged sword: as the pandemic subsides, tensions will inevitably arise between potential short-run gains and long-run costs. As the World Bank report summarised in this column concludes, institutional reforms to improve governance and transparency can address the trade-off. Such measures can be implemented with limited fiscal costs – and they hold the promise of boosting long-run growth.

Covid-19 impacts could be severe and long-lasting for developing countries

The United Nations High-level Advisory Board on Economic and Social Affairs, of which ERF Managing Director Ibrahim Elbadawi is a member, convened its first meeting recently. As this column reports, the experts urge international solidarity to prevent the Covid-19 crisis from pushing countries further apart.

Cash-based assistance programmes for refugees: evidence from Lebanon

What are the immediate and longer-term effects of at-scale cash-based assistance programmes on refugee populations? This column reports results from an evaluation of two of the largest humanitarian aid programmes currently in operation, targeted at families in Lebanon that have fled the continuing conflict in Syria.

Access to finance for Egypt’s private sector during the pandemic

In response to the global pandemic, public authorities in Egypt responded with a comprehensive package aimed at tackling the health emergency and supporting economic activity. This column examines how private sector firms perceived ease of access to finance before and after the emergence of Covid-19 in 2020.

Socio-economic inequality across religious groups in Egypt

Socio-economic inequality across religious groups has been at the centre of public debate in the Middle East for decades. This column argues for the value of taking a longer historical perspective: in Egypt, for example, inequality is not simply a consequence of postcolonial policies but rather has colonial and, perhaps more importantly, long-standing pre-colonial roots.

Public sector reform in MENA: the achievable governance revolution

Across the Middle East and North Africa, there are countries working to modernise state institutions to make them more efficient, effective and responsive. This column argues that while it is common for Arab governments to look elsewhere for reform ideas, there is a wealth of experience within the region that practitioners should consider. Lessons from public sector reform in MENA from the past two decades suggest that transformative change is possible.

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.