“While the need for economic reform is well-recognized by political stakeholders, neither people on the street nor those in the government are yet ready to bear the social and political costs of reform.”
Bassem Awadallah (Tomoh Advisory) set off this ERF policy session with a background on the gravity of economic problems in the Arab spring countries and how the governments struggle with the politics of reform. Following the Arab spring uprisings, which demanded freedom, bread and social justice, Awadallah argues that the economic challenges facing the Arab spring countries have only become more pressing; unemployment nearly doubled, foreign investment dried up, tourism revenues are endangered and fiscal challenges remain at large. What’s alarming, though, is the apparent absence or painful tardiness of policy response.
Inequality of opportunity is spreading everywhere as a concept. However, it was not very famous in the Middle East. A couple of years back, the Economic Research Forum made an effort to produce research and study the field of inequality and equity. ERF is dedicated to contribute to the literature, and in this session held at the Seventeenth World Congress ’Inequality of opportunity in th Middle East’ ERF presents three recent papers.
Ragui Assad, University of Minnesota presented a paper ‘’ Does Improved Local Supply of Schooling Enhance Intergenerational Mobility in Education? Evidence from Jordan’ co-authored by Mohamed Saleh, Toulouse School of Economics, the paper mainly is about inequality of opportunity in relation to schooling and whether schooling will be responsive to government policy towards increasing the local supply of schooling in Jordan.
‘The International Monetary Fund (IMF) estimated in 2011, that food subsidies amounted to 0.7 percent of GDP and that for energy was equivalent to about 8.5 percent of regional GDP, or 22 percent of government revenue. (IEA webmeets)’. In Egypt, Energy subsidy accounts for 25% of government expenditure, this is twice as much as Egypt spends on education. Four times than Egypt spends on the health sector. Figures are alarming. However, this is not an explicit problem to Egypt, its one that has hit many countries within the MENA at different points of time. And each country tried to deal with it differently, thus there is room to learn what worked and what did not.
Energy Subsidy reform in Egypt has become a must
Having stated the above mentioned figures, energy subsidies continue to be a burden on government budgets. There is very little evidence tracing the effectiveness of previous energy subsidy reform programs and its impact on reducing poverty or reaching the needy. In fact, there is more evidence shared showing the ineffectiveness of energy subsidy programs during the opening session of the Seventeenth World Congress “The Dilemma of Subsidy Reform and Equity in MENA” . The purpose of this session is to discuss subsidy reform and its underlying challenges such as achieving a more equitable system while avoiding inflationary effects and food riots in the context of MENA countries.
Leaders matter. Incompetent regimes are more likely to be replaced, Caroline Freund
The Arab spring has had a political whirlpool effect on countries of the Middle East. With nothing happening for quite a long time, to almost all drives for change interchangeably playing active role in the region. After many decades of nothing, a lot of change happened. The ERF organized a session on’ The Political Economy Of Change In The Middle East – What Is Driving Change? during the Seventeenth World Congress, organized by Intentional Economic Association (IEA) and the Colombia Global Centers, Amman. The session aims to discuss ideas and directions to think about what is guiding this change, what is currently happening, make some logic of surrounding events and try to figure out the main drives for change in the Middle East, being it geopolitical, social or economic.
In this session Caroline Freund, Peterson Institute presented a paper ‘Change In The Middle East: Similarities And Differences With Global Experiences’ co-authored by Melise Jaud, World Bank. The aim of the paper is to try to understand what to expect based on other countries’ experience that has gone through democratic transitions by examining the causes and economic consequences of political transition. Freund in her paper examines over 100 transitions in the last half-century with various outcomes: to and from democracy, some partial, and some failed.
In an effort to contribute to inform global debates on economic issues, the ERF is participating in the IEA 17th World Congress prominent event by hosting many sessions throughout the five days of the congress. A glimpse of ERF sessions include: ( please click on each session title for details on the session, speakers, papers and all relevant details)
- The Political Economy Of Change In The Middle East – What Is Driving Change?Friday 6 June 2014, 15:45 – 17:15, Room Wadi Rum Hall 2
- The Dilemma Of Subsidy Reform And Equity In MENA
Friday 6 June 2014, 18:35 – 19:45, Room Philadelphia Hall
- Policy Session: Recent Research On Inequality Of Opportunity In The Middle EastSunday 8 June 2014, 11:00 – 12:30,
Room Wadi Rum Hall 2
- Policy Session: Challenges And Dilemmas Of Policy-Making After The Arab Spring
Sunday 8 June 2014, 14:00 – 15:30, Room Wadi Rum Hall 2
Please follow twitter stream #IEA214 to stay up to date with the latest message from the 17th World congress. Also please visit the ERF blog and YouTube Channel for stories specifically on the ERF sessions mentioned above.
The International Economic Association (IEA), with collaboration with the Colombia Global Centers (Amman), is hosting its Seventeenth Annual World Congress at the King Hussein Bin Talal Convention Centre in the Dead Sea, Jordan, starting today up until June 10th. The congress brings together diverse communities of economists, academics and policymakers from both developing and developed countries, working on a wide range of topics with a diversity of approaches.
Seventeenth World Congress- International Economic Association
The 17th World Congress is organized in partnership with the Economic Research Forum, Fung Global Institute, International Development Research Centre, Centre for International Governance Innovation, Institute for New Economic Thinking, African Innovation Foundation, King Abdullah II Fund for Development, and Japan International Cooperation Agency.
The usefulness of the Jordan Labor Market Panel Survey continues to dwell into the characteristics of the local labor markets and provides a tool for analysing the behaviours of labor, entry and exit from job markets, and study the main indicators affecting labor trends, education, women’s participation, job accessing and job mobility, and so on.
Making data available for the public is one key mission that ERF takes seriously. ERF aims to provide researchers with free access to several types of harmonised micro data. These data sets are made accessible for free by the Economic Research Forum via the ERF Open Access Micro-Data Initiative to encourage the responsible us of those data sets.
The fact that this data is available and the analysis behind it in terms of knowledge and ideas produced makes it an attractive aspirant to policy uptake. This nature of the data allows policymakers to draw a comprehensive pictures of labor patterns in Jordan hence make better informed decisions. Omar Razzaz (King Abdullah II Fund for Development) argues that this data can enhance policy-based evidence decision-making.