Economic growth in the region of North Africa and the Middle East is expected to drop to 0.6 pc in 2019 against a 1.2 pc growth posted last year, says the World Bank in its latest report.
The growth forecast for 2019 has been revised downwards due to intensified global economic headwinds and rising geopolitical tensions, explains the WB, noting that the current sluggish growth is due to conservative oil production outputs, weak global demand for oil, and a larger-than-expected contraction in Iran.
On the other hand, a boost in non-oil activities in the Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates), most prominently in construction, partially offset the dampening effect on the region’s average growth numbers as a result of Iran’s economic contraction.
“Countries in the region have implemented bold reforms to restore macroeconomic stability, but the projected growth rate is a fraction of what is needed to create enough jobs for the fast-growing, working-age population,” said Ferid Belhaj, World Bank Vice President for the Middle East and North Africa region. “It is time for courageous and far-sighted leadership to deepen the reforms, to bring down the barriers to competition and to unlock the enormous potential of the region’s 400 million people as a source of collective demand that could drive growth and jobs.
In the medium-term, the World Bank expects real GDP in the MENA region to grow at 2.6 pc in 2020 and 2.9 pc in 2021. The projected pickup in growth is largely driven by increasing infrastructure investment in GCC countries and the recovery in Iran’s economy as the effects of current sanctions wane.
However, the report warns that a further escalation in regional tensions could severely weaken Iran’s economy and spill over to other countries in the region.
While rising oil prices would benefit many regional oil exporters in the short run, the overall impact would be to hurt regional trade, investment, and spending on infrastructure, affirm the WB experts.
They also tackled the issue of unfair competition in the MENA region saying that “countries in the region have an opportunity to transform their economies by leveling the economic playing field, and creating business environments that encourage risk-taking and reward innovation and higher productivity”.
The WB report calls for strengthening competition, streamlining management of state-owned enterprises and promoting the private sector.
Romain Duval and Davide Furceri, authors of this article that obviously elaborates on the currently so-called developing countries. It does not ignore that there is some differentiation between oil and/or other scarce natural resources and the non-exporters of the same. It might as well be talking about these two categories of countries but perhaps along with the character traits described in the image below. Why you might wonder. Simply because How To Reignite Growth in Emerging Market and Developing Economies as developed here, could well apply to all countries in the MENA region, perhaps worldwide not for the same reasons.
NPR quotes the Associated Press, which says that the term ‘developing country’ is more appropriate than Third World when referring to the economically developing nations of Latin America, Africa, and Asia.
Let us, in the meantime, read what they say.
(photo: Kacper Pempel/Reuters/Newscom)
Emerging markets and developing economies have enjoyed good growth over the past two decades. But many countries are still not catching up with the living standards of advanced economies.
At current growth rates, it would take more than 50 years for a typical emerging market economy to close half of its current income gap in living standards, and 90 years for a typical developing economy.
Our research in Chapter 3 of the October 2019 World Economic Outlook finds that implementing major reforms in six key areas at the same time—domestic finance, external finance, trade, labor markets, product markets, and governance—can double the speed of income convergence of the average emerging market and developing economy to the living standards of advanced economies. This could raise output levels by more than 7 percent over a six-year period.
Structural reforms can yield sizable payoffs.
More room for reforms
Policies that change the way governments work—known as structural reforms—are difficult to measure. They often involve policies or issues that are not easy to quantify, such as job protection legislation or the quality of supervision of the domestic banking system.
To address this, the IMF recently developed a comprehensive dataset covering structural regulations in domestic and external finance, trade, and labor and product markets. The data cover a large sample of 90 advanced and developing economies during the past four decades. To the five indicators, we added the quality of governance (for example, how countries control corruption) from the World Governance Indicators.
The new indicators show that, after the major wave of reforms in the late 1980s and—most importantly—the 1990s, the pace slowed in emerging market and developing economies during the 2000s, especially in low-income developing countries.
While this slowdown reflects the prior generation of reforms, as in advanced economies, there remains ample room for a renewed reform push, particularly in developing economies—notably, across sub-Saharan Africa and, to a lesser extent, in the Middle East and North Africa and the Asia-Pacific region.
Reforms can boost growth and living standards
Based on our empirical research of reforms in 48 current and former emerging markets and 20 developing economies, we find that reforms can yield sizable payoffs. But these gains take time to materialize and vary across different types of regulations. For example, a domestic finance reform of the size that took place in Egypt in 1992 leads to an increase in output of about 2 percent, on average, six years after implementation. We get a similar result for anti-corruption measures, whose effects are sizable in the short run and stabilize at around 2 percent in the medium term. In the other four reforms areas—external finance, trade, product markets, and labor markets—the gains are about 1 percent six years after the reform.
For the average emerging market and developing economy, the results imply that major simultaneous reforms across all six areas considered in this chapter can raise output by more than 7 percent over a six-year period. This would increase annual per capita GDP growth by about 1 percentage point, doubling the average speed of income convergence to advanced-country levels. Model-based analysis—which captures the longer-term effect of reforms and provides insights on the channels through which they affect economic activity—points to output gains about twice as large as the empirical model over the longer term (beyond 6 years).
One channel through which reforms increase output is by reducing informality. For example, lowering barriers to businesses’ entry in the formal sector encourages some informal companies to become formal. In turn, formalization boosts output by increasing companies’ productivity and capital investment. For this reason, the payoff from reforms tends to be larger where informality is pervasive.
Getting the timing, packaging and sequencing right
Some reforms work best when the economy is strong. In good times, reducing layoff costs makes employers more willing to hire new workers, while in bad times it makes them more willing to dismiss existing ones, magnifying the effects of a downturn. Similarly, increasing competition in the financial sector at a time of weak credit demand may push certain financial intermediaries out of business, further weakening the economy.
In countries where the economy is weak, governments may prioritize reforms—such as strengthening product market competition—that pay off regardless of economic conditions, design others to alleviate any short-term costs—such as enacting job protection reforms now with a provision that they will take effect later. These reforms can also be accompanied with monetary or fiscal policy support where possible.
Reforms also work best if properly packaged and sequenced. Importantly, they typically deliver larger gains in countries where governance is stronger. This means that strengthening governance can support economic growth and income convergence not just directly by incentivizing more productive formal enterprises to invest and recruit, but also indirectly by magnifying the payoff from reforms in other areas.
Finally, to fulfill their promise of improving living standards, reforms must be supported by redistributive policies that spread the gains widely across the population—such as strong social safety nets and programs that help workers move across jobs. For reforms to be sustainable and therefore effective, they need to benefit not just some, but all.
About the IMF Blog
IMFBlog is a forum for the views of the International Monetary Fund (IMF) staff and officials on pressing economic and policy issues of the day. The views expressed are those of the author(s) and do not necessarily represent the views of the IMF and its Executive Board.
With America’s oil boom, OPEC is stuck in retreat as demonstrated in this June 11, 2019, post of CNN’s. The MENA mainstream media are shouting: Could OPEC play second fiddle to US’s oil boom? In any case, a new world order seems to be taking shape with respect to the world’s energy generation, production and trade.
In the meantime, here is CNN’s view on this seemingly fight between Shale and conventional fossil fuel type of commerce.
New York (CNN Business) The epic American oil boom is just getting started. OPEC, on the other hand, is stuck on the sidelines. US oil production is on track to spike to a record 13.4 million barrels per day by the end of 2019, according to a recent report by energy research firm Rystad Energy. Texas alone is expected to soon top 5 million barrels per day in oil production — more than any OPEC member other than Saudi Arabia. Oil plunges back into bear market The surge in American barrels — led by the Permian Basin in West Texas — has offset oil blocked by US sanctions on Venezuela and Iran. But all of that US oil is also contributing to a supply glut that last week sent crude into another bear market. OPEC has been forced to scale back its output — a trend that could continue as the cartel tries to prop prices back up. “We continue to see the Permian representing the key driver of global oil supply growth for the next five years,” Goldman Sachs analyst Brian Singer wrote to clients on Monday.
US daily output could soon top 14 million
The shale oil revolution has made the United States the world’s leading producer, surpassing Saudi Arabia and Russia. The ferocity of the US shale oil revolution has caught analysts off guard several times over the past decade. Rystad Energy ramped up its year-end US output forecast by 200,000 to 13.4 million barrels per day. In May, the United States likely produced a record 12.5 million barrels of oil per day, the firm added. All but four million of those barrels were from shale oilfields. That growth is expected to continue. The United States is on track to end 2020 by producing 14.3 million barrels per day, Rystad projects. That’s slightly higher than the firm previously estimated and nearly triple 2008’s output. Of course, analysts could have to rein in those blockbuster forecasts if oil prices crash significantly further. That would force American frackers to preserve cash and pull back on production.
OPEC’s production hits five year low
OPEC remains in retreat as the cartel tries to balance the market by putting a floor beneath prices. OPEC’s oil production tumbled to 29.9 million barrels per day in May, the lowest level in more than five years, Rystad said. OPEC output is down 2.6 million per day since October 2018 — the month before oil prices crashed into the last bear market. Khalid al-Falih, Saudi Arabia’s energy minister, said on Friday that OPEC is close to a deal to extend its production cuts. Those cuts, which Saudi Arabia has borne the brunt of, are due to expire at the end of June. The stock market is ‘spoiled’ by rate cuts” We think that OPEC will at least maintain its output cuts, and maybe even deepen them at their next meeting,” Caroline Bain, chief commodities economist at Capital Economics, wrote in a note to clients on Monday. Rystad dimmed its projection for Saudi Arabia’s oil production from 10.6 million barrels per day to 10.3 million.
Venezuela, Iran under pressure
OPEC’s output could be further hurt by problems in some of its member countries. Iran’s oil exports have plunged because of US sanctions. The years-long collapse of Venezuela’s oil industry has been accelerated in recent months by US sanctions and sprawling blackouts in the South American nation. “There appears little prospect of a recovery in output from Iran or Venezuela any time soon,” Bain wrote. Violence is also threatening oil production in Libya and Nigeria. All told, Rystad Energy estimates 1.3 million barrels per day of oil production is at risk in those four OPEC nations. “Risks to short-term supply are undoubtedly still plentiful,” Rystad analyst Bjørnar Tonhaugen said in the report.
Will crude slide below $50?
Despite all this, analysts aren’t predicting a spike in oil prices. If anything, forecasters are bracing for more pressure on prices, due in part to robust US production. Brent, which has tumbled about 15% since late April to $63 a barrel, should finish the year at around $60 a barrel, according to Capital Economics. The US economy is about to break a record. These 11 charts show why US oil prices, trading at about $54 a barrel, are down nearly 19% since late April. Recent selling has been driven by a spike in oil inventories that suggest demand for crude is deteriorating. Goldman Sachs said that a reversal in the oil demand metrics will be required to prevent US oil prices from sinking below the $50-$60 range.”Our real concern is over demand weakness,” consulting firm Facts Global Energy wrote in a report on Monday. “Have we entered an era where demand will keep falling and we have a lot more oil on our hands than expected?”
Since time immemorial, and all in the MENA region know that growth or rather the lack of it for centuries, has brought only dire consequences. Why has growth been the panacea to any development never questioned? Richard Heinberg, author and speaker, gives us his straightforward opinion in this article of ensia republished here below.
The end of growth will come one day, perhaps very soon, whether we’re ready or not. If we plan for and manage it, we could well wind up with greater well-being.
January 8, 2019 — Both the U.S. economy and the global economy have
expanded dramatically in the past century, as have life expectancies and
material progress. Economists raised in this period of plenty assume that
growth is good, necessary even, and should continue forever and ever without
end, amen. Growth delivers jobs, returns on investment and higher tax revenues.
What’s not to like? We’ve gotten so accustomed to growth that governments,
corporations and banks now depend on it. It’s no exaggeration to say that we’re
collectively addicted to growth.
The trouble is, a bigger economy uses more stuff
than a smaller one, and we happen to live on a finite planet. So, an end to
growth is inevitable. Ending growth is also desirable if we want to leave some
stuff (minerals, forests, biodiversity and stable climate) for our kids and
their kids. Further, if growth is meant to have anything to do with increasing
quality of life, there is plenty of evidence to suggest it has passed the point
of diminishing returns: Even though the U.S. economy is 5.5 times bigger now than it was in 1960
(in terms of real GDP), America is losing ground on its happiness index.
So how do we stop growth without making life
miserable — and maybe even making it better?
To start with, there are two strategies that many
people already agree on. We should substitute good consumption for bad, for
example using renewable energy instead of fossil fuels. And we should use stuff
more efficiently — making products that last longer and then repairing and recycling them instead of tossing them in a landfill. The reason these
strategies are uncontroversial is that they reduce growth’s environmental
damage without impinging on growth itself.
But renewable energy technology still requires
materials (aluminum, glass, silicon and copper for solar panels; concrete,
steel, copper and neodymium for wind turbines). And efficiency has limits. For
example, we can reduce the time required to send a message to nearly zero, but
from then on improvements are infinitesimal. In other words, substitution and
efficiency are good, but they’re not sufficient. Even if we somehow arrive at a
near-virtual economy, if it is growing we’ll still use more stuff, and the
result will be pollution and resource depletion. Sooner or later, we have to do
away with growth directly.
Getting Off Growth
If we’ve built our institutions to depend on
growth, doesn’t that imply social pain and chaos if we go cold turkey? Perhaps.
Getting off growth without a lot of needless disruption will require coordinated
systemic changes, and those in turn will need nearly everyone’s buy-in.
Policymakers will have to be transparent with regard to their actions, and
citizens will want reliable information and incentives. Success will depend on
minimizing pain and maximizing benefit.
The main key will be to focus on increasing
equality. During the century of expansion, growth produced winners and losers,
but many people tolerated economic inequality because they believed (usually
mistakenly) that they’d one day get their share of the growth economy. During
economic contraction, the best way to make the situation tolerable to a
majority of people will be to increase equality. From a social standpoint,
equality will serve as a substitute for growth. Policies to achieve equity are
already widely discussed, and include full, guaranteed employment; a guaranteed
minimum income; progressive taxation; and a maximum income.
These are ways to make economic shrinkage
palatable; but how would policy makers actually go about putting the brakes on
growth?
Meanwhile we could begin to boost quality of life
simply by tracking it more explicitly: instead of focusing government policy on
boosting GDP (the total dollar value of all goods and services produced
domestically), why not aim to increase Gross National Happiness — as measured by a
selected group of social indicators?
These are ways to make economic shrinkage
palatable; but how would policymakers actually go about putting the brakes on
growth?
One tactic would be to implement a shorter
workweek. If people are working less, the economy will slow down — and
meanwhile, everyone will have more time for family, rest and cultural
activities.
We could also de-financialize the economy,
discouraging wasteful speculation with a financial transaction tax and a 100
percent reserve requirement for banks.
Stabilizing population levels (by incentivizing
small families and offering free reproductive health care) would make it easier
to achieve equity and would also cap the numbers of both producers and
consumers.
Caps should also be placed on resource extraction
and pollution. Start with fossil fuels: annually declining caps on coal, oil
and gas extraction would reduce energy use while protecting the climate.
Cooperative Conservatism
Altogether, reining in growth would come with a
raft of environmental benefits. Carbon emissions would decline; resources
ranging from forests to fish to topsoil would be preserved for future
generations; and space would be left for other creatures, protecting the
diversity of life on our precious planet. And these environmental benefits
would quickly accrue to people, making life more beautiful, easy and happy for
everyone.
Engineering a happy conclusion to the growth binge
of the past century might be challenging. But it’s not impossible.
Granted, we’re talking about an unprecedented,
coordinated economic shift that would require political will and courage. The
result might be hard to pigeonhole in the capitalist-socialist terms of
reference with which most of us are familiar. Perhaps we could think of it as
cooperative conservatism (since its goal would be to conserve nature while
maximizing mutual aid). It would require a lot of creative thinking on everyone’s
part.
Sound
difficult? Here’s the thing: ultimately, it’s not optional. The end of growth
will come one day, perhaps very soon, whether we’re ready or not. If we plan
for and manage it, we could well wind up with greater well-being. If we don’t,
we could find ourselves like Wile E. Coyote plunging off a cliff. Engineering a
happy conclusion to the growth binge of the past century might be challenging.
But it’s not impossible; whereas what we’re currently trying to do — maintain
perpetual growth of the economy on a finite planet — most assuredly is.
The analysis of demographics in some countries, often forgotten in many studies, raises the issue of both development and national security. Because without sustainable development, it eventually could constitute a real social time-bomb. Algeria’s challenges facing its population pressure getting more acute every year will have to be addressed and at the earliest.
Whilst the evolution of the world’s population increased per the below chart.
The demographers estimate that the global human population is increasing by 246,000 inhabitants per day, a result equal to the difference between 403,000 births and 157,000 estimated deaths per day on Earth, representing an increase of 90 million people per year. By geographical area on average in 2017, Asia represents 4,504,4280,000 inhabitants or 59.7%, Africa 1,256,268,000 is 16.6%, Europe, the richest zone in the world, 742,741,000 is 9.8%, Latin America and the Caribbean 645,593,000 or 8.6%, USA and Canada 361,208,000 or 4.8%, Oceania, 40,691,000 or 0.5% and Antarctica 1,500 or 0.0% for a total of 7,550,262,000 inhabitants.
The growth of the African population is going to be more important during this period. According to the INED of France https://www.ined.fr/ , the population of Africa is going to double between 2017 and 2050, it will rise from 1.25 billion inhabitants to 2.574 billion. On the other hand, the population World should Tend towards 10 billion human beings (9.846 billion).
What about the evolution of the Algerian population?
The figures given by the NSO (National statistical Office) on forecasts of the evolution of the Algerian population by 2030 would be 51,26 million. And according to the current rate hypothesis of 2.4 children per woman and by 2050 to reach 65 million inhabitants, data that must be correlated with life expectancy.
While it is 77.1 years for men and 78.2 for women, it will at birth be 81 years for men and 83 years for women in 13 years. The figures of the INED confirm the trends of the NSO, showing that the Algerian population is young, constituted at 29% of under 15 years, the over 65 years representing about 6%. According to the INED, the forecast on the strong growth of the Algerian population over the next 33 years is due to several annual births of 1,103,000 and a relatively high fertility index (number of children per woman) of 3.1 whereas countries of the Mediterranean basin such as Morocco with 2.4, Tunisia, 2.4, France, 1.9 and Libya, 2.4 have much lower rates. Egypt has however a higher one with an index of 3.3 but Niger occupies the first place in the world ranking with the highest index of 7.3.
What is the spatial distribution of the population?
According to data for 2016, the 12 provinces with a density of less than 20 inhabitants per km² account for 89% of the country’s area with just 13% of the population. The 36 other provinces, all located in the north, have a higher density of more than 120 inhabitants per km², representing 11% of the area, approximately 240,000 km2 and includes 87% of the population.
Among these 36 provinces of the north, the highest densities are found around the large agglomerations of Algiers, Oran, Constantine and Annaba, then come the more rural coastal provinces, then the inner land provinces and finally the wilayas close to the Sahara.
More precisely and in descending order we have: Algiers, Oran, Boumerdes, Constantine, Annaba, Mostaganem, Tizi-Ouzou, Bejaia, Tipaza, Jijel, Sétif, Mila, Skikda, Chlef, Bouira, Ain Defla, Ain-Temouchent, Bordj Bou Arredj, Relizane, Mascara, El Tarf, Guelma, Tlemcen, Souk Ahras, Tissemsilt, Médéa, Batna, Oum El Bouaghi, Sidi Bel Abbes, Sila, Saida, Tiara, Khenchela Biskra, Laghouat and Djelfa.
The other provinces like El Oued, Naama, Ghardaia, El Bayath, Ouargla, Bechar, Adrar, Tamanrasset and Illizi come from far behind.
Good governance and social purpose
Satisfying the needs of a given population must obligatorily whilst considering the new transformation of the world, link economic and social dynamics to achieve some reliability.
The set of previous data shows that in the event of non-development, the demographic pressure would constitute a real social timebomb. As demographic pressure involves increasing needs such as more food consumption and durable consumer goods, more infrastructure, more schools, more training centres and hospitals. Hence the importance for any government to have a forward-looking vision
It is also a matter of thinking already of the diversification of the national economy to create more jobs to meet the needs of an increasingly demanding population. For that, with the scarcity of financial resources, which is likely to impact development projects, the urgency of a new governance re-foundation would be required.
Would it suffice to say that a reorientation of the current socio-economic policy to have necessarily a growth rate higher than the population growth rate otherwise the rate of unemployment will increase (rate of Growth greater than 7/8% over several years to create 350,000 / 400,000 new workstations per year)?
Does not this mean also the imperative to abandon the old patterns of the 1970s especially in the field of industrial policy, to adapt to the Fourth World Economic Revolution which promises to be irreversible and on us by 2020 through 2030, based on networks, more social dialogue and more decentralization, not to be confused with deconcentration.
Ademmebtoul@gmail.com
Originally posted on Good Food on Bad Plates: We don’t typically make a lot of stews because Toddler Mash doesn’t typically eat them. A couple of weekends ago, though,we ended up making a lamb cobbler on the Saturday and kusksu (Libyan couscous with spicy beef and vegetables) on the Sunday. He surprised us on the…
Originally posted on Imen Bliwa Blog: Abib, Sierra Leone’s immigrant helping a friend’s child while camping in front of UN building in Tunisia Along with many of his friends and neighbors, Abib had to spend days and nights in front of the UN building (IOM). A calm fancy neighborhood next to Tunis Lake turns into…
Originally posted on Mackneen, The Algerian Goldfinch: It’s Spring, like the season then, twelve years ago. Time flies, like a bird. On this day, twelve years ago, I created this blog and I gave it a name: Mackneen,The Algerian Goldfinch. On that day I went to Algiers for a visit to my mother, and to my…
This site uses functional cookies and external scripts to improve your experience.
This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish.AcceptRead More
Privacy & Cookies Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
This site uses functional cookies and external scripts to improve your experience. Which cookies and scripts are used and how they impact your visit is specified on the left. You may change your settings at any time. Your choices will not impact your visit.
NOTE: These settings will only apply to the browser and device you are currently using.
Google Analytics
To provide me with an idea of my site’s performance
You must be logged in to post a comment.