世界发展银行-Middle-East-and-North-Africa-Economic-Update,-April-2020-_-How-Transparency-Can-Help-the-Middle-East-and-North-Africa_64页_2mb

MENA Economic Update April 2020: How Transparency Can Help the Middle East and North Africa

Core Content

This report, How Transparency Can Help the Middle East and North Africa, published by the World Bank, examines the impact of the dual shocks of the novel coronavirus (Covid-19) and the oil price collapse on the Middle East and North Africa (MENA) region. It emphasizes the critical role of transparency in addressing long-standing economic and social challenges, such as low growth, macroeconomic fragility, and stagnant labor markets. The report argues that transparency is not only essential for informed policy-making but also for rebuilding public trust and promoting sustainable development.

Main Points

1. The Dual Shocks

• Covid-19 Pandemic: Has caused severe negative supply and demand shocks across the region, disrupting economic activity and public health systems.
• Oil Price Collapse: Has depressed incomes in oil-exporting countries and indirectly affected oil-importing economies through reduced remittances, foreign investment, and sovereign lending.
• Combined Impact: The dual shocks have led to a significant decline in the region’s economic growth, with a preliminary estimate of a 3.7 percentage point reduction in the World Bank’s growth forecast for 2020 compared to October 2019.
• Uncertainty: The economic costs of the crisis remain uncertain and may change as more information becomes available.

2. MENA's Chronic Low-Growth Syndrome

• Since the beginning of the 21st century, MENA has experienced lower per capita GDP growth than would be expected for economies at similar levels of development.
• If the region had grown at the median rate of its peers, it would be at least 20% richer today.
• This low growth is attributed, at least in part, to a lack of data and transparency.

3. The Role of Transparency

• Statistical Capacity Index: Since 2005, MENA has seen an absolute decline in its statistical capacity index, which measures the transparency and quality of data.
• Impact on Growth: There is a strong empirical link between statistical capacity and economic growth, suggesting that transparency can significantly influence development outcomes.
• Income Losses: The decline in transparency is estimated to have led to a loss of income per person ranging from 7% to 14%.

Key Challenges and Areas of Focus

1. External Imbalances and Fiscal Sustainability

• Current Account Deficits: Three developing MENA economies are on unsustainable current account paths due to low GDP per working age population.
• Fiscal Vulnerabilities: In 2019, 11 MENA countries were on unsustainable fiscal paths, as primary fiscal balances were insufficient to stabilize gross debt-to-GDP ratios.
• Data Transparency: The lack of transparency in debt reporting limits the ability to assess fiscal sustainability accurately.

2. Labor Market Outcomes

• Unemployment: High reported unemployment rates persist across the region, affecting both urban and rural areas.
• Female Labor Force Participation (FLFP): FLFP remains low, and the report suggests that this is a generational issue, with younger women more likely to participate in the labor force due to higher education levels.
• Informality: The measurement of informality in the labor market is a major data gap, making it difficult to assess the true state of employment and economic activity.

Policy Recommendations and Implications

• Need for Transparent Data: Reliable data and transparency are crucial for effective policy-making and improving public trust in the state.
• Rebuilding Trust: The report highlights that public trust is essential to address long-standing grievances and promote social stability.
• Enhancing Statistical Capacity: Improving data collection and transparency can lead to better economic outcomes, including growth, fiscal sustainability, and labor market performance.
• Long-Term Vision: The report calls for a new social contract that emphasizes transparency, accountability, and evidence-based policy discussions to foster a brighter future for the region.

Conclusion

The report concludes that transparency is a key enabler for development in the MENA region. It argues that without reliable data, it is difficult to design effective policies, and the lack of transparency has contributed to the region’s chronic low-growth syndrome. By improving data transparency and statistical capacity, the region can enhance its ability to respond to crises, improve fiscal and labor market outcomes, and build a more prosperous and trusted society.

Key Figures and Tables

• Figure I.1: Negative supply and demand shocks in MENA due to the pandemic and oil price collapse.

• Figure I.2: Global oil demand forecasts for 2020.

• Figure I.3: Brent oil price and futures.

• Figure I.4: Income effect of oil price collapse across MENA economies.

• Figure I.5: Correlates of the crisis costs: growth downgrades, oil export exposure, and health security.

• Figure I.6: Changes in World Bank growth forecasts.

• Figure I.7: MENA's chronic low-growth syndrome.

• Figure I.8 & I.9: Regional development and statistical capacity index.

• Table I.1: Standard deviation of private-sector forecasts for 2020 GDP growth in MENA.

• Table I.2: Uncertain forecasts: World Bank's growth, current account, and fiscal balance forecasts.

• Table I.3: Changes in World Bank growth forecasts relative to October 2019.

• Table II.1: Primary and structural fiscal balances versus debt-stabilizing primary fiscal balances in MENA, 2018 and 2019.

• Table II.2: Debt reporting in MENA countries.

• Table III.1: Definitions of employment and unemployment from U.S. BLS, French INSEE, and ILO.

• Table III.2: Consistency of employment and unemployment definitions across MENA.

• Table III.3: Definitions of employment and unemployment.

• Table III.4, III.5, III.6: Unemployment rates in Egypt, Jordan, and Tunisia.

• Table III.7: Decomposing the gap in FLFP rates between younger and older cohorts.

• Table III.8: Informal employment in Egypt, Jordan, and Tunisia.

• Table A1: Macroeconomic loss in GDP due to decline in statistical capacity index in MENA (2005–2018).

• Table A2: Definitions of the statistical capacity measure.

• Table B1 & B2: Summary statistics and MNACE model estimates of current account drivers.

• Table C1: Relationship between primary balance and debt.

Summary of Findings

• The lack of transparency in data collection and reporting is a significant barrier to effective economic policy-making in MENA.
• Transparency can enhance societal trust, which is essential for addressing long-term development challenges.
• The region's low growth, macroeconomic fragility, and stagnant labor markets are linked to poor data quality and transparency.
• Improving transparency and statistical capacity can lead to better economic outcomes and more robust policy responses.

Acknowledgements

The report is a product of the World Bank Group’s Middle East and North Africa Chief Economist Office (MNACE). It was authored by Rabah Arezki, Daniel Lederman, and other experts. The report benefited from valuable feedback and insights from numerous World Bank staff and external contributors, including macroeconomists, consultants, and regional leadership team members.