Natural resource abundance, growth and diversification in MENA : the effects of natural resources and the role of policies / Ndiamé Diop, Daniela Marotta and Jaime De Melo, editors.

Format:

Book

Contributor:

Diop, Ndiame.

Marotta, Daniela.

De Melo, Jaime.

World Bank.

Series:

Directions in development.

Directions in development

Language:

English

Subjects (All):

Economic development--Middle East.

Economic development.

Economic development--Africa, North.

Natural resources--Government policy--Middle East.

Natural resources.

Natural resources--Government policy--Africa, North.

Industrial policy--Middle East.

Industrial policy.

Industrial policy--Africa, North.

Diversification in industry--Middle East.

Diversification in industry.

Diversification in industry--Africa, North.

Natural resources--Government policy.

North Africa.

Middle East.

Physical Description:

xxii, 201 pages : illustrations ; 23 cm.

Place of Publication:

Washington, DC : World Bank, [2012]

Summary:

The Middle East and North Africa (MENA) region is one of the richest in the world in terms of natural resources. It holds more than 60 percent of the world's proven oil reserves, mostly located in the Gulf region, and nearly half of gas reserves. Not surprisingly, oil represents close to 85 percent of merchandise exports of the region, making it highly susceptible to fluctuations in international prices. A long strand of economic literature suggests that such dependence may hurt a country's growth prospects and job creation by reducing the scope of economic diversification.

Natural Resource Abundance, Growth, and Diversification in the Middle East and North Africa: The Effects of Natural Resources and the Role of Policies investigates how the region can overcome this situation and encourage greater economic diversification. The authors explore analytical questions, such as: the impact of the real exchange rate of manufacturing and tradable services competitiveness in MENA; the role of fiscal policy in supporting diversification; how "weak links" (input sectors with low productivity) play a critical role in explaining the concentration of economic activities, in addition to the classical Dutch Disease effect; and the impact of macroeconomic factors on the drive for regional integration.

Several policy recommendations emerge. Policy makers should strive to avoid real exchange rate overvaluation through consistent fiscal policies, flexible exchange rates, and adequate product and factor market regulations. Reforms to strengthen the competition and efficiency of upstream input activities are crucial for improving the performance of downstream activities and diversification. Consistent and transparent fiscal policy is essential to reduce instability, build the fiscal space needed to invest in core infrastructure and human capital, and create a favorable environment for diversification. While regional trade integration leads to greater diversification and welfare gains for the resource-poor countries of the region, for resource-rich countries, deriving benefits from regional integration requires going beyond trade, since trade preferences tend to generate net income losses for them. It is hoped that the findings of this work will be of interest to policy makers, civil society, donors, and practitioners in MENA countries. Book jacket.

Contents:

Chapter 1 An Overview of Diversification in MENA: Rationale, Stylized Facts, and Policy Issues / Ndiamé Diop Diop, Ndiamé, Daniela Marotta Marotta, Daniela 1

The Facts: MENA Economies' Low Level of Diversification 3

Limited Diversification, Natural Resource Rents, and Growth Volatility 9

Why Is Greater Diversification Desirable in MENA? 11

The Role of Rents and Real Exchange Rates 13

The Role of Weak Links in Output Concentration 16

Fiscal Policy and Output Concentration 18

Natural Resources and-Incentives for Regional Trade Reforms 20

Notes 22

References 23

Chapter 2 Resource Abundance and Growth: Benchmarking MENA with the Rest of the World / Jaime de Melo Melo, Jaime de, Cristian Ugarte Ugarte, Cristian 27

Benchmarking MENA's Long-Term Growth and Volatility 29

Correlates of MENA's Growth Performance 36

Conclusion 60

Annex 2A Trade, Structural Change, and Natural Resources 61

Annex 2B Ten Observations on Successful Growth 71

Annex 2C Applied Tariff Protection Is Still Relatively High 72

Annex 2D Ad-Valorem Equivalents Estimations 74

Notes 78

References 82

Chapter 3 Rents, Regulatory Restrictions, and Diversification toward Services in Resource-Rich MENA / Ndiamé Diop Diop, Ndiamé, Jaime de Melo Melo, Jaime de 87

Services in MENA: Stylized Facts 89

Relative Roles of Engel's Effects in Consumption and Rents 94

The Role of Microeconomic Regulations 102

Export Diversification Opportunities for Resource-Poor MENA 105

Concluding Remarks 108

Notes 110

References 110

Chapter 4 Patterns of Diversification in MENA: Explaining MENA's Specificity / Marcelo Olarreaga Olarreaga, Marcelo, Cristian Ugarte Ugarte, Cristian 113

Empirical Methodology 115

Measuring Weak Links and Dutch Disease Effects 116

Data Description 118

Empirical Results 118

Concluding Remarks 130

Notes 138

References 140

Chapter 5 Fiscal Policy and Diversification in MENA / Ali Zafar Zafar, Ali 143

Role of Fiscal Policy in the Aftermath of the Arab Spring 144

Fiscal Policy in MENA: Stylized Facts 148

Fiscal Policy and Diversification 156

The Behavior of Fiscal Policy in MENA: Econometric Evidence 168

Concluding Remarks 169

Notes 170

References 172

Chapter 6 Natural Resource Heterogeneity and the Incentives for and Impact of Regional Integration / Celine Carrère Carrère, Celine, Julien Gourdon Gourdon, Julien, Marcelo Olarreaga Olarreaga, Marcelo 175

Trade Agreements in MENA: An Analytical Setup 177

Empirical Results 182

Concluding Remarks 190

Notes 195

References 196.

Notes:

Includes bibliographical references and index.

ISBN:

9780821395912

0821395912

9780821395929

0821395920

OCLC:

794367348