ECONOMIC CHALLENGES FACING MIDDLE EASTERN AND NORTH AFRICAN COUNTRIES

Transcription

1 ECONOMIC CHALLENGES FACING MIDDLE EASTERN AND NORTH AFRICAN COUNTRIES

2 Also by N emat Shafik PROSPECTS FOR MIDDLE EASTERN AND NORTII AFRICAN ECONOMIES: From Boom to Bust and Back? REVIVING PRIVATE INVESTMENT IN DEVELOPING COUNTRIES: Empirical Studies and Policy Lessons (editor with A. Chhibber and M. Dailami)

3 Economic Challenges Facing Middle Eastern and North African Countries Alternative Futures Edited by Nemat Shafik Foreword by Heba Handoussa ~ 1-t'Sr~1 in associalion with ~ ~ Palgrave Macmillan

4 First published in Great Britain 1998 by MACMILLAN PRESS LTD HoundmiIls, Basingstoke, Hampshire RG21 6XS and London Companies and representatives throughout the world A catalogue record for this book is available from the British Library. ISBN ISBN (ebook) DOI / First published in the United States of America 1998 by ST. MARTIN'S PRESS, INC., Scholarly and Reference Division, 175 Fifth Avenue, New York, N.Y ISBN Library of Congress Cataloging-in-Publication Data Economic chauenges facing Middle Eastern and North African countries : alternative futures I edited by Nemat Shafik. p. cm. Includes bibliographical references and index. ISBN (cloth) I. Middle East-Economic policy. 2. Africa, North-Economic policy. 3. Economic forecasting-middle East. 4. Economic forecasting-africa, North. 5. Middle East-Economic conditions Africa, North-Economic conditions. I. Shafik, Nemat. HC E DC CIP Economic Research Forum 1998 AU rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any Iicence permitting Iimited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London WIP 9HE. Any person who does any unauthorised act in relation to this publication may be Iiable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act This book is printed on paper suitable for recycling and made from fuuy managed and sustained forest sources. \ The findings, interpretations, and conclusions expressed in this volume are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries they represent.

5 To Talaat Shafik

6 Contents List 0/ Figures and Tables Foreword by Heba Handoussa Notes on the Contributors IX Xl xii 1 Eeonomie Challenges Faeing Middle Eastern and North Afriean Countries: An Overview Nemat Shafik PART I PERSPECTIVES FROM TUE MAGHREB 2 Adjustment, Strategie Planning, and the Moroccan Economy Bachir Hamdouch 3 Competition Polieies and Deregulation in Tunisia Mohamed Hedi Lahouel PART 11 PERSPECTIVES FROM TUE MASHREQ 4 AVision for Egypt in 2012 Heba Handoussa and Hanaa Kheir-El-Din 5 The State and the Private Seetor in Jordan Taher H. Kanaan 6 The Palestinian Eeonomy: Alternative Futures George T Abed 7 Reeonstrueting Lebanon's Economy Georges Corm 8 Syria: Strategie Eeonomie Issues Nabil Sukkar VII

7 viii PART m Contents PERSPEcrIVES FROM TURKEY, SUDAN, IRAN, ANDTHEGULF 9 Determinants of Economie Growth in Turkey Sübidey Togan Sudan: Toward a Strategie Vision for Peace and Development Ibrahim A. Elbadawi Struetural Adjustment and the Iranian Economy Massoud Karshenas Policies and Economie Potential in the Countries of the Gulf Cooperation Council Hossein Askari. Maha Bazzari. and William Tyler 225 Index 257

8 List of Figures and Tables Figures 9.1 GDP growth, Turkey, Per capita income, Iran and various regions, Per capita income, Iran, Republic of Korea, and Turkey, Manufacturing output, employment, and productivity, Iran, Real wages and the cost and price structure in manufacturing, Iran, Tables 2.1 Macroeconomic indicators, Morocco, various years Restricted and liberalized imports, Tunisia, Unrestricted imports, Tunisia, Domestic production protected by quantitative restrictions, Tunisia, Nominal domestic protection by sector, Tunisia, Effective domestic protection by sector, Tunisia, Gross domestic product in the public and private sectors by economic activity, Jordan, Value as added in the public and private sectors, Jordan, Public financing, various countries, A5.1 Performance of public shareholding companies listed in the Amman Financial Market, A5.2 Public entities and employment Inflation rates and exchange rates, Lebanon, Destination of Syrian exports, Access to health services, safe water, and sanitation, Syria, External financing, Syria, External debt ratios, Syria, Economic indicators and gross domestic product, Sudan, fiscal Macroeconomic indicators, Sudan, lx

9 x List of Figures and Tab/es 10.3 Costs of civil war in Sudan Four stages of agricultural transformation Structure and growth of the manufacturing sector in Iran, Turkey, and Republic of Korea Macroeconomic indicators, Iran, Economic indicators, Gulf Cooperation Council, Required savings rates with different life of oil reserves, size of nonoil economy, and rates of real return Actuallife of oil reserves, size of nonoil economy, and national and required savings rates, GCC Trade and current account balances, GCC, 1980 and Revenues, expenditures, and budget balances, GCC, Fuel, electricity, and water subsidies, GCC, Expatriate labor as a share of total labor force, GCC, Population structures, GCC, Actual and projected growth rates for water consumption, GCC, Projected consumption of desalinated water, GCC,

10 Foreword The Economic Research Forum for the Arab Countries, Iran and Turkey (ERF) is an independent, nonprofit networking institution based in Cairo that prornotes and funds policy-oriented research. The ERF develops and coordinates research activities for a core constituency of research fellows primarily from the region but also operating out of institutions elsewhere in the world. An important part of the ERF's mandate is to contribute to capacity building in economic research and to the policy debate in the Middle East and North Africa. This volume of country studies on key issues facing economies in the region is the third to be published by the ERF as part of its efforts to disseminate the findings of ongoing research on the Arab countries, Iran, and Turkey. This book is complemented by a companion volume of thematic studies by international scholars titled Prospects for Middle Eastern and North African Economies: From Boom to Bust and Back? The papers here provide an important local perspective on the broader themes outlined in the companion volume. The implications of changes in the world economy, in the role of the private sector, and in the need for human resource development are analyzed at the country level by leading development thinkers in the region. Nowhere else will readers find such a combination of contemporary empirical work and policy insights on such a large number of economies in the Middle East and North Africa. We hope that both books will contribute to the debate in the region about its economic future and inform policy decisions in these countries in the coming years. This book and its companion volume could not have been produced without the efforts of a number of people. Gillian Potter, the publications director of the ERF, helped identify publication outlets for the books. Nemat Shafik helped plan the workshop in Tunisia and commissioned many of the papers. Paul Holtz, of American Writing Corporation, edited the manuscript. Azeb Yideru kept track of numerous authors around the world with great efficiency. Without the efforts of these people, this important book and its companion volume would not have seen the light of day. HEBA HANDOUSSA Managing Director Economic Research Forum for the Arab Countries. Iran and Turkey Xl

11 Notes on the Contributors George T. Abed is Senior Advisor in the Fiscal Affairs Department at in the International Monetary Fund. HOS!Iein Askari is chair of the Department of International Business, School of Business and Public Management, at the George Wasbington University. Maha Bazzari was a summer intern at the W orld Bank when tbis volume was written. Georges Corm is an independent economic and financial consultant based in Paris and Beirut. Ibrabim A. Elbadawi is Research Coordinator of the Mrican Economic Research Consortium in Nairobi. Bachir Hamdouch is Professor of Economics at the National Institute of Statistics and Applied Economics in Morocco. Heba Handoussa is Managing Director of the Economic Research Forum for the Arab Countries, Iran and Turkey. Taber H. Kanaan is Vice President of Computer and Communication Systems in Amman. Massoud Karshenas is Reader in Economics in the School of Oriented and African Studies at the University of London. Hana. Kheir-EI-Din is Chair of the Economics Department at Cairo University. Mobamed Hedi Lahouel is Professor of Economics at Faculte de Sciences Economiques in Tunis. Nemat Sbafik is Research Fellow at the Economic Research Forum for the Arab Countries, Iran and Turkey and manager of the Private Sector Team in the Middle East and North Africa Region at the XlI

12 Notes on the Contributors X1l1 World Bank. While editing this book she was a visiting associate professor at the Wharton School of the University of Pennsylvania. Nabil Sukkar is Managing Director of the Syrian Consulting Bureau for Development and Investment in Damascus. Sübidey Togan is Dean of the Faculty of Economies, Administrative, and Social Sciences at Bilkent University. William Tyler is lead economist in Middle East and North Africa Country Department 11 at the World Bank.