International Monetary Fund. Middle East and Central Asia Dept.
This paper describes that with the global downturn in 2007–2009, some of these achievements were partially reversed due to severe negative shocks to growth and changes in the composition of growth. While compared to peer countries, inequality in Armenia remains low; it has increased somewhat since 2009. Poverty has marginally declined after the global crisis, but unemployment remains high. Creating jobs, reducing poverty, and higher inclusiveness would require sustained high growth and implementing pro-poor policies. Better-targeted social policies and more attention to the regional distribution of spending would also help reduce poverty and improve inclusiveness. Poverty declined during the 2000s, supported by high growth. Poverty rate decreased by one third and the extreme poverty declined by half during 2004–2008. In addition to strong growth which created many job opportunities, higher social expenditures played a key role in lowering poverty. Regional disparities of poverty levels remain very high. These disparities, however, are geographical and not across the urban/rural divide. Indeed, contrary to the common perception, poverty rates in urban and rural areas are almost the same.
International Monetary Fund. External Relations Dept.
Evangelos A. Calamitsis, Director of the IMF’s African Department, recently spoke with the IMF Survey about the IMF’s work in Africa. Calamitsis, a Greek national, has headed the African Department since 1994; he holds a Ph.D. in economics from Harvard University.
Mishel Ghassibe, Maximiliano Appendino, and Samir Elsadek Mahmoudi
This paper offers empirical evidence that greater financial inclusion of small and medium enterprises (SMEs) can promote higher economic growth and employment, especially in the Middle East and Central Asia regions. First, we show that countries with higher SME financial inclusion exhibit more effective monetary policy transmission and tax collection. Second, we find substantial employment and labor productivity growth gains at the firm level from access to credit, gains that are higher for SMEs. We also obtain evidence of a substantial positive impact on SME employment and labor productivity growth from improved credit bureau coverage and insolvency regimes. Finally, cross-country aggregate evidence confirms the employment and growth gains from SME financial inclusion, which appear larger in the Middle East and Central Asia than in other regions.