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Mr. P. van den Boogaerde

Abstract

Arab financial assistance to developing - particularly Arab - countries rose sharply between 1973 and 1980 but fell gradually through the 1980s, owing mainly to weakening oil prices. As a percent of GNP, however, Arab contributions remain the largest among major donors. This paper surveys the volume and distribution of Arab financing from 1973 to 1989.

Mr. Pierre van den Boogaerde

Abstract

Economic developments in the Arab world during 1973–89 have been intimately affected by changes in oil production and price levels—in a direct manner for oil producing Arab countries and indirectly through official assistance, employment opportunities, and workers’ remittances for most other Arab countries. The five years following the quadrupling of oil prices in 1973–74 were characterized by a massive increase in Arab donors’ growth rates, exports, current account surpluses, and total reserves. The substantially augmented national savings were used for a sharp increase in government expenditures, especially on services, and in investments, characterized by a wide range of impressive development projects.

Mr. Pierre van den Boogaerde

Abstract

Arab donor countries contributed slightly less than $100 billion8 to developing countries and multilateral aid agencies during the 1973–89 period (Table 1). Some Arab donors provided financial aid to developing countries before 1973, but the amounts were rather modest. Net disbursements have been closely correlated with economic developments in the Arab donor countries. In line with the major increase in oil prices in 1973–74, they increased from $2.6 billion in 1973 to $8 billion in 1975, paused at an average level of about $7.5 billion annually in 1976–77, then rose again to their highest level (about $11 billion) in 1980 and in 1981.

Mr. Pierre van den Boogaerde

Abstract

In addition to their major aid programs, which began in the wake of the rise in oil prices in 1973–74, Arab donor countries established 11 multilateral organizations and funds to assist developing countries. In 1981, these were supplemented by the Arab Gulf Program for United Nations Development Organizations (AGFUND), which was to coordinate the Arab assistance offered to 15 UN bodies for humanitarian projects. A profile of multilateral Arab aid agencies is given in Table 15. The largest of these agencies are the Arab Fund for Economic and Social Development (AFESD), the Islamic Development Bank (IDB), the OPEC Fund for International Development (OFID), the Arab Monetary Fund (AMF), and the Arab Bank for Economic Development in Africa (BADEA). Two funds have ceased to exist: SAAFA was merged with BADEA in 1976 and the OAPEC Special Account was not renewed after 1976. GODE discontinued its assistance in late 1978, following the Arab donors’ decision at the time to stop aid to Egypt, but resumed its activities in 1990.

International Monetary Fund
This Selected Issues paper analyzes the recent developments in the Moroccan economy and its policy challenges over the medium term. It assesses the sustainability of public debt in Morocco. The paper uses the analytical framework for assessing debt sustainability in emerging market countries endorsed by the IMF Executive Board and compares Morocco’s vulnerabilities with those of the average emerging market country. The paper also examines the effects on Morocco’s trade pattern of the ongoing integration with the European Union within the Barcelona process.
Mr. Samir Jahjah, Mr. Ralph Chami, and Connel Fullenkamp
The role of remittances in development and economic growth is not well understood. This is partly because the literatures on the causes and effects of remittances remain separate. We develop a framework that links the motivation for remittances with their effect on economic activity. Because remittances take place under asymmetric information and economic uncertainty, there exists a significant moral hazard problem. The implication is that remittances have a negative effect on economic growth. We test this prediction using panel methods on a large sample of countries. The results indicate that remittances do have a negative effect on economic growth, which indicates that the moral hazard problem in remittances is severe.
Mr. Jacques Bouhga-Hagbe
Workers' remittances have been playing an increasingly important role in the balance of payments of many countries and can significantly contribute to the strength of their external positions. Assessing the likely stability of remittance flows could be a valuable input to the analysis of their external vulnerabilities. This paper argues that "altruism," as a motive to send money home, would contribute to the stability of these flows. Using a simple framework that relates workers' remittances to agricultural GDP, which is used as an indicator of economic "hardship" in the home country, evidence suggests that altruism could have played an important role in the flow of remittances to Egypt, Jordan, Morocco, Pakistan, and Tunisia in recent years.
Mr. Ralph Chami, Mr. Adolfo Barajas, Anjali Garg, and Connel Fullenkamp
Using data on the distribution of migrants from Africa, GDP growth forecasts for host countries, and after estimating remittance multipliers in recipient countries, this paper estimates the impact of the global economic crisis on African GDP via the remittance channel during 2009-2010. It forecasts remittance declines into African countries of between 3 and 14 percentage points, with migrants to Europe hardest hit while migrants within Africa relatively unaffected by the crisis. The estimated impact on GDP for relatively remittance-dependent countries is 2 percent for 2009, but will likely be short-lived, as host country income is projected to rise in 2010.
Ms. Yan M Sun and Udo Kock
The flow of workers' remittances to Pakistan has more than quadrupled in the last eight years and it shows no sign of slowing down, despite the economic downturn in the Gulf Cooperation Council (GCC) and other important host countries for Pakistani workers. This paper analyses the forces that have driven remittance flows to Pakistan in recent years. The main conclusions are: (i) the growth in the inflow of workers' remittances to Pakistan is in large part due to an increase in worker migration; (ii) higher skill levels of migrating workers have helped to boost remittances; (iii) other imporant determinants of remittances to Pakistan are agriculture output and the relative yield on investments in the host and home countries.
Mr. Jacques Bouhga-Hagbe
This paper provides a model on how altruism, "attachment" to the home country, and portfolio diversification may act as potential motives behind workers' remittances. It shows that the level of workers' remittances depends on how great are their degrees of altruism and "attachment" to their home country, and should also depend on interest rate differentials between the home country and the country of residence if portfolio diversification motives are significant in the decision to remit. The model is applied to Morocco using co-integration techniques. The paper then discusses the stability of remittances in Morocco and the policy implications in light of the empirical findings.