Selim Elekdag, Mr. Saade Chami, and Mr. Ivan Tchakarov
This paper uses a variant of the IMF's Global Economy Model (GEM) to estimate the macroeconomic effects of Yemen's full accession into the Gulf Cooperation Council (GCC). After calibrating the model to Yemen and the GCC countries, several simulations were carried out to estimate the potential impact of economic integration on both. The paper draws two fundamental conclusions. First, further steps in regional integration would enhance competition and produce large economic benefits for both Yemen and the GCC countries. In particular, we show that in some cases economic integration could increase GDP in Yemen by as much as 18 percent and in the GCC by as much as 20 percent over the long run. Second, even if market structures do not improve substantially, GCC enlargement can still generate substantial spillover gains with consumption increasing by up to 7 percent in Yemen and 8 percent in the GCC, respectively.
This chapter discusses the changes that have taken place in the underlying structural relationships determining government expenditures between 1975 and 1986. The paper describes the methodological problems in analyzing the determinants of government expenditure patterns, and the issues involved in making cross-country expenditure comparisons, and the problems confronting country economists in assessing a country's expenditure profile. The Tait-Heller study concluded that the international expenditure comparison (IEC) framework provided a “starting point” for analysis. In many respects, this conclusion would still appear valid; if anything, the issues associated with using the IEC indices have become more rather than less complex. Data limitations also pose a limiting factor on the usefulness of an analysis of the IEC indices of a country, and even more strongly suggest its use only as complementary to more detailed sectoral and economic analyses of expenditure profiles. The results for the developing countries in the European region are almost identical to those observed in Africa, with the key exception being an increased priority for expenditure on social security and welfare and a decline in the priority attached to education.
A review of the flows and expected changes in the volume and characteristics of international labor migration to eight oil producing countries of the Middle East and North Africa. By 1985, expatriate workers are expected to hold an overwhelming majority of the professional and skilled jobs in the area, and at least one third of all jobs.
Mr. Bjoern Rother, Ms. Gaelle Pierre, Davide Lombardo, Risto Herrala, Ms. Priscilla Toffano, Mr. Erik Roos, Mr. Allan G Auclair, and Ms. Karina Manasseh
In recent decades, the Middle East and North Africa region (MENA) has experienced more frequent and severe conflicts than in any other region of the world, exacting a devastating human toll. The region now faces unprecedented challenges, including the emergence of violent non-state actors, significant destruction, and a refugee crisis bigger than any since World War II. This paper raises awareness of the economic costs of conflicts on the countries directly involved and on their neighbors. It argues that appropriate macroeconomic policies can help mitigate the impact of conflicts in the short term, and that fostering higher and more inclusive growth can help address some of the root causes of conflicts over the long term. The paper also highlights the crucial role of external partners, including the IMF, in helping MENA countries tackle these challenges.
Two years ago, citizens in the Arab world—fired by their ideals and visions of a better life—ignited a social movement that inspired people around the globe. In Egypt, Jordan, Libya, Morocco, Tunisia, and Yemen—the so-called Arab countries in transition—people embraced change, ushering in a new era. This issue of F&D looks at the difficulties of this transition, focusing on long-standing forces that shape the region’s economy and offering options for moving ahead to achieve strong, inclusive growth. • Masood Ahmed, Director of the IMF’s Middle East and Central Asia Department, maps out an agenda for modernizing and diversifying the region’s economies in “Toward Prosperity for All.” • In “Freedom and Bread Go Together,” Marwan Muasher addresses the intersection of economic progress and political change. • Vali Nasr, in a Point of View column, underscores the vital role small and medium-sized enterprises play in a successful democratic transition. Elsewhere in this issue, we look at how surging oil and gas production in the United States could shake up global energy markets; the effect of uncertainty on economic growth; and Mexico’s competitiveness rebound. F&D's People in Economics series profiles Christina Romer, former chair of the U.S. Council of Economic Advisers and an architect of the U.S. stimulus package; and the latest installment in our Back to Basics series explains how structural policies help to both stabilize and strengthen economies.