Narrow Your Choices

Refine By Topic

Refine By Series

Refine By Language

Refine By Date

—

Refine By IMF Taxonomy

Refine By JEL Taxonomy

Refine by LOC Taxonomy

Refine By THEMA Taxonomy

  • Print
  • Save

Middle East and Central Asia > Saudi Arabia

You are looking at 1 - 10 of 58 items for :

  • Type: Journal Issue x
Clear All Modify Search
Cover IMF Working Papers
Market Power in the Middle East
Yevgeniya Korniyenko
,
Ahmed K Tohamy
, and
Weining Xin
The Middle East (ME) is often perceived as region with rentier economies and uncompetitive markets. Evidence of market power in the region however is scant. In this paper, we ask the following three questions: Is the ME uniquely uncompetitive? Has the evolution of market power in the region traced the global rise in market power? What government policies and actions influenced the market power in the region and can taxes be a way to even the playing field? To answer these questions, we utilize comprehensive firm-level data from Compustat between 2004 and 2022 and employ two methods for estimating markups (production function and cost-share approach). We document that market power among listed firms in the ME is higher than in the US, but on a downward trend. We find that the value-added tax (VAT) reforms introduced by some Gulf states from 2018 to 2022 resulted in a reduction of market power, an additional benefit beyond increasing fiscal space. While policymakers should continue to use available regulatory levers to achieve economic efficiency and a level playing field, VAT could be considered as an alternative instrument.
Keywords:
Middle East; Market Power; Markup; Firm Behavior; market power in the Middle East; markups estimate; sample representativeness; markups in GCC country; markups dynamics; Value-added tax; Competition; Inflation; Oil sector; Global
Cover IMF Staff Country Reports
Pakistan: 2024 Article IV Consultation and Request for an Extended Arrangement under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Pakistan
International Monetary Fund. Middle East and Central Asia Dept.
The 2024 Article IV Consultation discusses that Pakistan has taken key steps to restoring economic stability with consistent policy implementation under the 2023–2024 Stand-by Arrangement (SBA). The discussions focused on Pakistan’s medium-term prospects, which helped inform policies and define program objectives. The new government formed after the February elections has continued efforts to strengthen economic conditions and is embarking on a multi-year home-grown reform program to achieve resilient and inclusive economic growth. The program aims to reinforce the authorities’ efforts to bolster policy credibility and entrench stability and accelerate structural reforms to strengthen public finances, improve the provision of critical public services, and create a favorable environment for private-led growth.
Keywords:
reform agenda; SBP's effort; governance arrangement; exchange rate movement; Pakistani authorities; Tariffs; Global
Cover Policy Papers
Industrial Policy Coverage in IMF Surveillance—Broad Considerations
International Monetary Fund
The paper aims to provide a conceptual framework and guiding principles for the coverage of Industrial Policy (IP) in IMF surveillance. It proposes a working definition of industrial policy, discusses its objectives and main instruments, and provides a brief review of academic literature on IP. The paper discusses the four broad sets of considerations for assessing IP: justification, design, cost-benefit assessment, and implementation. It stresses that IP should be covered in IMF surveillance when it is deemed macro-critical and/or has the potential to generate significant cross-border spillovers. The paper also discusses specific aspects of industrial policies, including trade-related IP, green IP, Special Economic Zones (SEZs), and State-Owned Enterprises (SOEs), and provides examples of the IP coverage in the Article IV consultations with China, Euro Area, Indonesia, Saudi Arabia, and the United States.
Keywords:
Industrial Policy; Horizontal Policies; Structural Policies; Trade Policy; Green Industrial Policy; Special Economic Zones; State-Owned Enterprises; IP measure; IMF surveillance; IP effectiveness; IP definition; transparency policy; IP type; Spillovers; Institutional View on capital flows; Tax incentives; Global
Cover Departmental Papers
Revenue Mobilization for a Resilient and Inclusive Recovery in the Middle East and Central Asia
Ms. Genevieve Verdier
,
Brett Rayner
,
Ms. Priscilla S Muthoora
,
Charles Vellutini
,
Ling Zhu
,
Vincent de Paul Koukpaizan
,
Alireza Marahel
,
Mahmoud Harb
,
Imen Benmohamed
,
Mr. Shafik Hebous
,
Andrew Okello
,
Nathalie Reyes
,
Thomas Benninger
, and
Bernard Sanya
Domestic revenue mobilization has been a longstanding challenge for countries in the Middle East and Central Asia. Insufficient revenue has often constrained priority social and infrastructure spending, reducing countries’ ability to reach the Sustainable Development Goals, improve growth prospects, and address climate related challenges. Moreover, revenue shortfalls have often been compensated by large and sustained debt accumulation, raising vulnerabilities in some countries, and limiting fiscal space to address future shocks. The COVID-19 pandemic and the war in Ukraine have compounded challenges to sustainable public finances, underscoring the need for revenue mobilization efforts. The recent global crises have also exacerbated existing societal inequalities and highlighted the importance of raising revenues in an efficient and equitable manner. This paper examines the scope for additional tax revenue mobilization and discusses policies to gradually raise tax revenue while supporting resilient growth and inclusion in the Middle East and Central Asia. The paper’s main findings are that excluding hydrocarbon revenues, the region’s average tax intake lags those of other regions; the region’s fragile and conflict-affected states (FCS) face particular challenges in mobilizing tax revenue; In general, there is considerable scope to raise additional tax revenue; countries have made efforts to raise tax collection, but challenges remain; tax policy design, notably low tax rates and pervasive tax exemptions, is an important factor driving tax revenue shortfalls; weak tax compliance, reflecting both structural features and challenges in revenue administration, also plays a role; and personal income tax systems in the region vary in their progressivity—the extent to which the average tax rate increases with income—and in their ability to redistribute income. These findings provide insights for policy action to raise revenue while supporting resilient growth and inclusion. The paper’s analysis points to these priorities for the region to improve both efficiency and equity of tax systems: improving tax policy design to broaden the tax base and increase progressivity and redistributive capacity; strengthening revenue administration to improve compliance; and implementing structural reforms to incentivize tax compliance, formalization, and economic diversification.
Keywords:
Revenue mobilization; revenue gaps; tax compliance; compliance gaps; tax policy; tax revenue gap; estimated tax; Gini coefficient; revenue challenge; tax revenue shortfall; systems in the region; tax Effort; tax ratio; Personal income tax; Tax administration core functions; Tax collection; Corporate income tax; Middle East and Central Asia; Global; Central Asia and the Caucasus; Middle East; Tax return filing compliance
Cover Departmental Papers
Economic and Environmental Benefits from International Cooperation on Climate Policies
Jean Chateau
,
Ms. Florence Jaumotte
, and
Gregor Schwerhoff
This paper discusses and analyzes various international mechanisms to scale up global action on climate mitigation and address the policy gap in this area. Despite the new commitments made at COP 26, there is still an ambition and a policy gap at the global level to keep temperature increases below the 2°C agreed in Paris. Avoiding the worst outcomes of climate change requires an urgent scaling up of climate policies. Recent policy proposals include the idea of common minimum carbon prices, which underlie the IMF’s international carbon price proposal (Parry, Black, and Roaf 2021) and the climate club proposal of the German government. While global carbon prices are not a new idea, the new elements are the use of carbon price floors—which allow countries to do more if they wish—and the differentiation of carbon price floors by level of development. In the absence of international coordination, countries with ambitious climate policies are considering introducing a border carbon adjustment mechanism to prevent domestic producers from being at a competitive disadvantage due to more ambitious domestic climate policies. An interesting question from the global perspective is whether border carbon adjustment would deliver substantial additional emissions reductions or incentivize other countries to join a carbon price floor agreement.
Keywords:
climate policy; border carbon adjustment; international coordination; global minimum carbon prices; ICPF scenario; carbon price floor agreement; B. policy scenario overview; baseline emission projection; GDP cost; Greenhouse gas emissions; Climate policy; Climate change; Global; Africa; East Asia; Caribbean
Cover IMF Working Papers
The Role of Market Structure and Timing in Determining VAT Pass-Through
Mr. Matthieu Bellon
We examine the role of market characteristics and timing in explaining observed heterogeneity in VAT pass-through. We first extend existing theory to characterize the roles of imperfect competition and product differentiation, then investigate these relationships empirically using a panel of 14 Eurozone countries between 1999 and 2013. We find important roles for product market regulation and product quality, and little impact of advance announcement of reforms. Our findings have important implications for policy-makers considering VAT rate adjustments, by illuminating which of the consumers or the producers would experience the brunt of a reform across different settings.
Keywords:
Value added tax; Price effect; Pass through; Competition; Product Differentiation; pass-through heterogeneity; VAT pass-through; pass-through effect; baseline pass-through; elasticity coefficient; imperfect competition; pass-through adjustment; Value-added tax; Consumption; Commodity markets; Consumer prices; Europe
Cover IMF Staff Country Reports
Pakistan: First Review Under the Extended Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Pakistan
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Pakistan’s First Review Under the Extended Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria. Pakistan’s program is on track and has started to bear fruit. However, risks remain elevated. Strong ownership and steadfast reform implementation are critical to entrench macroeconomic stability and support robust and balanced growth. The authorities are committed to sustaining the progress on fiscal adjustment to place debt on a downward path. The planned reforms include strengthening tax revenue mobilization, including the elimination of tax exemptions and loopholes, and prudent expenditure policies. Preparations for a comprehensive tax policy reform should start early to ensure timely implementation. The authorities have adopted a comprehensive plan to address the accumulation of arrears in the power sector. Its full implementation is key to improve collection, reduce losses, and enhance governance. Timely and regular adjustment of energy tariffs will bring the sector in line with cost recovery.
Keywords:
ISCR; CR; exchange rate; government; reform implementation; implementation; SDR; private sector investment; government effort; reform of the state-owned enterprise sector; Pakistani authorities; economic reform reform program; Budget planning and preparation; Tariffs; Global; Asia and Pacific
Cover IMF Working Papers
Macroeconomic Effects of Reforms on Three Diverse Oil Exporters: Russia, Saudi Arabia, and the UK
Samya Beidas-Strom
and
Marco Lorusso
We build and estimate open economy two-bloc DSGE models to study the transmission and impact of shocks in Russia, Saudi Arabia and the United Kingdom. After accounting for country-specific fiscal and monetary sectors, we estimate their key policy and structural parameters. Our findings suggest that not only has output responded differently to shocks due to differing levels of diversification and structural and policy settings, but also the responses to fiscal consolidation differ: Russia would benefit from a smaller state foot-print, while in Saudi Arabia, unless this is accompanied by structural reforms that remove rigidities, output would fall. We also find that lower oil prices need not be bad news given more oil-intensive production structures. However, lower oil prices have hurt these oil producers as their public finances depend heavily on oil, among other factors. Productivity gains accompanied by ambitious structural reforms, along with fiscal and monetary reforms could support these economies to achieve better outcomes when oil prices fall, including via diversifying exports.
Keywords:
WP; exchange rate; monetary policy; trade balance; labour market; DSGE model; Economic diversification; Shocks and commodity exporters; Bayesian estimation; Fiscal policy; Inflation targeting; Managed float; Oil intensity; nominal interest rate; state footprint; UK macroeconomy; UK experience; price indexation; UK policy rate; UK model; core inflation; UK state; UK benchmark; oil demand; Oil prices; Oil; gas and mining taxes; Consumption; Global
Cover IMF Staff Country Reports
Saudi Arabia: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
This Selected Issues paper explores policies to drive diversification for Saudi Arabia. Diversification is needed to create jobs for Saudis and to mitigate the impact of uncertainty in oil markets. Although the business climate should be improved, and remaining infrastructure gaps addressed, reforms need to go beyond these areas. Diversification in Saudi Arabia that creates jobs for nationals could be held back by the effects of relatively high wages and their impact on cost competitiveness. Creative solutions are needed to address the impact of high government wages and employment on competitiveness. Industrial policy could help overcome the incentives that encourage companies to focus on the nontradable sector, but should be handled carefully, keeping lessons from other countries’ experiences in mind. Export orientation and competition are crucial mechanisms to ensure discipline. Strengthening human capital to raise productivity and provide workers with the skills needed in the private sector will be essential to success.
Keywords:
ISCR; CR; IMF staff calculation; oil revenue; GCC VAT agreement; venture capital; opportunity cost; revenue benefit; excise tax; labor market; tax revenue; tax rate; Value-added tax; Exports; Excises; Oil; Global
Cover IMF Staff Country Reports
Saudi Arabia: Selected Issues
International Monetary Fund. Middle East and Central Asia Dept.
Selected Issues
Keywords:
ISCR; CR; IMF staff calculation; oil revenue; GCC VAT agreement; venture capital; opportunity cost; revenue benefit