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Middle East and Central Asia > Saudi Arabia

You are looking at 1 - 10 of 11 items for :

  • Type: Journal Issue x
  • Nonrenewable Resources and Conservation: General x
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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 Staff Climate Notes
Key Challenges Faced by Fossil Fuel Exporters during the Energy Transition
Diego Mesa Puyo
,
Augustus J Panton
,
Tarun Sridhar
,
Martin Stuermer
,
Christoph Ungerer
, and
Alice Tianbo Zhang
The global energy transition is affecting fossil fuel exporters from multiple angles. It is adding to longstanding uncertainties on relative movements of fossil fuel demand and supply—which impact fossil fuel-related exports, fiscal flows, investment and subsequently external and fiscal accounts, economic growth, and employment. While policymakers are very familiar with these challenges, they now also face expectations of a permanent decline in the long-run global demand for fossil fuels. Key factors that could determine country-level impacts include (i) the type of fossil fuel a country exports (ii) extraction costs and (iii) country characteristics. The monitoring and mitigation of fiscal risks will need to be stepped up. Fiscal policy also has a role in reducing domestic emissions, encouraging adoption of low-carbon technologies, and helping those most vulnerable to changes from the transition. Broader macroeconomic risks can be reduced by accelerating ongoing structural reforms that support alternative engines of growth. Low- or zero-carbon emission energy industries could offer new avenues that build on existing fossil fuel knowledge and infrastructure. Concurrently, improved financial regulation and supervision could reduce financial sector exposures. Finally, international coordination on the design and implementation of climate policy as well as international transfer schemes (financing and capacity development) could reduce uncertainties surrounding the transition path and associated adverse economic consequences.
Keywords:
Macroeconomic policy; climate change; energy transition; fossil fuel exporters; commodity market; climate mitigation; economic diversification; international coordination; IMF staff Climate note; IMF staff Climate Note 2024/001; fossil fuel exporter; building financial asset buffer; cost exporter; Non-renewable resources; Exports; Oil; Renewable energy; Global
Cover IMF Working Papers
Cross-Border Risks of a Global Economy in Mid-Transition
Etienne Espagne
,
William Oman
,
Jean-François Mercure
,
Romain Svartzman
,
Ulrich Volz
,
Hector Pollitt
,
Gregor Semieniuk
, and
Emanuele Campiglio
This paper analyzes the cross-border risks that could result from a decarbonization of the world economy. We develop a typology of cross-border risks and their respective channels. Our qualitative and quantitative scenario analysis suggests that the mid-transition – a period during which fossil-fuel and low-carbon energy systems co-exist and transform at a rapid pace – could have profound stability and resilience implications for global trade and the international financial system.
Keywords:
Climate change; transition risks; cross-border risks; trade; international money and finance.; asset purchase; energy export; baseline export; baseline GDP; cost of capital; Non-renewable resources; Climate policy; Exports; Global
Cover IMF Working Papers
Still Not Getting Energy Prices Right: A Global and Country Update of Fossil Fuel Subsidies
Ian W.H. Parry
,
Mr. Simon Black
, and
Nate Vernon
This paper provides a comprehensive global, regional, and country-level update of: (i) efficient fossil fuel prices to reflect their full private and social costs; and (ii) subsidies implied by mispricing fuels. The methodology improves over previous IMF analyses through more sophisticated estimation of costs and impacts of reform. Globally, fossil fuel subsidies were $5.9 trillion in 2020 or about 6.8 percent of GDP, and are expected to rise to 7.4 percent of GDP in 2025. Just 8 percent of the 2020 subsidy reflects undercharging for supply costs (explicit subsidies) and 92 percent for undercharging for environmental costs and foregone consumption taxes (implicit subsidies). Efficient fuel pricing in 2025 would reduce global carbon dioxide emissions 36 percent below baseline levels, which is in line with keeping global warming to 1.5 degrees, while raising revenues worth 3.8 percent of global GDP and preventing 0.9 million local air pollution deaths. Accompanying spreadsheets provide detailed results for 191 countries.
Keywords:
fossil fuel subsidies; efficient fuel prices; supply costs; climate change; local air pollution mortality; revenue gains; spreadsheet tools.; fossil fuel subsidy; supply cost; price reform; fossil fuel; fuel user price; Non-renewable resources; Fuel prices; Energy subsidies; Greenhouse gas emissions; Global
Cover IMF Working Papers
Mitigation Policies for the Paris Agreement: An Assessment for G20 Countries
Ian W.H. Parry
,
Victor Mylonas
, and
Nate Vernon
Following submission of greenhouse gas (GHG) mitigation commitments or pledges (by 190 countries) for the 2015 Paris Agreement, policymakers are considering specific actions for their implementation. To help guide policy, it is helpful to have a quantitative framework for understanding: i) the main impacts (on GHGs, fiscal balances, the domestic environment, economic welfare, and distributional incidence) of emissions pricing; ii) trade-offs between pricing and other (commonly used) mitigation instruments; and iii) why/to what extent needed policies and their impacts differ across countries. This paper provides an illustrative sense of this information for G20 member countries (which account for about 80 percent of global emissions) under plausible (though inevitably uncertain) projections for future fuel use and price responsiveness. Quantitative results underscore the generally strong case for (comprehensive) pricing over other instruments, its small net costs or often net benefits (when domestic environmental gains are considered), but also the potentially wide dispersion (and hence inefficiency) in emissions prices implied by countries’ mitigation commitments.
Keywords:
WP; co; electricity Co; tons Co; percent Co; road fuel price elasticity; Paris Agreement; carbon pricing; G20 countries; instrument choice; air pollution mortality; tax incidence; welfare effects; climate mitigation; fuel price elasticity; fuel price responsiveness; cost increase; monopoly price distortion; welfare cost; responsiveness of emission; countries flexibility; fuel price response; price change; price projection; Carbon tax; Greenhouse gas emissions; Non-renewable resources; Fuel prices; Fuel tax; Africa; Global
Cover IMF Working Papers
How Much Carbon Pricing is in Countries’ Own Interests? The Critical Role of Co-Benefits
Ian W.H. Parry
,
Mr. Chandara Veung
, and
Mr. Dirk Heine
This paper calculates, for the top twenty emitting countries, how much pricing of carbon dioxide (CO2) emissions is in their own national interests due to domestic co-benefits (leaving aside the global climate benefits). On average, nationally efficient prices are substantial, $57.5 per ton of CO2 (for year 2010), reflecting primarily health co-benefits from reduced air pollution at coal plants and, in some cases, reductions in automobile externalities (net of fuel taxes/subsidies). Pricing co-benefits reduces CO2 emissions from the top twenty emitters by 13.5 percent (a 10.8 percent reduction in global emissions). However, co-benefits vary dramatically across countries (e.g., with population exposure to pollution) and differentiated pricing of CO2 emissions therefore yields higher net benefits (by 23 percent) than uniform pricing. Importantly, the efficiency case for pricing carbon’s co-benefits hinges critically on (i) weak prospects for internalizing other externalities through other pricing instruments and (ii) productive use of carbon pricing revenues.
Keywords:
WP; price; net; pricing; carbon pricing; co-benefits; air pollution; fuel taxes; top twenty emitters; fuel price elasticity; uniform price; price responsiveness; welfare cost; cross-price effect; price-gap concept; net benefit; responsiveness of fuel use; mitigation cost; countries price carbon; Carbon tax; Greenhouse gas emissions; Non-renewable resources; Public expenditure review; Fuel prices; Global; Africa
Cover IMF Working Papers
Optimal Oil Production and the World Supply of Oil
Mr. Nikolay Aleksandrov
,
Mr. lajos Gyurko
, and
Mr. Raphael A Espinoza
We study the optimal oil extraction strategy and the value of an oil field using a multiple real option approach. The numerical method is flexible enough to solve a model with several state variables, to discuss the effect of risk aversion, and to take into account uncertainty in the size of reserves. Optimal extraction in the baseline model is found to be volatile. If the oil producer is risk averse, production is more stable, but spare capacity is much higher than what is typically observed. We show that decisions are very sensitive to expectations on the equilibrium oil price using a mean reverting model of the oil price where the equilibrium price is also a random variable. Oil production was cut during the 2008–2009 crisis, and we find that the cut in production was larger for OPEC, for countries facing a lower discount rate, as predicted by the model, and for countries whose governments’ finances are less dependent on oil revenues. However, the net present value of a country’s oil reserves would be increased significantly (by 100 percent, in the most extreme case) if production was cut completely when prices fall below the country's threshold price. If several producers were to adopt such strategies, world oil prices would be higher but more stable.
Keywords:
WP; equilibrium price; Oil production; Real Options; Capacity Expansion; Equilibrium Price of Oil; OPEC; oil price; extraction cost; threshold price; continuation value; price shock; investment cost; Oil prices; Oil; Asset prices; gas and mining taxes
Cover IMF Working Papers
Current Account and Precautionary Savings for Exporters of Exhaustible Resources
Mr. Rudolfs Bems
and
Mr. Irineu E de Carvalho Filho
Exporters of exhaustible resources have historically exhibited higher income volatility than other economies, suggesting a heightened role for precautionary savings. This paper uses a parameterized small open economy model to quantify the role of precautionary savings in economies with exhaustible resources, when the only source of uncertainty is the price of the exhaustible resource. Results show that the precautionary motive can generate sizable external sector savings. When aggregated over the sample countries, precautionary savings in 2006 add up to 3.2 percent of GDP. The quantitative importance of the precautionary motive varies considerably across the sample countries and is driven primarily by the weight of exhaustible resource revenues in future income. The parameterized model fares well at capturing current account balances in both cross-section and time-series data.
Keywords:
WP; precautionary saving; interest rate; open economy
Cover IMF Staff Country Reports
United Arab Emirates: Statistical Appendix
International Monetary Fund
In this paper, the following statistical data of the United Arab Emirates are presented: sectoral origin of GDP at constant prices, real growth by economic sector, sectoral distribution of nominal GDP, use of resources at current prices, per capita GDP and distribution of GDP at factor cost by the Emirates, oil and natural gas production, exports and prices, average crude oil prices, agricultural production, population of the Emirates, sectoral distribution of civilian employment, pension fund operations, Abu Dhabi development expenditures, Dubai government operations, interest rates and balance of payments, and direction of trade.
Keywords:
ISCR; CR; U.A.E. dirham; U.A.E. BOP accounts; central bank; export; U.A.E. BOP account; oil export price; development expenditure; U.A.E. University; Oil; Exports; Commercial banks; Imports; Oil sector; Middle East
Cover Policy Papers
What Hinders Investment in the Oil Sector?
International Monetary Fund
NULL
Keywords:
PP; Opec; investment; price; cost; OPEC producer; OPEC production; OPEC country; OPEC oil; targeted level; energy efficiency; OPEC reserve; Oil; Oil prices; Oil sector; Foreign direct investment; Global; Middle East