Presented at the “Meeting of Government Experts on Economic Transition” organized by the European Commission, September 26–27, 2001, Brussels. I am grateful for the comments and assistance of Edouard Martin. Ms. Aminata Touré provided valuable research assistance.
To the extent that the number of entrants to the labor force rises faster than the population, the country may benefit from a demographic dividend provided that the entrants can be fully employed without a decline in real wages. However, to the extent that this trend results in higher unemployment and welfare payments, public expenditures are likely to rise faster than public revenues.
These limitations have been moderated by diversification into fertilizer production and other chemical derivatives.
There may also be an increase in net tax proceeds depending on the source of privatization proceeds (domestic or external) and on how they are spent by the government.
The IMF trade restrictiveness index combines average MFN tariff levels with trade restriction measures (import licensing, imposition of reference prices, etc.) to rank countries from 1-10 with 10 being the most restrictive.
In Syria, both the average tariff and the trade restrictiveness index are overstated. The average tariff has been set at a high level because customs valuations have been using appreciated exchange rates. That is why the effective tariff is much lower (7.2 percent) and the customs duties yield (2 percent of GDP) is the lowest (with Algeria) of all eight countries.
Karim Nashashibi and Stefania Bazzoni: Exchange Rate Strategies and Fiscal Performance in Sub-Saharan Africa, IMF Staff Papers, March 1994.