{
"authors": [],
"type": "pressRelease",
"centerAffiliationAll": "dc",
"centers": [
"Carnegie Endowment for International Peace"
],
"collections": [],
"englishNewsletterAll": "menaTransitions",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Carnegie Endowment for International Peace",
"programAffiliation": "MEP",
"programs": [
"Middle East"
],
"projects": [],
"regions": [
"Middle East"
],
"topics": [
"Economy"
]
}
REQUIRED IMAGE
FOR IMMEDIATE RELEASE: May 7, 2007
- News Release -
A new study by the Carnegie Endowment finds that previous attempts at economic reform have not alleviated the economic problems of Arab countries, failing to dismantle state-dominated economies with high restrictions on private investments. Arab countries represent only 4 percent of world trade and have the highest unemployment rate in the world at 12.2 percent. The per capita GDP in these nations has fallen in recent decades and public debt has hit a critical level in several countries.
In a new Carnegie Paper from Carnegie’s Middle East Center, The Challenge of Economic Reform in the Arab World, Sufyan Alissa examines the major factors responsible for hindering meaningful economic reform in the Arab world. Governments and established elites have little incentive to create reforms that could threaten their economic and political interests. Furthermore, governments and institutions in the Arab world have limited capacity to plan, implement and manage reform programs, and have little agreement on what true reform would entail.
Alissa argues that, in economic terms, there are two types of states in the Middle East and North Africa—those that are highly dependent on oil, and those that depend on foreign aid, international loans, and remittances from expatriate workers. Both have used these highly volatile revenue sources to temporarily alleviate economic pressures, preserve dominant elite privileges, and buy loyalty to the state—all at the cost of sustainable, long-term reform.
In order to achieve genuine reform, governments must move beyond economies dominated by the public sector and support economic models driven by the private sector as the main source of growth and income.
“A consensus is forming among international financial institutions, economics and aid practitioners that lack of progress in improving governance lies at the very heart of most of the challenges currently impeding economic transformation in the Arab world,” says Alissa.
Notes:
###
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
The Plaza Accord was not an externally imposed punishment of Japan but part of a broader restructuring that Japanese economists and policymakers themselves recognized was necessary. Its effects were undermined, however, when Tokyo responded to the resulting slowdown with policies that exacerbated investment, credit expansion, and the very imbalances the adjustment was intended to resolve.
Michael Pettis
The Horn of Africa countries are among those facing a new security calculus.
Andrew Leber, Lesley Anne Warner
A summer of escalation in the Black Sea has hurt Ukraine economically and is exacerbating world food security. A truce is needed—as is a broader reframing of Europe’s Ukraine strategy.
Thomas de Waal
As the U.S. stumbles in its war with Iran, we are likely to see an acceleration of its disengagement from the region.
Michael Young
The Bureau of Industry and Security needs to adjust its focus and practices to maintain its position as the U.S. government’s primary champion of international technological competition.
Geoffrey Irving