ERF 22nd Annual Conference on:
Towards a New Development Agenda for the Middle East
Prior to the Arab awakening at the end of 2010 and early 2011, the development strategies of Arab countries underwent big swings, from state-led development strategies to market-based recipes for development. These strategies yielded partial benefits, but they failed to convince the majority of the populations that their standards of living had improved. Then came the uprisings, which provided an opportunity for a new political settlement and opened the door for embarking on a new development agenda. The unsettling observation is that five years on, countries in transition are still searching for answers to at least three main questions: What is the best way to navigate the transition in the short run, while maintaining a balance between pressing political demands and scarce financial resources? In the medium to long run, what should the main features of a new development agenda that meets the aspirations of citizens for inclusive and sustainable growth be? And, since some countries in the region are still mired in bloody conflicts, what can be said about development under these conditions and beyond? These questions will be addressed successively in the three plenary sessions of ERF’s 22nd Annual Conference.
Plenary Session 1: Navigating the Transition in the Short Run
The recent Arab uprisings were associated with political instability resulting from the collapse of an old regime and the absence of a new one. In turn, political instability caused economic conditions to deteriorate, while popular demands for privileges by different groups intensified. Navigating the transition, both politically and economically, is thus proving difficult and interim governments in transition countries made different choices to deal with the situation. The speakers in this plenary session will assess the merits of the choices made and their consequences in comparison with other transition experiences.
More concretely, the speakers will address questions such as: Which approach did the transition countries in the region follow, especially with respect to macroeconomic policies? Was the approach expansionary or contractionary? Did they primarily rely on fiscal policy? Was the response adequate or excessive? Moreover, in relation to politics, how did the political landscape constrain policy choices and policymaking? Did economic outcomes impact political developments? How so? More broadly, did governments strike a healthy balance between achieving political and economic objectives or was the focus on political objectives too costly economically?
Plenary Session 2: Navigating the Transition in the Medium to Long Run
In the medium to long term, the storm would typically begin to calm down, both politically and economically. Uncertainty begins to diminish, new political institutions emerge and governments would tend to have a longer time horizon than interim governments. Signs of responses to the demands of the revolutionaries for inclusive economic growth should now also be more apparent. The main question addressed in this plenary session is whether or not transition countries in the region, five years after the uprisings, are indeed showing signs of breaking away with past ineffective policies.
More concretely, the speakers will assess progress in Arab transition countries by dealing with
such questions as: Are governments in the region beginning to adopt policies that promote sustainable economic growth and structural transformation, for example by adopting new industrial policies and aggressively dealing with major price distortions (like energy subsidies)? Are they embarking on different social policies that not only protect the poor but also empower citizens? Are they pursing redistributive policies that are different, in terms of scope as well as instruments and approaches, from those in the past? Are they building a solid coalition for reform? Finally, are they or are they not capitalizing on opportunities offered globally, curbing crony capitalism, and reforming the state to be less corrupt and more effective?
Plenary Session 3: Development under Fire
For a subset of countries in the region, including Syria, Iraq, Libya and Yemen, the ongoing conflicts pose the most difficult challenge for the formulation and implementation of a new development agenda. Lacking an acceptable political settlement, governments are too busy with war to focus on policymaking for development. The key questions in this plenary are: What can be done under these conditions in the short run? And what can be done to prepare the ground for sustainable development in the post-conflict era? In addition, the speakers could address questions such as: What are the root causes of the conflicts? What is likely to happen in the future? And is the economy part of the problem or is it part of the solution?
For over 20 years, ERF has supported sound research in various fields of economics. In more recent years, special attention was given to a few themes, where knowledge gaps about the region were obvious. The main findings of the work on two of these themes (labor and natural resources) is the subject of the two special sessions this year.
Labor Markets in the ERF Region
Issues of employment and unemployment are clearly critical in the ERF region. Yet, not enough analysis was carried out, especially using micro data, to explore how the labor markets in the region function and the root cause of the mismatch between the supply of and demand for labor. Also less understood were issues of migration, informality, gender, and youth employment and the impact of government regulation. Most of these questions have been the subject of intense work by ERF for at least a decade. This session is intended to share the main findings of this accumulated knowledge.
Natural Resources and Diversification in Arab Oil Exporters
The ERF region is distinguished by its abundance of natural resources, especially oil. It was therefore necessary to devote time and resources to better understand issues of macroeconomic management and diversification under these conditions. This special session is held to share some of the key findings on these questions. It will cover issues such as the conditions under which oil abundance can be a curse or a blessing, the link between oil revenues and economic growth, and the potential for economic diversification and the role of industrial policy. In addition to discussing macroeconomic policies, attention will be given to macroeconomic institutions, the influence of politics and economic outcomes.
By Hafez Ghanem, Vice President of the World Bank for the
By Mohsin Khan, nonresident Senior Fellow, Rafik Hariri Center for the
By Jackline Wahba, Professor of Economics at the University of Southampton and
By Richard Freeman, Herbert Ascherman Chair in Economics at
By Khalid Abu-Ismail, Chief of the Economic Development and Poverty
By Hassan Hakimian, Director of the London Middle East Institute