Revisiting Macroeconomic Management in Times of Crisis and Beyond

Date

26/03/2022

Location

Online Webinar

Time

From 4:30 pm To 6:00 pm

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The FEMISE-CMI report explores post-COVID opportunities for fostering growth and for deepening regional cooperation in the Mediterranean region, with a focus on five Southern and Eastern Mediterranean countries (Algeria, Egypt, Jordan, Morocco and Tunisia). In three thematic chapters, the report brings forward the analysis on how to deepen EU-Med integration by prioritizing regional value chains (RVCs), improving food security capacities, strengthening and digitalizing the health sector, and further developing the pharmaceutical sector. The Covid-19 crisis has hit the economies of Mediterranean countries which were already struggling. The report focuses on the challenges essentially linked to the food security and health sectors and the obstacles leading to less than optimal private sector performance. The report also highlights the opportunities that are created within this crisis for deepening regional cooperation by identifying  potential “niches products” for economic integration for the EU-Med Region.

While the COVID crisis presented a challenge to the region, the post-recovery could present an opportunity to reset the priorities and move forward towards a sustainable and inclusive development. There is a common belief that the Mediterranean regional integration must go beyond the development of trade in goods and services, and the technical aspects of trade facilitation.  This session aims to answer the following questions:

1.     Now that we have identified the “niche” of potential integration” vs. a vs. the EU, how can the South Med countries capitalize on these opportunities following the re-designing of the Global Value Chain?

2.     What could be the role of the EU in this context to support the South Med integration? And what impact of the AfCFTA in facilitating  a ‘neighbours of neighbours’ relation?

3.     How to better engage the private sector in the GVC? What policies are needed in this context? How can the sector enhance its innovation /digitalisation capacity to serve the regional needs?

Date

26/03/2022

Location

Online Webinar

Time

From 4:30 pm To 6:00 pm

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How can income poverty be estimated using limited aggregate distributional statistics? How can absolute and relative poverty measurement be reconciled, and harmonized across countries and years? And how should poverty be projected under given forecasts of mean and inequality growth?
The fundamental aim of the panel session is to propose innovative methodologies to settle on meaningful quasi-absolute poverty lines comparable across space and time, and to forecast the impacts of growth and redistribution on household poverty rates. The second aim is to link this work on poverty measurement to wealth inequality in the region and discuss some policy implications.

Date

27/03/2022

Location

Online Webinar

Time

From 5:30 pm To 7:00 pm

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Two mega projects stand out recently, namely: the huge expansion in infrastructure all over Egypt, and the Hayah Kareema initiative. The first project was initiated in 2015 and is estimated to be the biggest in Africa, the latter started in 2021. The session aims to assess the two projects from an economic development perspective.

The presentation by ECES and discussions with panelists will attempt to answer the following key questions among others: 

1. To what extent does the priority agenda of both projects meet the development needs of the country?
2. What are the sources of finance for each project and to what extent it affects the debt situation?
3. What is the reaction of the private sector to expansion in infrastructure? To what extent it represents an incentive for investment
4. What is the level of involvement of civil society in the planning and implementation of Hayah Kareema?
5. What is the system for monitoring and evaluation of the impacts of each of the two projects?
6.  What is the needed policy infrastructure to complement the physical infrastructure in Hayah Kareema?

Date

28/03/2022

Location

Online Webinar

Time

From 3:00 pm To 4:30 pm

The Coronavirus pandemic is now widely acknowledged to have created the most devastating economic crisis since the 1930s great depression. For the oil-dependent MENA economies, already reeling from regional conflicts and that instability, the consequences have been particularly dire. One the one hand, the resource-rich economies saw their public finances come under stress due to a secular decline in oil prices since 2014, prompting a serious re-think about their future fiscal sustainability and growth. One the other hand, oil-importing economies had to adopt expansionary fiscal policies to contain the negative economic impact of the pandemic, further aggravating an already limited fiscal space and looming debt crisis. Indeed, while the rise in debt is a global phenomenon, it is particularly challenging for MENA in view of serious economic development and governance failure.  First, the region has so far failed to achieve meaningful economic diversification for creating jobs, beyond the informal and low productivity sector.  Second, fiscal discipline is weak and often coupled with problematic governance of debt management. Third, in many cases, the accumulation of debt is often not solely driven by the increase in fiscal deficits, suggesting that below-the-line operations may often contribute to debt increases.

Subscribing to the above discussion, the first plenary session will identify the main tenets of the emerging macroeconomic framework for dealing with the new emerging challenges facing macroeconomic and development policy. Among other questions, the following five should merit particular consideration:

1. What are the short-term and long-term effects of the surge in debt and the developments in oil prices?
2. What kind of domestic reforms and global initiatives are needed to help MENA and other developing countries manage the emerging debt crisis and achieve debt sustainability, especially in view of the politics and political economy challenges associated with high social mobilization in several countries in the region?
3. How might MENA and other developing countries enhance resource mobilization capacity, including through mainstreaming digital transformation in the tax systems?
4. With the cyclical and secular downward pressure on oil prices, how resource-rich countries can manage their public finances in the times of crisis, including through drawing down from SWFs?
5. In view of the likely need for a non-fiscal shock absorber, should countries currently pursuing heavily managed and pegged exchange rates consider more flex regimes?

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Date

28/03/2022

Location

Online Webinar

Time

From 5:30 pm To 7:00 pm

From a social perspective, while monetary and fiscal policies managed to relatively stabilize MENA economies, they failed to address structural and social issues. Indeed, there is now widespread recognition of the need to integrate macroeconomic management and social policies. While with limited success, macroeconomic management in MENA has focused on price stability and enhancing the role of the private sector as key drivers for economic growth, social policies were not sufficiently mainstreamed in the design of macroeconomic policies. Indeed, social policies were always “added-on” without being fully integrated in macroeconomic policies. Thus, thinking beyond the current crisis, it is pertinent to rethink the role of the state as provider of universal social protection in a world economy increasingly vulnerable to pandemics and other shocks. 

Among other issues, this session will ask the following questions:

1. What is the role of the State in making social policies more inclusive and more sustainable? How macroeconomic policies can be equitable without being less efficient?
2. Is universal social protection feasible in light of the limited fiscal space of MENA economies?
3. How to align the political economy challenge for tax reform and enhancing the resource mobilization capacity of states in MENA and other developing countries?
4. How social policies can be mainstreamed in macroeconomic management?

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Date

29/03/2022

Location

Online Webinar

Time

From 3:00 am To 4:30 am

While it is indispensable to address the negative effects of the crisis in the short term, longer term structural transformation strategies are needed in view of the major developments associated with the digital revolution and decarbonization. First, at the climate change level, with the low-carbon technology diffusion, the advancement in renewable energy and the unprecedented mushrooming of environmental agreements, the demand for fossil fuel is destined to decline, leading to an eventual “stranded assets” problem for MENA. A stranded asset can be defined as a resource that once had value or produced income but no longer does, usually due to some kind of external change, including changes in technology, markets and societal preferences. This is why, currently, the term “stranded assets” is most commonly used to describe oil and gas resources that have not yet been extracted, but which appear as assets on companies’ ledgers and a few countries’ balance sheets. Therefore, MENA economies need to undergo major restructuring and diversification away from their heavy direct and indirect dependence on fossil resources as the prime engine of growth. Second, with the new industrial revolution and the digital transformation the world is experiencing, a new development model should be adopted by MENA countries to better integrate into the global economy and to make their economies more competitive and more agile.

Against this backdrop, among other issues, this second plenary will consider the following three questions:

1. Beyond the crisis, what are the deep reforms that are needed to improve the structure and the resilience of MENA economies
2. What are the alternative development models for MENA economies to boost their industrialization and structural transformation
3. How digital transformation and climate change can be mainstreamed in the design of a new macroeconomic model for developing countries? 

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Date

29/03/2022

Location

Online Webinar

Time

From 5:30 pm To 7:00 pm

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While the first plenary focuses the macroeconomics of social protection, it is crucial to examine their micro-foundations for two reasons. First, beneficiaries from social policies cannot be treated as a homogenous group given that there are stark differences between males and females, formal and informal workers, nationals and refugees, etc. Thus, this special plenary analyses the following questions:

1.     How can MENA economies handle social protection to reach workers in the informal economy?

2.     How the delivery of social protection can be improved for all beneficiaries?

3.     How States can adopt a more holistic approach in social protection in terms of removing financial barriers to quality health care, enhancing income security, and protecting incomes and jobs?

Date

30/03/2022

Location

Online Webinar

Time

From 3:00 pm To 4:30 pm

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Macroeconomic policy challenges have been exacerbated by the digital finance revolution given that financial markets have been significantly affected by digitalization and technological change. Moreover, digital currencies, largely disconnected from the fundamentals and whether issued by central banks or elsewhere, are rapidly evolving and attracting numerous investors the fundamentals. Thus, with all the advantages and risks associated to these new products, central banks will have to adapt and cope in the middle of the new wave.

This session will attempt to answer the following questions:

1. What are the local and global implications of digitalization on financial markets and monetary policy in the MENA region?
2. How Central Banks and Sovereign Wealth Funds can adapt and benefit from these trends?
3. To what extent these new trends can promote (thanks to newer financial products) or discourage (because of more uncertainty) trade flows?

Date

30/03/2022

Location

Online Webinar

Time

From 5:30 pm To 7:00 pm

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As we have seen in previous panels, the current socio-economic situation is dire in most of the region. Everywhere, policy-makers face the triple challenges of macro-instability, low growth and job creation, and high levels of popular contestation. The triple challenge has been described as a trilemma between social stabilisation, financial adjustment, and structural reform. Action on any one front makes actions on the others more complicated.

The temptation for policy-makers in the face of a gridlock of difficulties is to lower expectations and get used to a “low equilibrium”, below society’s potential. In contrast, the alternative is to abandon a business-as-usual approach, and to let the crisis becomes a wake-up call and a harbinger of innovation.

The proverb – necessity is the mother of invention – appears already in Plato’s Republic. In the face of a stark situation, innovation becomes the only way out.

The policy question, in the face of the trilemma, thus becomes: How to create hope for a better future, that can sustain trust, and fuel the type of social cooperation that can generated long term progress.

The goal of the session is to examine initiatives from around the region that innovate in the face of adversity, and that have started to create hope that progress is possible. Policy innovation involves financial, social, and possibly political costs, in pursuit of gains that can start small but could become game changers over time.