middle east and north africa

Question 1

what are examples if natural resource poor and labour abundant countries in MENA?

Answer 1

eygpt, jordan, lebanon, morocco, tunisa

Question 2

what are examples of natural resource rich and labour abundant countries?

Answer 2

algeria, syria, iran and iraq

Question 3

what are examples of natural resource rich and labour scarce countries ( importing labour)

Answer 3

bahrain, kuwait, libya, qatar, saudi arabia, UAE

Question 4

what are the common deniminators of the MENA countries?

Answer 4

1. Political power is highly concentrated
2. Strong coercive security apparatus (army and police)
3. Dominance of Islam
4. Huge demographic youth bulges
5. Large public sectors and small weak private sectors
6. Highly dependent on external revenues from oil(vulnerable to resource curse effects)

Question 5

what is TImur Kuran opinion on the Muslim countries economic performance?

Answer 5

Low generalised trust, which harms economic performance by narrowing the domain of feasible exchanges, is a legacy of the Muslim world’s history

Question 6

what was MENAs Development strategy from 1945-70s?

Answer 6

Heavily interventionist & redistributive approach
Import-substitution industrialisation
Heavily protectionist - lack of trade within MENA State planning
Widespread nationalizationsMassive growth of public sector employmentAgrarian reforms
Increased spending on health and education
Political dictatorship—rentier states

Question 7

what was the state regarded as in MENA countries in 1945-70s?

Answer 7

The state regarded as an instrument of social transformation; political mobilisation, and economic distribution

Question 8

what were the common features of oil arab exporting countries?

Answer 8

low economic diversification and dependence on oil
there is large oil shares of GDP, fiscal revenues, export revenues, foreign exchange

Question 9

what was the early sucess of the the model?

Answer 9

there was a rapid growth in MENA during 1960s with significant gains in several social indicators such as infant mortality, life expectancy, school enrollment, low unemployment, poverty reduction and improvements in HDI

Question 10

what were the emerging problems in the 1980s?

Answer 10

End of the 1970s oil price boom
Governments unable to meet state spending commitments -overblown public sectors
Rapid population and labour supply growth
Reduced demand for migrant labour—lower remittance flows
Reduced ‘competitiveness’ in a rapidly globalising world

Question 11

what were the arab political revolutions mainly fuelled by?

Answer 11

Poverty and inequality - widening income disparities
Unemployment
Lack of opportunities for youth bulge
Stagnating real wages
Lack of “voice” - but now - social media!

Question 12

what type of insititutions do the MENA economies have?

Answer 12

they have extractive political and economic institutions

Question 13

what are the three qualities of the private sector that is needed in the arab world?

Answer 13

1. Can survive without state subsidies and support;
2. Is connected to global markets;
3. Generates productive employment for its young population - -need for labour intensive manufacturing industries

Question 14

what are the factors that have caused a large increase in the labour supply?

Answer 14

Relatively high population growth rates
increasing female labour force participation
Increase in education levels

Question 15

how do you convert natural resources into development?

Answer 15

you start of with natural resource capital then you convert this into financial capital this is then converted into either consumption or public and private investment which both lead to growth and development

Question 16

what are the resource curse mechanisms?

Answer 16

Dutch disease - exchange rate appreciation and de-industrialisation
Political economy mechanisms - civil war and conflict, rent seeking, dictatorship
Terms of trade deterioration - Prebisch & Singer
Neglect of human capital - limited demand for educated labour
Macroeconomic volatility - commodity price volatility

Question 17

how is the money distributed around the MENA economies?

Answer 17

the oil revenues (rent) go to the ruling elite (patron) . this money is then spread to a minority elite (client) and the military and there is limited reciprocity to the oppressed majority which has high unemployment, inequality and poverty

Question 18

how are natural resources a blessing’?

Answer 18

Good inclusive institutions
Sound long term economic strategy
Good economic policies
E.g. Norway, UK, USA, Botswana

Question 19

how are natural resources a curse?

Answer 19

Extractive institutions
Dictatorship
Ethnic diversity
Short termism and poor economic policies
E.g. Nigeria, Congo, Iraq, Libya, Equatorial Guinea

Question 20

what are the politics of MENA?

Answer 20

Most MENA countries have authoritarian political systems
Ruling elites survive by use of patron-client relationships
Selected groups receive benefits from providing political support to the elite (Assad—Alawite minority)
Distortions to the economy used to direct gains to favoured groups
Inequality generates resentment and political instability
Elite have an independent source of revenue - oil
Revenue via taxation requires reciprocity
Result - regimes lack political legitimacy - “rentier state

Question 21

how do arabs elite maintain control?

Answer 21

Arab elites keep order with a combination of stick and carrot
Stick: leviathan state - repressive security apparatus (police and army)
Carrot: redistribution e.g. food subsidies

Question 22

why is there resistance for reform in MENA countries?

Answer 22

In dynamic growing economies there is “creative destruction” (Schumpeter)
Disruptive change undermines the elite and their clients
Necessary economic reforms are blocked or resisted – e.g. Syria 2011
Result - lack of efficiency, dynamism, competition and growth

Question 23

what is the revolutionary potetial in the MENA countries?

Answer 23

These economies contain a large proportion of young unemployed people
Political and economic inequality insignificant
Result - political instability

Question 24

what is the future for the MENA countries?

Answer 24

Need for economic diversification
Supply-side reforms – more competition
Gender equality issues
Need to move from extractive to inclusiveinstitutionsEmployment creation
Huge potential for FDI and tourism