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Comparative Regional Economy <Lecture Note 4> 13.10.31
Comparative Regional Economy: Central
Asia, Middle East and North Africa
* Some parts of this note are borrowed from the references for teaching purpose only.
Semester: Fall 2013
Time: Thursday 9:00-12:00 am
Classroom: 114
Professor: Yoo Soo Hong
Office Hour: By appointment
Mobile: 010-4001-8060
E-mail: [email protected]
1
Location of CS, ME and NAf
2
Central Asia
3
Geography, History and Culture
4
CA: Introduction
- Central Asia is a large, compact, landlocked region within the Eurasian
landmass.
- Until 1991, other than the Soviet Union, the region contained only two
countries, Mongolia and Afghanistan.
- Soviet Union’s breakup added several more independent countries to the
region.
- Historically, Central Asia has been weakly integrated into international trade
networks.
5
 Twelve countries in this region have populations of 10 million people or more.
– Iran, Turkey, and Egypt have more than 60 million;
– Iraq, Afghanistan, Uzbekistan, Morocco, Saudi Arabia and Algeria have
populations that range between 24 million and 32 million.
– These countries have populations that range between 10 million and 20
million: Syria, Yemen, Kazakhstan, and Saudi Arabia.
– Western Sahara, Qatar and Bahrain are the smallest countries in population
with 0.3 million, 0.6 million and 0.7 million people, respectively.
6
Central Asia
•
•
•
•
•
•
•
•
Armenia
Georgia
Azerbaijan
Kazakhstan
Kyrgystan
Tajikistan
Turkmenistan
Uzbekistan
7
2
Physical Characteristics
8
1
Georgia, Azerbaijan and Armenia (Caucasus)
9
Population Density in Central Asia
10
Linguistic Geography of Central Asia
11
Central and West Asia and North Africa:
Major Features
- Dry climates and the Muslim faith dominate in this region.
- More than sixty percent of the world's oil reserves are found here.
- The Fertile Crescent was one the major domestication hearths extending
from the Levant to the Persian Gulf. Crops originating here include figs,
grapes, dates, and olives.
- Home to three of the world's major religions: Judaism, Christianity, and Islam.
- Water is the most important resource in the area and population is
concentrated where water is found. Water is not only the basis for life, but for
the social organization of the village.
-
The Middle East is one of the world's shatterbelts and a focal point of conflict.
12
Islam in Central Asia
• Pashtuns adopt a stricter interpretation of Islam
• Kazaks are more lax in their interpretation of Islam
• Most of the region’s Muslims are Sunni
• Shiism dominant among the Hazaras and the Azeris
• Communists in China, Soviet Union and Mongolia discouraged all religions
(including Islam)
• Islamic revival underway as people return to their cultural roots (former
Soviet republics)
• Islamic fundamentalism is a powerful movement in Afghanistan, parts of
Tajikistan, and the Fergana Valley-Taliban in Afghanistan (=Extreme
fundamentalist Islamic organization)
13
Economic Growth and Status
14
Different Central Asian Economies
 Divergent Paths
- Despite strong similarities in culture, history and economic structure, their
transitions from Soviet central planning ranged from the most rapidly liberalizing
(the Kyrgyz Republic) to the most non-reforming (Turkmenistan) of all former
Soviet republics.
- By the turn of the century, when the transition from central planning was
essentially completed, the Central Asian countries had created vastly different
economic systems. These differences had important implications for economic
stability during the 1990s, for long-term growth prospects in the 2000s, and for
the impact of the global economic crisis that gathered pace in 2008-9.
- The Central Asian countries are open economies in the sense that
international trade is important, but they have all been suspicious of
integration into the global economy and have embraced globalization to
varying degrees.
15
Integrating Central Asia into the World Economy
-
China and India next to other Asian Pacific players will draw
Central Eurasia into closer economic orbit diversifying oil
and gas markets.
-
If this accords with internationally accepted governance norms and
economic disciplines this trend will impose new rigor and business models
on existing investment and trade patters.
-
Market rigidities characterize investment and trade patterns in today’s
Eurasian gas scene; fragility and fragmentation despite plentiful economic
opportunities that are yet to be unlocked…
- Asian Pacific interests in Central Eurasia may prompt further Euro Atlantic
investment to integrate Central Asian trade and investment flows globally
with the Euro Atlantic as well as the Asian Pacific; the two global energy
consumption growth poles.
16
Source: OECD/IEA,(2007)
Caucasus and Central Asia
17
Caucasus and Central Asia
Oil and gas exporters
Oil and gas importers
Kazakhstan
Southwestern Asia
Uzbekistan
Georgia
Kyrgyz
Republic
Azerbaijan
Armenia
Turkmenistan
Tajikistan
18
Eurasia: Growth in real GDP 1999-2008
Central Asia
South Caucasus &
Ukraine
1999
Armenia
2000
2001
2002
2003
2004
2005
2006
2007
2008
Estimate
Projection
3.3
5.9
9.6
13.2
13.9
10.1
14.0
13.4
13.7
10.0
11.0
11.1
9.9
10.6
11.2
10.2
24.3
30.5
23.4
20.0
Georgia
3.0
1.9
4.7
5.5
11.1
5.9
9.6
9.4
12.0
8.0
Ukraine
-0.2
5.9
9.2
5.2
9.6
12.1
2.7
7.3
7.6
5.5
Kazakhstan
2.7
9.8
13.5
9.8
9.3
9.6
9.7
10.6
8.5
5.1
Kyrgyz
Republic
3.7
5.4
5.3
0.0
7.0
7.0
-0.2
3.1
8.2
6.8
Mongolia
3.2
1.1
1.0
4.0
5.9
10.1
7.3
8.6
9.9
8.6
Tajikistan
3.7
8.3
10.2
9.1
10.2
10.6
6.7
7.0
7.8
4.1
16.5
18.6
20.4
15.8
17.1
17.2
9.6
9.0
11.5
12.0
4.3
3.8
4.1
4.0
4.2
7.7
7.0
7.3
9.5
7.5
Azerbaijan
Turkmenistan
Uzbekistan
19
Annual GDP Growth Rates (%)
20002010 2011 2012 2013 2014
09
Afghanistan
..
8.4
7.0 11.8
3.1
4.9
Azerbaijan
14.4
5.0
0.1
2.2
4.8
4.8
Kazakhstan
7.5
7.3
7.5
5.0
5.0
5.3
Kyrgyz Republic
4.2 -0.5
5.7 -0.9
7.4
7.5
Tajikistan
7.7
6.5
7.4
7.5
7.0
6.0
Uzbekistan
6.1
8.5
8.3
8.2
7.4
7.1
China
Russia
Turkey
9.4
4.4
3.0
10.4
4.3
9.2
Source: Global Economic Outlook 2013
9.3
4.3
8.8
7.8
3.4
2.2
7.7
2.3
3.6
8.0
3.5
4.5
2015
6.3
2.9
5.5
5.3
6.0
6.7
7.9
3.9
4.7
20
Savings (% of GNI, 2007)
Country
Gross
savings
Consumption
of fixed
capital
Net National
Savings
Azerbaijan
49
10
38
Kazakhstan
32
15
17
Kyrgyz
Republic
12
10
2
Tajikistan
4
7
-3
Ukraine
26
12
14
Uzbekistan
40
8
33
Source: The world Bank (Data& Statistics)
21
The Global Recession’s Impact on CA
-
Kazakhstan, the country most integrated into the global economy and
potentially most harmed by the global crisis, is the country best-prepared
for negative financial and trade effects.
-
Uzbekistan and Turkmenistan have foregone economic benefits from global
integration, but by the same token are relatively insulated from external
shocks other than commodity prices.
-
The Kyrgyz Republic is in an intermediate position, but its major export
commodity, gold, often does well during recessions and 2008-9 has been
no exception.
-
A more significant transmission for the poorer countries is migration, and
the direst negative impact is through the reduced flow of remittances to
Tajikistan, the poorest country in the region.
22
Per-capita Disposable Income to Recover by 2011
...except in
Armenia,
Georgia, and
the Kyrgyz
Republic
Sources: IMF, World Economic Outlook; and IMF staff calculations.
23
Speed Recovery
Real GDP Growth (percent change from a year earlier)
24
Wages and Labour Productivity in Eastern Europe and
Central Asia, 2008–11 (%)
25
High and Rising NPLs in Some Countries
Nonperforming loans
(Overdue by 90 days or more, unless otherwise noted; percent of total loans)
Source: National authorities.¹Overdue by 60 days or more.²Overdue from 1 day to 270 days.
³Overdue by 30 days or more.
26
Back of High Oil Prices and Recovery
27
Fluctuations in Oil Sector GDP vs.
Stable Non-Oil Sector
28
Challenges Beyond the Crisis
-
Growth, development, and poverty reduction
-
Fiscal and external sustainability
-
Financial deepening and strengthening monetary policy instruments
29
International Competitiveness,
Trade and FDI
30
Globalization and Central Asia
 Open but not integrated Economy
-
Kazakhstan as the richest and most developed economy in the region has the most
complex relations to globalization, but even there suspicion of losing autonomy (reflected in
the slow progress of WTO accession negotiations) has limited the degree of globalization
of the Kazakhstani economy.
-
The main channels of globalization, and hence for contagion from the global economic
crisis, run through (1) the financial sector, (2) trade, and (3) migration and remittances. The
last is important because hundreds of thousands of workers from Tajikistan and to a lesser
extent the Kyrgyz and Uzbekistan are working abroad and their prospects will be directly
influenced by economic conditions in Russia and elsewhere.

Trade and Openness
-
The Central Asian countries have high export/GDP ratios except for Tajikistan whose ratio
would be much higher if exports of labor services were included Despite efforts to diversify
their economies by using revenues from energy, mineral or cotton exports or through
import-substituting policies or other measures, the Central Asian countries’ exports
remain heavily concentrated in a small number of commodities.
31
Openness and Major Exports
Exports/ GDP(%)
Major Exports
2006
2007
Kazakhstan
51
49
Oil, minerals, iron and steel, grain
Kyrgyz Rep
42
45
Gold, cotton
Tajikistan
23
21
Aluminum, cotton
Turkmenistan
72
63
Gas, cotton
Uzbekistan
38
40
Cotton, gold, gas
Source: World Bank World Development Indicators
32
Belarus-Kazakhstan-Russia Customs Union
Russia
Belarus
Kazakhstan
Kazakhstan
Georgia
Armenia
Azerbaijan
Turkmenistan
Uzbekistan
Tajikistan
Kyrgyz
Republic
33
Eurasia: Three Trading Blocs
34
Business Environment in Eurasia
 Strong economic performance in both Central Asia and South Caucasus/
Ukraine regions
 Wide economic growth disparities and fluctuations across countries
 FDI levels and growth still relatively low
- Average FDI per capita up to 6 times lower than South East Europe or CEE
- Average FDI growth a third lower than regions like South East Europe
- Limited FDI diversification in most countries
 Need to improve business climate to attract investment and develop the private
sector further
35
Competitiveness
Competitive Assets
Barriers to FDI
Endowment in natural resources
Low cost and productive labor force
Process of internal and external liberalizat
ion, particularly under the European
Neighborhood Policy
Macroeconomic stabilization, high growth
rates and good prospects for the long ter
m
sustainable growth
FDI in energy infrastructure as a catalyst f
or
FDI in related sectors
High perception of risk for business
transactions
Administrative barriers to foreign direct
investment
Relatively weak institutional development,
slow pace of economic, legal and institutio
nal reforms (implementation gap)
Underdeveloped physical infrastructure
Weak regional cooperation, including limi
ted intra-regional trade
36
FDI (US$ million)
South Caucasus &
Ukraine
1999
2001
2002
2003
2004
2005
2006
2007
2008
Estimate
Projection
Armenia
122
104
70
111
121
217
252
340
455
482
Azerbaijan
510
149
299
1,048
2,353
2,351
458
-1,301
-5,201
-1,997
Georgia
62
153
80
122
335
420
529
1,115
1,585
1,400
Ukraine
489
594
769
698
1,411
1,711
7,533
5,737
9,218
8,000
1,468
1,278
2,861
2,164
2,213
5,436
2,123
6,630
5,100
4,680
Kyrgyz Republic
38
-7
-1
5
46
132
43
182
224
167
Mongolia
34
40
43
78
132
129
258
290
324
688
Tajikistan
21
24
10
36
32
272
55
66
70
80
Turkmenistan
125
131
170
276
226
354
418
731
804
820
Uzbekistan
121
75
83
65
70
187
88
195
262
311
Kazakhstan
Central Asia
2000
Source: EBRD Transition report 2007
- FDI increased 4 times for CA and time for SCU
- Average annual growth rate of 20% since 1999 (23% for SCU, 18% for CA)
37
Socio-Economic Development
38
Social Development in Central Asia
 Social Conditions and the Status of Women in Afghanistan
• Average life expectancy is 45
• High infant and child mortality rates
• High illiteracy (only 15% of women can read)
• Women in traditional Afghani society (especially Pashtun) lead
constrained lives
– Fall of the Taliban improved their situation
– Many are nervous about their new government’s willingness and
ability to uphold their rights
39
– Social Conditions in the Former Soviet Republics
• More autonomy among women of the northern pastoral peoples
• In former Soviet republics, women have educational rates
comparable to men
• Tajikistan has been relatively socially successful
– Social Conditions in Western China
• The conditions in this region of China tend to be worse off socially
as compared to China as a whole
– Around 60% of the non-Han people of Xinjiang are illiterate
40
Growing inequality
•
•
•
Income inequality (Gini index) increased
from 33.5 in the 1990s to 37.5 in the latest
available year
Inequality-adjusted ‘real’ GDP per capita
falls
Sri Lanka: GDP per capita $4,555 to
‘real’ GDP per capita $2,323 (in 2005
PPP)
Republic of Korea: GDP per capita
$27,415 to ‘real’ GDP per capita
$19,492.
Inequality reduces social development gains
by over 20%
Pakistan: Gains reduced by over 30%
Russian Federation: Gains reduced by
over 10%
Inequality-adjusted social
development index
Inequality-adjusted GDP per
capita
Singapore
Korea Rep
Korea Rep
Russian
Fed
Malaysia
Georgia
Armenia
Kazakhstan
Kazakhstan
Russian
Fed
Sri Lanka
Iran Is Rep
Mongolia
Azerbaijan
Uzbekistan
Thailand
Kyrgyzstan
Maldives
Azerbaijan
Armenia
Tajikistan
Sri Lanka
Philippines
Georgia
China
Fiji
Thailand
Bhutan
Maldives
China
Mongolia
GDP per capita
Indonesia
Gini-adj
Philippines
Viet Nam
Turkey
Turkey
0
20000 40000 60000
SDI
Gini-adj
0.0
0.5
41
1.0
Gross Average Monthly Wages (US$)
Source: UNECE statistical data (http://w3.unece.org/pxweb/)
42
Geopolitics and Security
43
Geopolitical Framework: Political Reawakening
 Partitioning of the Steppes
-
Before 1500, Central Asia was a power center
-
Mobile (horseback) armies threatened sedentary states
-
Gunpowder and effective hand weapons changed the balance of power
-
Russia and China gained control of the region
Manchu (Chinese) conquest 1644
Russian Empire in the 1700s
Concern over British influence in the area
44
Development in Central Asia
- Central Asia was dominated for many years by Russia and China.
- This region is now emerging as a separate entity.
- It has a rugged terrain, and was historically pastoral
- Today, presence of fossil fuels is generating interest, but
construction of pipelines is needed.
- Collapse of political and economic systems in early 1990s
- Warfare, armed conflict have damaged economies and
infrastructure.
- Afghanistan is especially troubled, and emerged as a focus of
world interest in September 2001.
45
Central Asia Under Communist Rule
 Soviet Central Asia
- Soviets inherited Russian Empire’s domain
United territories together into Soviet Union
Created a series of “union republics” (Kazakhstan, Uzbekistan,
Turkmenistan, Kyrgyzstan, Tajikistan, Azerbaijan) Sowed the seeds of
nationalism, nation-states
 The Chinese Geopolitical Order
- After China reemerged as a unified country in 1949, it reclaimed most
of its old Central Asian territories Movement into Xinjiang and Tibet
 Current Geopolitical Tension
- Strife in Western China Repression of Tibet, and local opposition to
Chinese rule
Border of China and India still contested Chinese control of Xinjiang
Uygur opposition War in Afghanistan before September 11, 2001
46
 1978: Soviet-supported military “revolutionary council” seized power
- Marxist government began to suppress religion
- Russian invasion U.S. and Saudi support rebels Soviets withdrew in
1989
 War in Afghanistan before September 11, 2002
- 1995–1996 rise of the Taliban
- Taliban founded by young Muslim religious students
- Closely associated with the Pashtun ethnic group
 Imposed an extreme interpretation of Islamic law consistent with Pashtun
culture
- Other Afghan ethnic groups opposed the Taliban
- The Roles of Russia, Iran, Pakistan, and Turkey
- Russia has armed forces in Tajikistan, and transportation routes cross
Kazakhstan
- Iran is a major trading partner, and offers access to ports
- Pakistan supported Taliban; now supports the U.S.
- Turkey has close cultural and linguistic connections
47
International Dimensions of Central Asian Tension
 Islamic Fundamentalism?
- Many other Central Asian Nations were concerned that Islamic fundamentalism
could affect their nations.
- Islamic movement rose in Uzbekistan (IMU)
- After September 11th balance of power shifted
- U.S. with British assistance launched a war against al-Qaeda and the Taliban
government.
- Bombing campaign and support of Northern Alliance
- Defeated the Taliban and began a process of forming a new Afghan governmen.t
- Fighting continues, and U.S. forces remain in Afghanistan.
48
US Interest in Central Asia
 Collapse of the Soviet Union to 9/11
-
Revolved around the three broad themes of political and economic
reform, security, and energy
-
Securing and dismantling nuclear stockpiles was the most pressing security
concern
-
Promotion of democracy
 Post 9/11
-
Stopping the threat of terrorism became the top priority for the US in
Central Asia, and US secured bases in Central Asia to prepare for military
actions against Afghanistan
-
US seeks to allow Central Asia to sell its energy at global market price, to
help the region maintain its independence and to prevent Russia from
establishing economic hegemony over Central Asia
49
-
The period between September 11, 2001 and summer of 2003 marked the
high point of US influence in Central Asia.
-
US influence began to decline in 2005 following the ejection of US forces
from air base in Uzbekistan following US criticism of Uzbek authorities’
handling of the events in Andijon
-
US emphasis on democratization and its explicit links between political
reform and economic aid have alienated many Central Asian leaders
-
Anti-American sentiment rose after American-led invasion of Iraq, perceived
as American campaign against Islam
50
Relationship between China, Russia, and Central Asia
 Important trade partners
-
Russia remains Central Asia’s leading trade partner. Trade between China and
Central Asia increased 10 times from $500 million in 1992 to $5 billion in 2004 (12
years)
-
Russia secured two agreements for natural gas pipeline in 2007 with three countries,
doubling its imports of gas from Central Asia
 Strategic Partners
-
Shanghai Cooperation Organization (SCO), mutual-security organization founded i
n 2001 by the leaders of 6 countries: China, Russia, Kazakhstan, Kyrgyzstan, Tajikist
an, and Uzbekistan
-
Russia’s energy agreement provide it with increased leverage over Central Asia, as
well as Europe.
51
Caspian and Central Asian Oil Fast Forward
On Its Own Momentum
- East meets West in Kazakhstan
- New western outlets in place new outlets reach towards China
- Rising Central Asian oil production calls for more
52
Source: OECD/IEA (2007)
Central Asian Geopolitics
53
Implications and Prospects
54
Abundant Resources
 The Post-Communist Economies
- Many Central Asian industries relied heavily on subsidies and oil from
the Soviet Union.
- Today, no Central Asian country could be considered prosperous.
- Kazakhstan is most developed.
- Uzbekistan has second-largest economy.
- Kyrgyzstan is aggressively privatizing former state-run industries.
- Turkmenistan has a large agricultural base.
- Tajikistan most troubled of former Soviet republics
55
 The Post-Communist Economies (cont.)
– The Economy of Tibet and Xinjiang in Western China
– Chinese portions of Central Asia have fared better than the rest of the
region.
– Tibet is one of the world’s poorest places.
– Tibetans provide for most of their basic needs.
– Xinjiang has large mineral wealth and oil reserves and productive
agriculture sector as well.
– Economic misery in Afghanistan: It is the poorest country in the region
with almost no economic development.
– Afghanistan suffered nearly continuous war starting in late 1970s.
– By 1999, it was the world’s largest producer of opium.
56
 Central Asian Economies in Global Context
- Overall, Central Asia is not well connected.
- Afghanistan is tied to the global economy through its export of
illegal drugs.
- In former Soviet areas, most of the connections remain with
Russia.
- Former Soviet republics are developing ties with Iran, Pakistan,
Turkey, and China.
- U.S. and other Western countries are drawn to the region by oil
and natural gas deposits, but construction of pipelines is
necessary.
57
CA Economic Outlook
 The region is being hit by external shocks.
- Contraction in world economy, esp. Russia
- Declining commodity prices
- Drying-up of capital inflows
 Current account positions have weakened.
 Fiscal balances are worsening, and public debt is rising.
 Growth will drop sharply in 2009 and recover gradually in 2010.
 Inflation is falling.
58
Capital Inflows
Net Private Capital Flows (In percent of GDP)
30
20
2007
2008
2009 (proj.)
10
0
-10
-20
AZE
UZB
TJK
ARM
TKM
KGZ
KAZ
GEO
59
Current Account Positions
Current Account Balance
(In percent of GDP)
Gross International Reserves
16
1/
20
In months of next year's imports (March 2009)
CCA
Oil & gas exporters
Oil & gas importers
15
Change (in percent, June 2008 - March 2009)
10
8
5
0
0
-5
-10
-8
-15
-20
-16
-25
2004
2005
2006
2007
2008
2009
GEO
ARM
KGZ
KAZ
TJK
UZB
AZE
TKM
1/ March 2009 data includes SBA purchases of $249 million (Armenia) and
$250 million (Georgia).
60
Growth in the Region
Real GDP Growth (In percent)
16
14
12
10
8
6
4
2
CCA
Oil & gas exporters
Oil & gas importers
0
-2
2000
2002
2004
2006
2008
2010
61
Caspian Oil Production Growth and Diversity
kb/d
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
4000
3500
3000
2500
2000
1500
1000
500
0
AZERBAIJAN
KAZAKHSTAN
TURKMENIST
- Caspian provides bullish growth, Complements stable MENA and
Russian volume with incremental volume and added diversity
Source: OECD/IEA,(2007)
62
Middle East or
MENA
63
Geography, History and Culture
64
ME and NA Region
65
Middle East
Turkey
Lebanon
Israel
Iraq
Syria
Jordan
66
Map of Middle East and North Africa (MENA)
Reprinted From: Akhtar, S., et al. 2013. p.2.
68
History
•
•
•
•
•
•
In the last 100 years most of the Saudi
Arabian Peninsula and North Africa
struggled for independence from Great
Britain, France, or Italy
1945- After WWII Arabic speaking
countries decided to unite
• Formed the Arab League, an
organization of Arabic
speaking nations with
common interests
• Passes political and economic
resolutions
• Has little real power because
has no military
Many Islamic countries feel ignored or
betrayed by English speaking countries
Broken promises to help them with
financing new governments
Our Allies – Egypt, Jordan, Syria*,
Algeria, Tunisia, Pakistan, Iraq, Oman,
United Arab Emirates, Kuwait, Qatar
Non-allies – Iran, Afghanistan, Sudan,
Lebanon, Yemen
69
Ethnic Groups in the Middle East
•
Arabs are people who speak Arabic.
•
They believe themselves to be descendants of Abraham in the Bible
through his son, Ishmael.
•
They are the most numerous group in SW Asia.
•
Most are Sunni Muslim, some are Shi’a, and a few are Christians or
other religions.
70
•
Kurds are people who speak Kurdish.
•
They live or are from mountainous areas in Turkey, Iraq, and Iran.
•
They hope to have their own country one day.
•
Iraqis and Persians have conflicts with them.
•
They may be any religion, though most are Sunni Muslim.
71
•
Persians are people who speak Persian (Farsi).
•
They live or are from Iran (used to be called Persia).
•
Their ancestors come from Central Europe and Southern Russia.
•
They may be any religion, but most are Shi’a Muslim.
72
Religious Groups in the Middle East
73
Cultures in the Middle East
74
Economic Growth and Status
75
Arab World Economies by Stage of Development
76
Middle East and North Africa
- The Middle East and Africa forms a huge economic zone with a total
population of some1.1billion people (2005).
- When the global economy was hit by an upsurge in resource prices,
Middle East and African countries have attracted attention from around
the world for their rich reserves of crude oil, rare metal and other natural
resources.
- The income level in the region as measured by per-capita nominal GDP
widely varies from country to country.
- The population growth rate is high across the region, with most countries
continuing to post annual growth around 2%.
- The employment situation in the region is severe, and the
unemployment rate is far above 10% in most African countries and in
some oil-producing Middle East countries.
77
GDP Growth
78
Population Size 2005 and 2050
Pakistan
Egypt
2050
Iran
2005
Sudan
Algeria
Morocco
Afghanistan
Iraq
Saudi Arabia
Yemen
0
50
100
150
200
250
300
350
Millions
Source: United Nations 2005
79
Share of Proven Oil and Natural Gas Reserves
by Region
Source: BP Statistical Review of World Energy (BP)
80
Reserves and Growth
Economic Growth and Status
81
Gulf Economies in the Global Competitiveness
Ranking
Source: Arab World Competitiveness Report 2011-2012
82
Levantine Economies in the Global Competitiveness
Ranking
Source: Arab World Competitiveness Report 2011-2012
83
A Diverse Region: Three Major Country Groupings
- Resource-poor, labor-abundant (RPLA) or emerging economies: Egypt,
Jordan, Lebanon, Morocco, Tunisia, West Bank and Gaza Population: 124
Mill. GDP: $US 225 billions
- Resource-rich, labor-abundant (RRLA) or transition economies: Algeria,
Iran, Iraq, Syria, Yemen
Population: 168 Mill. GDP: $US 400 billions
- Resource-rich, labor-importing (RRLI) or rich economies: GCC (Bahrain,
Kuwait, Oman, Qatar, Saudi Arabia, UAE) +Libya
Population: 40 Mill.
GDP: $US 666 billions
84
GDP per capita ($2005 Value)
GDP/Cap $ US PPP
RRLA
GDP/Cap. $US
RRLA
0
5000
10000
15000
20000
25000
85
GDP per capita ($PPP2005 Value)
RPLA
Max
RRLA
Average
Min
RRLI
0
20000
40000
60000
80000
86
Dramatic Poverty Reduction and Low Absolute Poverty
% of Poeple living below $1.25 a day
% of People Living Below $2 a day
70
60
60
50
50
40
40
30
30
20
20
10
10
0
0
1981 1984 1987 1990 1993 1996 1999 2002 2005
MENA region
All regions
1981 1984 1987 1990 1993 1996 1999 2002 2005
MENA region
All regions
87
Varied Across Sub-regions and Countries
GDP per capita growth in the MENA region
6
4
2
1970s
1980s
0
RRLI
-2
RRLA
RPLA
1990s
2000s
-4
-6
88
ME Countries’ Economic Indicators
%
Real GDP Growth Rate
Consumer Price
Current Account/GDP
2007
2008
2009e
2010f
2007
2008
2009e
2010f
2007
2008
2009e
2010f
Middle east
6.2
5.4
2.0
4.2
11.2
15.0
8.3
6.6
18.1
18.3
2.6
7.9
Oil
producing
6.0
4.9
1.3
4.2
11.8
15.8
7.0
6.3
21.5
21.8
4.0
10.4
Iran
7.8
2.5
1.5
2.2
18.4
25.4
12.0
10.0
11.9
6.7
3.0
3.6
Saudi
Arabia
3.3
4.4
-0.9
4.0
4.1
9.9
4.5
4.0
24.3
28.6
4.1
11.4
UAE
6.3
7.4
-0.2
2.4
11.1
12.3
2.5
3.3
16.1
15.7
-1.6
5.2
Kuwait
2.5
6.3
-1.5
3.3
5.5
10.5
4.6
4.4
44.7
44.7
29.4
35.3
Non oil
producing
6.8
7.0
4.5
4.4
9.1
12.3
13.0
7.5
-1.6
-2.7
-4.1
-4.4
Egypt
7.1
7.2
4.7
4.5
11.0
11.7
16.2
8.5
1.9
0.5
-2.4
-2.8
Syria
4.2
5.2
3.0
4.2
4.7
15.2
7.5
6.0
-3.3
-4.0
-3.2
-4.3
Jordan
8.9
7.9
3.0
4.0
5.4
14.9
0.2
4.0
-17.2
-11.3
-10.0
-8.8
Lebanon
7.5
8.5
7.0
4.0
4.1
10.8
2.5
3.5
-6.8
-11.6
-11.3
-10.5
Israel
5.2
4.0
-0.1
2.4
0.5
4.6
3.6
2.0
2.8
1.0
3.2
2.4
Note: e means estimation, f means forecast
Source: IMF.
89
SSA Countries’ Economic Indicators
%
Real GDP Growth Rate
Consumer Price
Current Account/GDP
2007
2008
2009e
2010f
2007
2008
2009e
2010f
2007
2008
2009e
2010f
Sub Sahara
7.0
5.5
1.3
4.1
6.8
11.9
10.5
7.3
0.2
0.2
-3.7
-2.7
North East
10.4
8.7
5.4
6.0
11.2
18.7
21.0
7.4
-10.1
-8.1
-9.0
-9.2
Ethiopia
11.5
11.6
7.5
7.0
15.8
25.3
36.4
5.1
-4.5
-5.6
-5.6
-9.3
Sudan
10.2
6.8
4.0
5.5
8.0
14.3
11.0
9.0
-12.5
-9.0
-11.2
-9.1
Central
7.3
5.8
4.3
5.1
9.1
11.9
14.9
8.2
-4.8
-8.1
-8.9
-9.4
Congo D.R.
6.3
6.2
2.7
5.4
16.7
18.0
39.2
14.6
-1.5
-15.3
-14.6
-23.7
Kenya
7.1
1.7
2.5
4.0
9.8
13.1
12.0
7.8
-4.1
-6.8
-8.1
-6.3
Tanzania
7.1
7.4
5.0
5.6
7.0
10.3
10.6
4.9
-9.0
-9.7
-9.9
-9.1
Uganda
8.4
9.0
7.0
6.0
6.8
7.3
14.2
10.8
-3.1
-3.2
-5.5
-5.7
South
11.6
8.5
0.0
6.1
7.6
12.6
11.0
10.8
6.3
0.2
-6.3
-3.8
Angola
20.3
13.2
0.2
9.3
12.2
12.5
14.0
15.4
15.9
7.5
-3.4
2.2
Zimbabwe
-6.9
-14.1
3.7
6.0
-72.7
156.2
9.0
12.0
-10.7
-29.5
-21.4
-19.9
Middle west
5.8
5.3
2.6
4.4
4.5
10.1
8.8
6.6
8.0
9.3
1.4
4.3
Ghana
5.7
7.3
4.5
5.0
10.7
16.5
18.5
10.2
-12.0
-18.7
-12.7
-15.4
Nigeria
7.0
6.0
2.9
5.0
5.4
11.6
12.0
8.8
-18.8
20.4
6.9
13.8
South Africa
5.1
3.1
-2.2
1.7
7.1
11.5
7.2
6.2
-7.3
-7.4
-5.0
-6.5
Non oil producing
5.3
4.7
1.4
3.3
6.3
10.8
8.9
5.7
-5.2
-7.1
-5.7
-7.3
Oil producing
7.8
6.1
2.2
5.1
5.5
9.4
9.4
7.8
14.8
14.9
0.9
6.2
90
Note: e means estimation, f means forecast
Source: IMF.
Real GDP Growth in MENA
Real GDP Growth in MENA
Egypt
Syria
Tunisia
Algeria
Saudi Arabia
(Year)
Source: MSRC( IMF)
91
GDP per capita in MENA
(1000 dollars)
0 Yemen
GDP per capita in MENA
Egypt Syria Tunisia Algeria Saudi Kuwait Qatar
Arabia
Source: IMF( Estimation 2010)
92
Major Oil Producing Countries (2009)
Major Oil Producing Countries
Russia
Saudi Arabia
US
Iran
China
Canada
Mexico
UAE
Iraq
Kuwait
Venezuela
Norway
Nigeria
Brazil
Algeria
Qatar
Oman
Egypt
Sudan
Syria
Yemen
Tunisia
0
Source: BP
(million barrel/day)
93
Current Balance and Fiscal Balance in MENA countries
（GDP／％）
Current Balance: MENA
Yemen Tunisia Syria Egypt Algeria Saudi Qatar Kuwait
Arabia
Source: IMF( Estimation 2010)
（GDP／％）
Fiscal Balance: MENA
Algeria Egypt Yemen Syria Tunisia Saudi Qatar Kuwait
Arabia
Source: IMF( Estimation 2010)
94
International Competitiveness,
Trade and FDI
95
MENA’s Exports and Imports of
Goods and Services with the World,
by Commodity or Type of Service, 2009
Reprinted From: Akhtar, S., et al. 2013. p.9.
MENA’s Major Trading Partners, 2011
Reprinted From: Akhtar, S., et al. 2013. p.10.
U.S.-MENA Foreign Direct Investment (FDI), 2011
Reprinted From: Akhtar, S., et al. 2013. p.13.
FDI in MENA Countries
FDI in MENA Countries
Saudi Arabia
Turkey
UAE
Egypt
Qatar
Lebanon
Libya
Sudan
Jordan
Iran
Oman
Morocco
Tunisia
Algeria
Barren
Syria
Iraq
Yemen
Kuwait
Source: MSRC( based on UN reports 2005-2009 )
(billion dollars)
99
Socio-Economic Development
100
Economic Growth and Employment
Real GDP Growth
Employment Growth
1999-2008 annual average %
1999-2008 annual average. %
Tunisia
4.8
1.2
Egypt
4.6
2.5
Jordan
6.9
5.2
Algeria
4.2
4.0
Yemen
4.0
4.5
Saudi Arabia
4.0
3.0
UAE
7.4
2.9
Kuwait
7.7
2.8
Barren
6.4
2.8
Qatar
-
3.2
Oman
4.4
3.4
Countries
Source: IDB
101
Geopolitics and Security
102
Major Middle East Issues
•
Problem: Access to Water - Iraq, Saudi Arabia and other Persian Gulf
Countries, North Africa
Solution: setting up desalination plants that remove salt from the ocean
water for drinking
•
Problem: Middle East Issue – Palestinians want their own govt. – Israel
wants to control the area
Solution: Diplomacy with United States and other countries acting as
negotiator
•
Problem: Disagreement between Islamic Sects – Iraq, Lebanon, Syria
Solution: Secular Governments guarantee a percentage of leadership
positions to a certain sect; people will still disagree
•
Problem: Lack of Natural Resources like agricultural lands or forests
Solution: Countries invest in other industries like chemical manufacturing
or technology
103
Similarities
•
•
•
All believe in one God (monotheistic)
All trace ancestors back to Abraham
All began in the Middle East
Differences
•
Judaism
– Founder: Abraham (about 2000 BC)
– Holy Book: Torah
– Followers: Jews
– Followers: about 15 million
– Oldest of the 3 religions
– Beliefs: laws of God and words of His prophets
– 3 types: Orthodox, Conservative, Reform
104
•
Christianity
– Founder: Jesus (about 30 AD)
– Holy Book: Bible
– Followers: Christians
– Followers: about 2.1 billion
– Largest of 3 religions
– Beliefs: teachings of Jesus
– 3 types: Eastern Orthodox, Roman Catholic, Protestant
•
Islam
– Founder: Muhammad (about 610 AD)
– Holy Book: Koran or Qur’an
– Followers: Muslims
– Followers: about 1.3 billion; fastest growing of the
3 religions
– Beliefs: teachings of Muhammad, the last Prophet
– 3 types: Sunni, Shi’a, Sufi
105
Conflicts
•
The most powerful Iraqis (Arabs) are Sunni.
•
Most Iranians (Persians) are Shi’ites (Shi’a).
•
Most Kurds are Sunni, but are more closely related to Iranians (Persians)
Iraqi/Arab
Sunni
Iranian/Persian
Shi’a
Kurd/Persian
Sunni
106
Conflict in the Middle East
107
Syria Impact
108
Implications and Prospects
109
Economic Situation
The Gulf Cooperation Council (GCC), having relatively high per-capita
GDP due to crude oil export revenues, are promoting industrial
diversification.
- In African countries, whose main industry used to be agriculture, the
amount of per-capita crop production was low compared with the rest of the
world despite the fact that a majority of African people lived in rural areas;
consequently, their economic growth remained slack.
- Since the upsurge in resource prices, not only developed countries but also
emerging economies like China and Russia have made active investment in
resource development in Africa and, as a result, an increasing number of
African countries have shifted from an economic structures dependent on
agriculture to one centering on the development and export of natural
resources and achieved rapid economic growth.
- The plunge in resource and food prices and the global financial crisis since
the latter half of 2008 have posed a serious challenge for the economies of
Middle East and African countries, which had been developing steadily, by
shrinking the inflow of foreign and causing a drop in export revenues.
-
110
SWOT Analysis of ME
111
North Africa
112
Geography, History and Culture
113
114
115
North Africa: Early History
• First Egyptian Dynasty: 3100 B.C.
• Egypt’s dynasties reigned for 2,600
years
• Pharaohs ruled Egypt as gods and
kings
• Pyramids housed their bodies after
they went to the “afterlife”
• Egyptians were famous
mathematicians and doctors
116
• Close to SW Asia and Europe
• Has been invaded and occupied by
many peoples and armies, such as the
Greeks, Romans, and Turks.
• Islam is still the major cultural and
religious influence in North Africa
117
North Africa: Culture & Modern Life
• Culture is a combination of Arabic
influences and traditional African
ethnic groups.
• “Souks” or marketplaces, are
common in North Africa.
• “Rai” is an important form of
music from Algeria.
• It is modern popular music, but
also a form of protest
• Since the 1990’s it is
• typically a protest against Islamic
extremism.
118
Economic Growth and Status
119
North Africa Economy
• Early economy was based on agriculture
• Now economy is based on oil
• Libya & Algeria provide Europe with much of its oil and gas
• Problems: oil company jobs require education many North Africans do
not have, so they go to foreign workers. Many North African’s have
migrated to other places, especially France, to look for jobs.
120
121
Real GDP Growth of Oil Exporters and Oil Importers
Source: World Economic Outlook Database April 2010
122
Fiscal Net Lending/Borrowing and
Government Debt
Source: World Economic Outlook Database April 2010
123
Development of Manufacturing Industry
in North Africa
-
North African countries are notable in that: they have relatively high per-capita GDP compared
with sub-Saharan countries; are geographically close to Europe, being located on the opposite
site of the Mediterranean Sea; and have a gradually-developing manufacturing industry.
-
For North African countries, whose main industries used to be natural resources and agriculture,
industrial diversification was a challenge.
-
However, their manufacturing industry is now developing. This is presumably supported by
the fact that the wages in North African Countries are regarded as relatively low amid the rising
waged in Eastern Europe. From the trend in imports by Morocco, Tunisia, Egypt, Ethiopia and
Algeria, it is clear that their imports of machinery have increased significantly, suggesting that the
manufacturing industry is these countries is gradually growing.
Comparison of wage level in East Europe and Africa
124
Changes in Machinery Imports of Five Countries
in Africa
125
International Competitiveness,
Trade and FDI
126
West Asia (including GCC): FDI Inflows
(Value and Percentage of Gross Fixed Capital Formation,1995-2008)
Note: GCC(United Arab Emirates, The Kingdom of Bahrain, The Kingdom of Saudi Arabia, The Sultanate of Oman, Qatar, Kuwait)
127
FDI: Policy Development
- Since the late 1990s, there have been continuous legal reforms towards
liberalization in West Asian countries (including regulations governing the
status of foreign firms), with the new legal environment becoming more
favorable to foreign investors. Changes have included more liberal entry,
fewer performance requirements, more incentives, and more guarantees
and protection for investors. The number of activities in which FDI is barred
or restricted has been reduced, especially in the manufacturing sector, but
also, increasing, in natural resources and services. This liberalization trend
continued in 2008, with relevant policy measures implemented in a number
of countries.
-
In Saudi Arabia, the business visa requirements have been eased and
visas can be issued not only through Saudi embassies but also Chambers
of Commerce. In order to facilitate foreign investments into Saudi Arabia,
the Government set up 2 new one-stop-shop offices and allowed the Saudi
Arabian General Investment Authority offices abroad to issue investment
licenses to foreigners.
-
Kuwait, Jordan, Syria, Qatar, Oman and Turkey also have been liberalizing.
128
FDI: Prospects
 Fall In Inflows, but A Possible Rise In Outflows
-
FDI inflows to West Asia are expected to fall in 2009 as the impacts of the
ongoing global economic and financial crisis cause a further drop in
international trade and in key revenue sources, as well as a continued
tightening of credit markets for investment projects. Preliminary data show a
strong reduction in net cross-border M&A sales in West Asia during the first
half of 2009 (table II.12).60 However, accumulated reserves and brighter
prospects for oil prices could have a positive effect on FDI to West Asia in
the medium term.
-
According to UNCTAD’s World Investment Prospects Survey 2009–2011,
FDI prospects in West Asia seem more favourable than those reported in
the previous survey. Of the total respondents to the latest survey, 45%
expected an increase in FDI during the period 2009–2011 (compared with
32% for the period 2008–2010 of the previous survey), 47% expected no
change (compared with 67%), and 8% expected a decline (compared with
almost no respondents in the previous survey) (figure II.15).
129
- Outward FDI flows from West Asian countries, largely originating
from GCC countries, are expected to increase, as the global economic
and financial crisis offers new investment opportunities for cash rich
companies and investment funds. They can take advantage of their
relatively strong financial position to buy companies weakened by
tight credit markets at discount prices.
- Some of them have already begun to make acquisitions that support their
national economic development objectives. Particularly active in doing so
is the Government of the Abu Dhabi Emirate.
- In addition, some of them are planning to expand their operations abroad.
130
Improvement of Business Environment in North Africa
-
In North African countries, the business environment is also improving
gradually. In the global rankings of countries in terms of business
friendliness included in “Doing Business in the Arab World 2009” , a report
complied by the World Bank, even Tunisia, the highest-ranked country in
North Africa, is placed as low as 72nd. However, the business environment
in the region is improving, as exemplified by the reduction of the corporate
tax rate from 35% to 30% in Morocco in 2008 and the abolition of the
minimum paid-in capital for limited liability companies in Tunisia.
-
North African countries are trying to achieve market integration through
FTAs with the United States, European countries and GAFTA and
increase their attractiveness as a base for exports to their FTA partner
countries.
131
Socio-Economic Development
132
Relevance of rural employment: Youth & adults
Labor and (Un)employment
Region
Youth
population
(%, aged 1524)
Unemployment
rate (%)
Youth
unemployment
rate (%)
Adults
unemployment
rate (%)
Labour force
participation
rate (%)
Youth
Adults
labour force
labour force
participation (%) participation (%)
Latin America
& the
Caribbean
17.9
7.7
15.7
5.7
65.6
52.7
70.0
North Africa
20.0
9.9
23.4
6.2
51.5
36.6
57.9
South-East
Asia & Pac.
18.3
5.2
13.9
3.1
69.5
52.3
75.4
South Asia
19.7*
4.4
9.9
2.8
61.7
48.1
67.2
SSA
20.3
7.9
12.1
6.3
70.8
55.5
79.1
World
17.6
6.3
12.8
4.8
65.3
51.1
69.8
Sources: ILO, 2010; UN-DESA. 2008. South and Central Asia
133
Roles of Women
 Men-dominant Society?
– Society generally centered around men
– Men and women eat and pray separately
– Men work outside of home and women work inside (typically)
– Recently, women have gained more rights including
• Abolishment of plural marriage
• Increased penalties for abuse
• Right to divorce
• Abolishment of pre-arranged marriages
• Right to work outside the home in some countries
134
Geopolitics and Security
135
Tunisia Triggered the Arab Spring
136
Patterns
Arab Spring Success
Arab Spring Failure
Oil Countries
Libya
Bahrain, Saudi Arabia
Non-Oil Countries
Egypt, Tunisia, Yemen
Jordan, Morocco, Syria
137
Political Economy in MENA
□ Slow and Hesitant Transformation to A New Social Contract since the
1980s
-
From public sector to private sector driven: Emergence of private sector
-
More open economies: slow external liberalization
-
Towards more liberalization and deregulation of markets
-
More diversified economies
-
Continuation of many old redistributive policies (subsidies)
-
Continued limited political voice and participation
138
 Failure to Meet Many Critical Challenges Requires Deeper Institutional
Change
- Employment challenge
- Higher expectations by a younger and more educated population
- Pressures of globalization
- Critical water and environmental challenges
□ Critical Institutions which Need to Change
- Transition to institutions with less prevalence of “personal exchange” both in
the political and economic domains
-
Economic institutions with strong private property rights, less rent-seeking,
more open markets, rules-based government regulation and intervention
-
Political institutions with greater voice and accountability
139
Political Power in MENA
140
Various Risks the Instability in Egypt
Brings to the Region
Current situation in Egypt
Current situation in Middle
East and North Africa
Spread of Egyptian problem
and geopolitical risk
Political Issues
-Military regime gained
national support and took
power after the 1967 Six-Day
War
-But, increasing discontent
with Mubarak’s human right
and undemocratic practices
-Strong discontent toward
prolonged dictatorships Increasing number of
demonstrations spurred by
information exchanges on the
Internet
-Additional democratic and
human rights movements are
expected
-Fierce fight for political power
will lead to political instability
Economic Issues
-High unemployment rate and
inflation
-Economic stagnation and
reduced capital inflow,
incomplete economic reform
led to high unemployment
- High inflation due to high
dependence on imported food
-Most countries in the region
are suffering from high
unemployment and inflation
rate
-Countries without oil are
additionally suffering from job
creation and adequate welfare
system
-Political instability will lead to
stagnation in the economic
reform
-Investment from abroad will
decrease due to the instability
Foreign affairs Issues
-peace treaty with Israel (79),
ally with Israel and USA
-contributed to peace in the
Middle East by acting as
liaison between Arabic
nations, USA, and Israel
-Israel, Saudi Arabia are main
US allies in the region
-While many countries are antiUSA and anti-Israel
-Changes in Egyptian foreign
policies toward Israel could
increase the tension between
Arabic nations and Israel
Terrorism and Security
-Effort to fight Radical Islamic
forces and terrorism
-Collapse of dictatorship regimes
will weaken the anti-terrorism
efforts and pose threat to
national security
141
Implications and Prospects
142
Authoritarian Regime Dilemma
-
Benefits from stronger private sector: more growth, greater wealth base to
tax, ability to redistribute and satisfy supporters, minimize contestation
-
Accrual of these benefits requires: inclusive broad-based private sector,
limits on ruler’s discretion
-
Risks to rulers: greater ability of private sector to organize and revolt against
ruler
143
□ Improving Governance will be Critical to Move Forward on More
Difficult Reforms
-
Region’s inability to tackle deeper and more complex reforms points to
limitations of top-down approach of reform by decree
-
Deeper economic reform cannot proceed without reform of incentive
structures in which reforms are embedded
-
Governance reforms cannot be viewed as a separate agenda, to be
pursued at its own pace, but integral to all other reforms.
144
Comparison
145
Regional Comparison: SA and CA
 Endowments and Economy
-
CA is blessed with abundant valuable natural resources and agriculture whereas SA
is agricultural resources. CA is land-locked and has broad desert areas. However, it is
an important mediator in the ( old and new) Silk-road. SA is also a geographic
mediator between Europe and East Asia.
-
CA is faster in indusrialization than SA. Economic partners of CA are more diversified.
-
In the long-run, SA will develop better than CA, because it has more manpower and
locational advantages.
 Political Economy
-
SA has more diversified culture and political regimes than CA. SA is more
democratic.
-
CA should attain a balance between national independece (e.g. the meaning of CIS)
and peaceful international relations with super powers such as Russia, EU, China
and US.
-
SA should strengthen economic relations with East Asia.
146
Comparison of Political Economy of SA and CA
Central Asia
South Asia
Polity
Presidency, Republic
Presidency, Republic (Some
Kingdoms)
Government
Strong authoritarian
Authoritarian Democratic,
King’s rule
Natural Resources
Oil, Mineral
Agricultural
Population
40 million persons
1.4 billion persons
Human Resources
Skewed
Skewed
Recent GDP growth rate
8%
6%
GDP per capita
Kazakhstan: $3000, Rest:
Poor
Poor ($ 700)
Industrial Structure
From primary to
manufacturing
Agriculture dominant
Export
Primary products(oil, gas,
minerals), light products,
agricultural products
Agricultural products,
manufacturing products, s/w
International Relations
Russia, China, US
East and South Asia, US,
147
China
Real GDP Growth in Middle East and African Countries
Middle East/North Africa
Sub-Saharan Africa
Source: World Economic Outlook Database April 2010
148
FDI in Emerging Countries
FDI in Emerging Countries
(billion dollars)
China
Latin America
Middle East
South East Asia
North Africa
(Year)
Source: MSRC( based on UN reports )
149
The Unemployment Rate in MENA
The Unemployment Rate in MENA
Jordan
Tunisia
Syria
Saudi Arabia
Egypt
(Year)
Source: MSRC( IMF)
150
Major Wheat Exporting and Importing Countries in the
World
Major Wheat Exporting and Importing Countries
Canada
Europe
Argentina
Russia
←Over Imports
Over Exports →
China
India
Brazil
Middle East
South East Asia
North Africa
(million ton)
Note: Estimation 2010-2011
Source: United States Department of Commerce
151
The MENA Economy in Comparative Perspective
Reprinted From: Akhtar, S., et al. 2013. p.4.
The MENA Economy in Comparative Perspective
Reprinted From: Akhtar, S., et al. 2013. p.4.
The MENA Economy in Comparative Perspective
Reprinted From: Akhtar, S., et al. 2013. p.4.
MENA’s Trade as a Percent of GDP
Compared to Other Regions, 2010
Reprinted From: Akhtar, S., et al. 2013. p.8.
Economic Growth: Mediocre and Volatile
GDP per capita growth I MENA and other regions
(percent)
8
7
6
5
4
3
2
1
0
-1
-2
1970s
1980s
1990s
2000s
East Asia &
Pacific
Europe &
Central Asia
Latin America
& Caribbean
South Asia
Sub-Saharan
Africa
Middle East &
North Africa
156
Demographic Changes in the World
Africa
157
Corruption Perceptions Index
in 2010
Ranking
Country
Score
Ranking
Country
Score
1 Denmark
9.3
50 Jordan
4.7
1 New Zealand
9.3
50 Saudi Arabia
4.7
1 Singapore
9.3
54 Kuwait
4.5
4 Finland
9.2
59 Tunisia
4.3
4 Sweden
9.2
85 Morocco
3.4
6 Canada
8.9
98 Egypt
3.1
7 Holland
8.8
105 Algeria
2.9
8 Australia
8.7
127 Lebanon
2.5
8 Switzerland
8.7
127 Syria
2.5
19 Qatar
7.7
146 Iran
2.2
28 UAE
6.3
146 Libya
2.2
30 Israel
6.1
146 Yemen
2.2
41 Oman
5.3
172 Sudan
1.6
48 Bahrain
4.9
175 Iraq
1.5
Note: A higher score means less (perceived) corruption. CPI 2010 is based on13 independent survey .
Source: Transparency International
158
Number of Cell Phone Subscription in the World
159
Diverse Sub-regional Outlook
•North and Central Asia to grow at 4%
in 2013 up from 3.9% in 2012
•Kazakhstan to grow at 6%, up from
5% in 2012
GDP growth
East / North-East
South-East
South / South-West
2013
2012
North / Central
Pacific
0
• Inflation likely to be 6.4% in 2013
compared to 5.4% IN 2012
2
4
6
Percentage
8
10
12
Inflation
South / South-West
•North and Central Asia more exposed
to commodity-related risks
North / Central
Pacific
2013
2012
South-East
•Development of infrastructure is key to
accelerate growth especially for
landlocked countries in North and
Central Asia
East / North-East
0
Source: ESCAP
2
4
6
Percentage
8
10
160
12
Growing Inequality
•
•
•
Income inequality (Gini index) increased
from 33.5 in the 1990s to 37.5 in the
latest available year
Inequality-adjusted ‘real’ GDP per capita
falls
Sri Lanka: GDP per capita $4,555
to ‘real’ GDP per capita $2,323 (in
2005 PPP)
Republic of Korea: GDP per capita
$27,415 to ‘real’ GDP per capita
$19,492.
Inequality reduces social development
gains by over 20%
Pakistan: Gains reduced by over
30%
Russian Federation: Gains reduced
by over 10%
Inequality-adjusted social
development index
Inequality-adjusted GDP per
capita
Singapore
Korea Rep
Korea Rep
Russian
Fed
Malaysia
Georgia
Armenia
Kazakhstan
Kazakhstan
Russian
Fed
Sri Lanka
Iran Is Rep
Mongolia
Azerbaijan
Uzbekistan
Thailand
Kyrgyzstan
Maldives
Azerbaijan
Armenia
Tajikistan
Sri Lanka
Philippines
Georgia
China
Fiji
Thailand
Bhutan
Maldives
China
Mongolia
GDP per capita
Indonesia
Gini-adj
Philippines
Viet Nam
Turkey
Source: ESCAP
Turkey
0
20000 40000 60000
SDI
Gini-adj
0.0
0.5
161
1.0
Unsustainable Resource Use
•
•
•
Asia-Pacific economy is consuming
more resources to produce one dollar
of GDP
Future growth of resource use in
several countries holds significant
implications for overall resource
demand
Vulnerability to natural disasters
– 42% of the global economic
losses due to natural disasters
– Disaster losses since 1980 have
increased by 16 times in Asia
while GDP per capita has grown
by only 13 times
Domestic material consumption intensity
South / South-West
North / Central
South-East
Asia-Pacific
East / North-East
2008
Pacific
1992
World
0
2
4
6
Tonnes per US dollar
8
10
Water intensity
South / South West
North / Central
South-East
Asia-Pacific
East / North East
Pacific
World
0.0
0.2
0.4
0.6
0.8
1.0
Cubic metres per US dollar
Source: ESCAP
162
1.2
References
ADB. 2009. “The Economics of Climate Change in Southeast Asia: A Regional Review”
Asian Development Bank. (Google, PDF)
Akhtar, S., et al. 2013. “U.S. Trade and Investment in the Middle East and
North Africa: Overview and Issues for Congress”. Congressional Research
Service.
Blank, Stephen. 2008. “ The Strategic Importance of Central Asia: An American View.”
Parameters.
Geiger, Rainer. 2008. “OECD Eurasia Competitiveness Programme”. OECD.
Kelegama, S. and K. Pankh. “ Political Economy of Growth and Reforms in South Asia”.
Kumar, Nagesh. 2013. “Economic and Social Prospects of Asia and the Pacific: Focusing
on Inclusive and Sustainable Future”. ESCAP. (PPT)
Richard Pomfret. 2009. “Central Asia and the Global Economic Crisis”. EUCAM: EUCentral Asia monitoring. (Google, PDF)
163
Bongaarts, John. n.a. ”Demography of the Middle East”. (PPT)
Nabli, Mustapha K. 2008. “Institutional Change and Development in the
Middle East and North Africa”. (PPT, google)
164