The 2010 economic freedom of the arab world report main findings and policy implications

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The 2010 economic freedom of the arab world report main findings and policy implications

  1. 1. Arab World Economies Arab World Economic Freedom IRF November 2010
  2. 2. Kerosene Lamp
  3. 3. Studying under the street lights
  4. 4. Night Satellite photo of the World
  5. 5. Pakistan
  6. 6. North Korea
  7. 7. Canada
  8. 8. Inherited Prosperity • Prosperity is derived from selling inherited natural resources or real estate. • Prosperity is limited by the amount of natural resources available, and ultimately temporary. • Focus gravitates towards the distribution of wealth as interest groups seek a bigger share. • Government is the central actor in the economy as the owner and distributor of wealth.
  9. 9. Created Prosperity • Prosperity is derived from creating valuable products and services • Prosperity is created by firms • Prosperity is unlimited, based only by the innovativeness and productivity of companies • Creating the conditions for productivity and innovation are the central policy question • Companies are the central actors in the economy • The government’s role is to create the enabling conditions
  10. 10.  Consumer Spending  Government Spending  Export Development Create demand and access to disposal income
  11. 11.  Global recession will not affect the Arab World as predicted.  Resource rich countries maintained high government spending.  Labor abundant countries will have delay effect due to low remittance, reduced FDI and reduced tourists inflow.  Countries less globally integrated will not to be severely affected.
  12. 12. 1 Size of the government  Gov. influence in economic or business decisions (incentives/subsidies, legislation, ownership and government expenditure) .  Size of the government as net producer and consumer ( percentage of GDP).  Number, scale and types of government. Enterprises.  Taxation.
  13. 13. Size of Government Source: IRF - 2010 Country Score Lebanon 8.4 Comoros 8.3 W. Bank Gaza 7.2 Egypt 7.1 Oman 5.3 Djibouti 5.3 KSA 5.0 Algeria 4.6
  14. 14. 2 - Legal Structure  Impartiality of judiciary  Independence  Access to justice  Efficiency and speed of legal system  Protection of property rights  Enforcement of Contracts
  15. 15. 2- Legal Structure Source: IRF - 2010 Country Score KSA 8.2 Oman 8.0 Kuwait 7.8 Mauritania 7.7 Algeria 5.8 Syria 5.7 Iraq 4.2 Somalia 1.3
  16. 16. 3 - Access to Sound Money  Power, responsibility and independence of the Central Bank.  Inflation rate.  Access to foreign currencies.  Local/foreign currency controls.
  17. 17. 3- Access to Sound Money Source: IRF - 2010 Country Score Bahrain 9.1 Kuwait 8.9 Lebanon 8.8 KSA 8.6 Mauritania 5.8 Sudan 5.6 Iraq 5.4 Libya 5.2
  18. 18. 4 – Freedom to exchange with foreigners  Taxes on international trade.  Regulatory trade barriers.  International capital market controls.  Access to foreign capital  Restrictions on foreign capital transactions
  19. 19. 4- Freedom to Exchange with foreigners Source: IRF - 2010 Country Score Yemen 8.7 Bahrain 8.4 Qatar 8.2 Jordan 8 Morocco 5.3 Algeria 5.1 Syria 5.1 Tunisia 4.9
  20. 20. 5 - Regulation of credit,labour & business  Credit market regulations (banks, extension of credit, interest rate controls)  Labour market regulations (localization of labour, impact of minimum wage, hiring and firing practices)  Business regulations (price controls, barriers to enter new business, effect of bureaucracy on business efficiency/productivity
  21. 21. Country Score Bahrain 8.7 KSA 8.1 Lebanon 8 Oman 7.9 Egypt 5.9 Sudan 5.9 Mauritania 5.8 Syria 5.5 5 - Regulations of Credit, Labor, & business Source: IRF - 2010
  22. 22. Summary Ratings Source: IRF - 2010 Country Score Bahrain 8 Kuwait 7.8 Lebanon 7.6 Oman 7.5 Mauritania 6.3 Tunisia 6.3 Syria 5.7 Algeria 5.5
  23. 23. Thank You

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