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The Social Contract in the MENA Region and the Energy Sector Reforms

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  • Sara Brzuszkiewicz

    (Fondazione Eni Enrico Mattei)

Abstract

During the last few years and because of the low oil prices in particular, the increasing awareness of the unsustainability of subsidized systems led several MENA countries to take steps to lower subsidies, which have been part of the social contract for decades, especially as far as the energy sector is concerned. Nowadays, the need for reforms is compelling for more than one reason. Namely, the subsidized system distorts market trends, fosters inefficient use of resources, depresses foreign direct investment and fuels overconsumption, which is no longer sustainable, particularly as far as the population growth in most of the MENA countries is concerned. In this paper both the resource-abundant countries and the energy importing nations will be analyzed, in order to investigate similarities and differences between the two and to carry out an initial assessment of the reforms in two representative countries, namely Saudi Arabia, exporting country par excellence, and Egypt, which imports energy.

Suggested Citation

  • Sara Brzuszkiewicz, 2017. "The Social Contract in the MENA Region and the Energy Sector Reforms," Working Papers 2017.04, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2017.04
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    References listed on IDEAS

    as
    1. Mr. Ananthakrishnan Prasad & Heba Abdel Monem & Pilar Garcia Martinez, 2016. "Macroprudential Policy and Financial Stability in the Arab Region," IMF Working Papers 2016/098, International Monetary Fund.
    2. Mr. David Coady & Ian W.H. Parry & Louis Sears & Baoping Shang, 2015. "How Large Are Global Energy Subsidies?," IMF Working Papers 2015/105, International Monetary Fund.
    3. Corden, W M, 1984. "Booming Sector and Dutch Disease Economics: Survey and Consolidation," Oxford Economic Papers, Oxford University Press, vol. 36(3), pages 359-380, November.
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    More about this item

    Keywords

    Energy Sector; Subsidies; Subsidy Reforms; MENA Region; Saudi Arabia; Egypt; Rentier State; Resource Curse Theories;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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