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Is there Fiscal Space for Financing an Arab Development Transformation?


  • Khalid Abu-Ismail

    () (Macroeconomics and Poverty Advisor in UNDP?s Sub-Regional Resource Facility for the Arab States)

  • Rathin Roy

    () (International Policy Centre for Inclusive Growth)

  • Raquel Almeida Ramos

    () (IPC-IG)


The fundamental development challenge in the Arab region is one of economic transformation or, more pertinent, a lack thereof. Heavy sectoral weights of extractive industries lead to dependence on global oil prices, even in oil-producing countries. The structure of production limits employment generation for skilled and semi-skilled labour. Low-skill services and informal activities then absorb the labour force, with corresponding harm to aggregate productivity and living standards. The slow emergence of manufacturing capacities distinguishes the economies of the Arab region from other developing countries. Compared to suitable aggregates or, more poignant, the successful Asian emerging economies, manufacturing exports from the Arab region do not contribute sufficiently to growth. Concurrently, growth is volatile and saving and investment rates are significantly below what is required to undertake this economic transition (see Arnim et al., 2011; Abu-Ismail, Moustafa, and Arabaci, 2011; Abu-Ismail et al., 2011). (?)

Suggested Citation

  • Khalid Abu-Ismail & Rathin Roy & Raquel Almeida Ramos, 2012. "Is there Fiscal Space for Financing an Arab Development Transformation?," Working Papers 88, International Policy Centre for Inclusive Growth.
  • Handle: RePEc:ipc:wpaper:88

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    References listed on IDEAS

    1. Mintz, Jack M. & Smart, Michael, 2006. "Incentives for public investment under fiscal rules," Policy Research Working Paper Series 3860, The World Bank.
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