Natural Resource Abundance, Growth, and Diversification in the Middle East and North Africa : The Effects of Natural Resources and the Role of Policies

Contents
Acknowledgments
Contributors
Chapter Abstracts
Abbreviations
Chapter 1 An Overview of Diversification in MENA: Rationale, Stylized Facts, and Policy Issues
The Facts: MENA Economies’ Low Level of Diversification
Figures
1.1 Changes in the Composition of GDP, 1980–83 to 2007–10
1.2 Services Share in GDP by Level of Income
Boxes
1.1 How Is MENA Performance Captured and Benchmarked in This Volume?
1.3 Share of Services in Nonmining GDP
1.4 Drivers of Export Growth (Excluding Oil Products), 1998–2008
Limited Diversification, Natural Resource Rents, and Growth Volatility
1.5 Natural Resource Rents in 2010, by Region
Why Is Greater Diversification Desirable in MENA?
1.6 Growth Volatility, by Region
The Role of Rents and Real Exchange Rates
The Role of Weak Links in Output Concentration
Fiscal Policy and Output Concentration
Natural Resources and Incentives for Regional Trade Reforms
Notes
References
Chapter 2 Resource Abundance and Growth: Benchmarking MENA with the Rest of the World
Benchmarking MENA’s Long-Term Growth and Volatility
2.1 MENA Long-Run Growth Performance
Tables
2.1 Per Capita Income Mobility, 1982–2010
2.2 Growth and Its Volatility, 1982–2010
Correlates of MENA’s Growth Performance
2.3 Real Effective Exchange Rate Volatility by Period
2.4 Deviations from Estimated Equilibrium Real Exchange
2.2 Estimated Equilibrium Real Exchange Rates
2.1 MENA in the Natural Resource Curse Literature
2.3 Frequency Ratios, Core NTMs, 2001–10
2.5 Policy Indicators Affecting Trade in MENA
2.6 Correlates of Bilateral Non-Oil Exports
2.4 Average Distance of Trade and Trade Costs
2.5 Average Trade Distance of MENA Countries with Traditional and New Trade Partners
2.7 Firm-Level Productivity, MENA and Non-MENA
2.6 Export Diversification and per Capita Income
2.7 Kaplan-Meier Survival Rates
2.8 Correlates of Hazard Rates for 4-Digit Export Flows
Conclusion
Annex 2A Trade, Structural Change, and Natural Resources
2A.1 Correlates of Trade Shares in GDP
2A.1 Predicted Trade Shares in GDP
2A.2 Correlates of the Share of Manufactures and Services in GDP
2A.3 Correlates of the Share of Manufactures and Services in GDP in MENA
2A.2 Actual versus Predicted Shares of Manufactures and Manufacture Exports: MENA
Annex 2B Ten Observations on Successful Growth
Annex 2C Applied Tariff Protection Is Still Relatively High
2C.1 Predicted Applied MFN Protection
Annex 2D Ad-Valorem Equivalents Estimations
2D.1 Frequency Distribution of the Number of NTMs
2D.2 Ad-Valorem Equivalents of NTMs
2D.1 Ad-Valorem Equivalent of NTMs and per Capita Income
Notes
References
Chapter 3 Rents, Regulatory Restrictions, and Diversification toward Services in Resource-Rich MENA
Services in MENA: Stylized Facts
3.1 Services Value-Added Growth and GDP Growth in MENA
3.2 Composition of Exports in MENA and South Asia, 2008
3.3 Changes in the Composition of GDP: 1980–83 to 2007–10
3.4 Services Share in GDP by Level of Income
3.5 Services Share in GDP, MENA versus Rest of the World
Relative Roles of Engel’s Effects in Consumption and Rents
3.6 Share of Services in Nonmining GDP
3.7 Share of Consumption of Services in GDP
3.8 Share of Imported Services in GDP
3.1 Share of Rents from Natural Resources in GDP
3.2 Correlates of the Share of Services in GDP
3.3 Determinants of the Services Share in GDP
The Role of Microeconomic Regulations
3.9 Restrictiveness of Services Trade Policies and Share of Services in GDP, MENA-GCC, GCC, and Other Regions
3.1 Regulatory Restrictions in MENA: Findings from Other Case Studies
Export Diversification Opportunities for Resource-Poor MENA
3.2 Dubai’s Successful Approach to Diversification
Concluding Remarks
Notes
References
Chapter 4 Patterns of Diversification in MENA: Explaining MENA’s Specificity
Empirical Methodology
Measuring Weak Links and Dutch Disease Effects
Data Description
Empirical Results
4.1 Sample Coverage and Number of Observations
4.2 Summary Statistics of Measures of Diversification
4.3 Correlation between Measures of Diversification
4.4 Descriptive Statistics of P(low)
4.5 Imbs and Wacziarg’s Results (2003)
4.6 Basic Regressions of Concentration on a Quadratic Function of GDPpc
4.1 Diversification of Output (Giniout) on GDP per Capita
4.2 Diversification of Output (Giniempl) on GDP per Capita
4.3 Diversification of Output (Ginivadd) on GDP per Capita
4.7 Regressions of Concentration Including [GDPpc]3 and [GDPpc]4
4.8 Splitting Samples between Middle East and North Africa and the Rest of the World
4.4 Marginal Effect of GDPpc on Output Concentration [Giniout]
4.5 Marginal Effect of GDPpc on Employment Concentration [Giniempl]
Concluding Remarks
4.6 Marginal Effect of GDPpc on Value-Added Concentration [Ginivadd]
4.9 Stages of Diversification and Weak Links versus Exchange Rate Appreciation
4.10 Splitting the Sample after Lower Tails of Productivity
4.11 Splitting the Sample after Changes in the Real Exchange Rate
4A.1 Expanding Imbs and Wacziarg’s Samples
4A.2 Regressions of Diversification on Income Level for OPEC Countries
4A.3 Regressions of Concentration for Subsamples of MENA Countries
Notes
References
Chapter 5 Fiscal Policy and Diversification in MENA
Role of Fiscal Policy in the Aftermath of the Arab Spring
5.1 Fiscal Dynamics in the Middle East on the Eve of the Arab Spring, 2010
5.1 Selected MENA Economics: Real GDP Projections and Fiscal Assessment
Fiscal Policy in MENA: Stylized Facts
5.2 Fiscal Balances in MENA, 2000–10
5.3 Real GDP Growth Rates in MENA, 2000–10
5.4 Revenue and Expenditures in MENA, 2000–10
5.5 GCC Government Fiscal Policy
5.6 GCC Sovereign Wealth Funds
Fiscal Policy and Diversification
5.7 Level of Subsidies, 2006–10 Average
5.8 Distribution of Subsidies to Poorest 40 percent
5.9 Public and Private Capital, 1982–2010
5.10 Saudi Arabia’s GDP Decomposition
5.11 Number of Exported Products Compared across Four Countries, 2007
5.12 Jordanian Diversification
The Behavior of Fiscal Policy in MENA: Econometric Evidence
Concluding Remarks
Notes
References
Chapter 6 Natural Resource Heterogeneity and the Incentives for and Impact of Regional Integration
Trade Agreements in MENA: An Analytical Setup
Empirical Results
6.1 Trade Creation and Diversion for Each Agreement Involving MENA Countries, 1990–2009
6.2 Decomposition of Intra-PAFTA Trade Creation and Diversion According to Natural Resources Endowment, 1990–2009
6.3 Decomposition of Intra-PAFTA Trade Creation and Diversion According to Natural Resources and Labor Endowment, 1990–2009
6.4 Decomposition of Intra-PAFTA Trade Creation and Diversion
6.1 Predicted Non-Oil Trade Diversion by MENA Countries Given the Pre-PAFTA Concentration Index Value
Concluding Remarks
6.2 Regional Distribution of Export Growth by Sector for Resource-Rich and Resource-Poor Countries
6A.1 Agreements Involving MENA Countries as Importer
Notes
References
Appendix A Country Grouping Classifications
A.1 Comparator Groups
Notes
References