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Keynote by Dr. Salem Al Ismaily at the 4. Economic Freedom of the Arab World Conference in Marrakech, 13.-15. November 2009
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Arab EF Annual ConferenceArab EF Annual Conference
Weathering the StormWeathering the Storm
Marrakech, MoroccoMarrakech, Morocco
November 13 - 15, 2009November 13 - 15, 2009
Consumer SpendingConsumer Spending Government SpendingGovernment Spending Export DevelopmentExport Development
Create demand and access to disposalCreate demand and access to disposal
incomeincome
Global recession will not affect the Arab Global recession will not affect the Arab
World as predicted.World as predicted.
Resource rich countries maintained Resource rich countries maintained high government spending.high government spending.
Labor abundant countries will have Labor abundant countries will have delay effect due to low remittance, delay effect due to low remittance, reduced FDI and reduced tourists reduced FDI and reduced tourists inflow.inflow.
Countries less globally integrated are Countries less globally integrated are not to be severely affected. not to be severely affected.
GDP growth for year 2008 was 6%GDP growth for year 2008 was 6%
Predicted growth for 2009 is 3.1 % Predicted growth for 2009 is 3.1 % with exception of Abu Dhabi, Oman with exception of Abu Dhabi, Oman and Qatar (over 5%)and Qatar (over 5%)
Saudi Arabia increased government Saudi Arabia increased government spending by 15% Oman 28% Qatar spending by 15% Oman 28% Qatar 25% and Abu Dhabi the same level 25% and Abu Dhabi the same level as 2008as 2008
Kuwait stimulus pack was US$b5.2, Kuwait stimulus pack was US$b5.2, Saudi US$b124.7 and UAE US$b32.7Saudi US$b124.7 and UAE US$b32.7
Morocco, Tunis, Jordan, Lebanon, Morocco, Tunis, Jordan, Lebanon,
Egypt and Syria will suffer delayed Egypt and Syria will suffer delayed effect from the decreased remittance, effect from the decreased remittance, tourism income and FDI as investors tourism income and FDI as investors confidence needs to be restoredconfidence needs to be restored
Total amount of remittance was Total amount of remittance was US$b33.7 in 2008.US$b33.7 in 2008.
Remittance for Morocco was 8%, Remittance for Morocco was 8%, Jordan 14%, Lebanon 20% of GDPJordan 14%, Lebanon 20% of GDP
FDI will decrease by US$b11FDI will decrease by US$b11
Syria will have US$b5 in government Syria will have US$b5 in government
deficitdeficit
Egypt will suffer 35% reduction of Suez Egypt will suffer 35% reduction of Suez canal revenuescanal revenues
The biggiest challenge will be the The biggiest challenge will be the creation of jobs as more people will be creation of jobs as more people will be loosing their jobs while those entering loosing their jobs while those entering the job market will increase the job market will increase
For all the Arab world it is imperative For all the Arab world it is imperative that the conditions conducive to doing that the conditions conducive to doing business are created.business are created.
Gov. influence in economic or business Gov. influence in economic or business decisions (incentives/subsidies, legislation, decisions (incentives/subsidies, legislation, ownership and government expenditure) .ownership and government expenditure) .
Size of the government as net producer and Size of the government as net producer and consumer ( percentage of GDP).consumer ( percentage of GDP).
Number, scale and types of government. Number, scale and types of government. Enterprises. Enterprises.
Taxation.Taxation.
1- Size of Government1- Size of Government
Source: IRF - 2009Source: IRF - 2009
CountryCountry ScoreScore
Lebanon Lebanon 8.68.6
Egypt Egypt 7.27.2
Bahrain Bahrain 6.66.6
Morocco Morocco 6.66.6
Jordan Jordan 6.66.6
OmanOman 5.55.5
KSA KSA 55
AlgeriaAlgeria 4.74.7
2 - 2 - Legal StructureLegal Structure
Impartiality of judiciaryImpartiality of judiciary
IndependenceIndependence
Access to justiceAccess to justice
Efficiency and speed of legal systemEfficiency and speed of legal system
Protection of property rights Protection of property rights
Enforcement of ContractsEnforcement of Contracts
2- Legal Structure2- Legal Structure Source: IRF - 2009Source: IRF - 2009
Country Score
KSA 8.1
Oman 8.0
Kuwait 7.8
Morocco 7.4
Libya 5.8
Syria 5.7
Algeria 5.7
Sudan 4.5
3 - 3 - Access to Sound MoneyAccess to Sound Money
Power, responsibility and independence Power, responsibility and independence of the Central Bank.of the Central Bank.
Inflation rate.Inflation rate.
Access to foreign currencies.Access to foreign currencies.
Local/foreign currency controls.Local/foreign currency controls.
3- Access to Sound Money Source: IRF - 2009Source: IRF - 2009
Country Score
Lebanon 9.3
Oman 9.1
Djibouti 9.1
KSA 9.1
Morocco 6.8
Sudan 6
Libya 5.9
Comoros 4.8
4 – 4 – Freedom to exchange with Freedom to exchange with foreigners foreigners
Taxes on international trade.Taxes on international trade.
Regulatory trade barriers.Regulatory trade barriers.
International capital market controls.International capital market controls.
Access to foreign capitalAccess to foreign capital
Restrictions on foreign capital transactionsRestrictions on foreign capital transactions
4- Freedom to Exchange with foreigners Source: IRF - 2009Source: IRF - 2009
Country Score
Yemen 8.8
Qatar 8.4
Bahrain 8.3
Oman 8.2
Morocco 5.4
Syria 5.4
Tunisia 5.0
5 - 5 - Regulation of credit,labour & Regulation of credit,labour &
businessbusiness
Credit market regulations (banks, extension of Credit market regulations (banks, extension of credit, interest rate controls)credit, interest rate controls)
Labour market regulations (localization of Labour market regulations (localization of labour, impact of minimum wage, hiring and labour, impact of minimum wage, hiring and firing practices)firing practices)
Business regulations (price controls, barriers to Business regulations (price controls, barriers to enter new business, effect of bureaucracy on enter new business, effect of bureaucracy on business efficiency/probusiness efficiency/productivityductivity
Country Score
Bahrain 8.7
Lebanon 7.9
Oman 7.9
KSA 7.9
Morocco 6.5
Egypt 5.8
Mauritania 5.6
Syria 5.5
5 - Regulations of Credit, Labor, & business Source: IRF - 2009Source: IRF - 2009
Summary Ratings Source: IRF - 2009Source: IRF - 2009
Country Score
Bahrain 7.9
Kuwait 7.8
Lebanon 7.8
Oman 7.7
Morocco 6.6
Tunisia 6.4
Mauritania 6.4
Syria 5.8
Algeria 5.7
Thank YouThank You