Arab World Economies
Arab World Economic FreedomIRFNovember 2010
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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.
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
Consumer Spending Government Spending Export Development
Create demand and access to disposalincome
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.
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.
Size of GovernmentSource: IRF - 2010
Country ScoreLebanon 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
2 - Legal Structure
Impartiality of judiciary
Independence
Access to justice
Efficiency and speed of legal system
Protection of property rights
Enforcement of Contracts
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
3 - Access to Sound Money
Power, responsibility and independence of the Central Bank.
Inflation rate.
Access to foreign currencies.
Local/foreign currency controls.
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
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
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
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
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
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
Thank You
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