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Survey of Economic and Social Developments in the Arab Region Economic and Social CommissionJOBS for Western Asia CONFLICTS TOURISM TAX REFORMS IMPROVEMENT Survey of Economic and Social Developments in the Arab Region 2017-2018 ESCWA/EDID/2018/1 Economic and Social Commission for Western Asia Survey of Economic and Social Developments in the Arab Region 2017-2018 UNITED NATIONS Beirut © 2018 United Nations All rights reserved worldwide Requests to reproduce excerpts or to photocopy should be addressed to the United Nations Economic and Social Commission for Western Asia (ESCWA), United Nations House, Riad El Solh Square, P.O. Box: 11-8575, Beirut, Lebanon. All other queries on rights and licenses, including subsidiary rights, should also be addressed to ESCWA. E-mail: [email protected]; website: www.escwa.un.org United Nations publication issued by ESCWA. The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Mention of commercial names and products does not imply the endorsement of the United Nations. References have, wherever possible, been verified. Symbols of the United Nations documents are composed of capital letters combined with figures. Mention of such a symbol indicates a reference to a United Nations document. The opinions expressed in this technical material are those of the authors and do not necessarily reflect the views of the Secretariat of the United Nations. ISSN: 0255-5123 eISSN: 2412-1061 ISBN: 978-92-1-128406-5 eISBN: 978-92-1-047729-1 Sales no.: E.19.IIL1 3 Preface The Survey of Economic and Social of good governance in order to enable Developments in the Arab Region is an economic planning and policymaking annual flagship publication of the Economic in support of inclusive and sustainable and Social Commission for Western Asia development. This 2017-2018 edition focuses (ESCWA). This publication is mandated by on analysis of the most recent socioeconomic General Assembly resolution 35/56, para. developments under a set format, with a 173; ESCWA resolution 270 (XXIV) paras. 2, reporting period primarily from January 3 and 4; and ESCWA resolution 303 (XXVII), 2017 to March 2018. There are two main paras. 1 and 2. This publication is linked to objectives: to analyse routinely monitored subprogramme 3 of ESCWA, on economic economic and social variables in the Arab development and integration, which seeks region in a global context (chapters 1 and 2) to contribute to efforts by member States to and to focus on studies of exchange-rate reform economic institutions and develop regime and its economic implications for the and implement policies based on principles region (chapter 3). Survey of Economic and Social Developments in the Arab Region 2017-2018 Preface 5 Acknowledgements The report was prepared under the overall Division (SDPD), Social Development Division direction and guidance of Moctar Mohamed El (SDD), Technology for Development Division Hacene, Director of the Economic Development (TDD), Statistics Division (SD), Emerging and and Integration Division (EDID) at the Economic Conflict-Related Issues Division (ECRI) and and Social Commission for Western Asia ESCWA Centre for Women (ECW). Constructive (ESCWA). Mohamed Hedi Bchir, Chief of the feedback and insightful comments from Modelling and Forecasting Section at EDID, ESCWA staff members during a seminar and led a core team, which included Ahmed from the Publications Committee meeting are Moummi, Seung Jin Baek and Nathalie Khaled also greatly acknowledged. with research assistance and administrative support from Arpy Atamian, Maroun Laoun, Policymakers and other stakeholders were also Nasser Badra, Rihab Baltagi, Ali Haffouda, consulted throughout the preparation of the Rahsa Khayat, Minkyung Lee, Yooji Choi and survey, and an external expert group meeting Taewan Shim. to review and validate the draft report was held on 26 June 2018 in Beirut. The experts were: The team would like to greatly acknowledge Abeer Elshennawy, Sherine Al-Shawarby, the internal peer review from Wafa Aboul Diana Abu Ghunmi, Nassib Ghobril, Ali Awdeh, Hosn, Mehmet Eris, Salim Araji and David Jun Kim and Sami Mouley. Krivanek, the valuable contribution from Khalid Abu-Ismail and Niranjan Saranji, and the A team from the Conference Services Section substantive contributions made by ESCWA (CSS) at ESCWA edited and designed the divisions: Sustainable Development Policies report. Survey of Economic and Social Developments in the Arab Region 2017-2018 Acknowledgements 7 Executive Summary Not only did the world economy strengthened led growth decelerations, in line with the in 2017, it appeared poised to maintain a above-mentioned OPEC agreement. The trajectory of growth through 2018. Global gross economies of oil-importing countries have domestic product (GDP) growth reached 3.1 expanded following the stronger-than- per cent compared to 2.5 per cent in 2016. This expected recovery of the global economy, global growth was driven by the rebound in but more so in European countries than in the worldwide trade dynamics, a strong investment Arab region. But a gradual improvement in initiative and improved labour market the regional economic outlook is anticipated: conditions in the world’s major economies. growth rates of 3.3 per cent and 3.2 per cent Developing countries were also a driving factor are expected for 2018 and 2019 respectively. in the global economic uptick, propelled by These projections are based on oil production robust domestic consumption and increased dynamics, a series of policy reforms and infrastructure investment. fiscal adjustments and improvements in the tourism sector, along with a moderate The global economic upturn intensified world reduction in geopolitical tensions in the demand for oil, as economic recovery in forthcoming years. major economies increased consumption. The stronger demand increased transactions Looking ahead, the sanctions of the United in the oil futures market. In late 2016, the States of America against Iran and its Organization of the Petroleum Exporting crude oil exports are expected to intensify Countries (OPEC) agreed to reduce crude oil supply shortages further, keeping oil prices production to rebalance the oil market and high for the rest of 2018. In June 2018, the counteract the stubbornly low oil prices that Saudi-led oil-producing countries agreed had restrained growth and fiscal performance to a new output level, effectively increasing in the Arab region in 2015-2016. As a result, oil production by almost 1 million barrels there was shortage of global petroleum per day. The oil sector is expected to fully inventories over the period 2016-2017 and the rebound in 2018, reflecting the increase in price of oil started to rise steadily. the region’s total gross oil export revenues. All these dynamics complicate the oil market Such upbeat dynamics were, however, landscape, increasing the vulnerability of unequally distributed across countries and economic growth prospects of the region. regions, raising questions of sustainability in the long run. Against a backdrop of the As for fiscal performance, nearly all Arab global growth, economic growth in the States continue to run deficits despite Arab region slowed to 1.5 per cent in 2017 having implemented extensive austerity from 2.8 per cent the year before, largely measures. These ongoing efforts to adjust due to underperformance in the region’s fiscal deficit challenges will eventually pay oil exporters. Subdued economic activities off. Arab Governments have been taking a in both Gulf Cooperation Council (GCC) tighter monetary stance and experiencing the countries and non-GCC oil exporters was consequent financial costs. Central banks in largely attributed to hydrocarbon sector- the Arab region have increased their policy Survey of Economic and Social Developments in the Arab Region 2017-2018 Executive Summary 8 rates in tandem with interest rate hikes in the political instability, cultural norms and United States. The rapid dollar appreciation traditional gender expectations in certain has raised the cost of international financing Arab countries are common concerns that for the region and many Arab countries are impede women participation in the economy using debt issuance for deficit financing and decision-making at all levels. purposes. Although some countries, particularly GCC countries, have made Conflict and political instability continue to efforts to lessen their liquidity pressures and hinder social and human development on enhance their ability to supply credit to the many fronts. Three countries in the region, private sector, this tightening monetary stance Iraq, the Syrian Arab Republic and Yemen, is expected to continue in the years to come. were classified as Level 3 emergencies during Nonetheless, geopolitical uncertainty and 2017 and the Syrian conflict is still the source high levels of public debt continue to weigh of the largest refugee crisis worldwide. The heavy. Economic prospects are also clouded labour market in conflict-affected countries by a trend of increasing trade protectionism. has failed to recover and to close the gap between males and females. The Syrian Arab From the social development angle, despite Republic has the highest female unemployment the recognizable progress in the Arab region rate and Yemen
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