Arab World Economies

Arab World Economic FreedomIRFNovember 2010

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Pakistan

North Korea

Canada

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