Embed Size (px)
DESCRIPTION
Is Jordan's Ranking as No. 1 in the Arab World in terms of Economic Freedom relevant?
Citation preview
Is Jordan No.1 Ranking in the Economic Freedom of the Arab World Report Justified?
Yusuf MansurNov 19 2014
1
Content
• Jordan in International Reports and Rankings
• Major Indicators of Global Competitiveness Report
• Major Indicators of Doing Business Report
• Major Indicators of Economic Freedom of the World
• What’s the difference between the two Indices?
• Major Indicators of the Economic Freedom of the Arab World of the World
• GDP Growth Rate and Government Spending, % of the GDP 1980-2013
• GDP Growth Rate and Budget Deficit 1980-2013
• GDP Growth Rate and Public Debt 1980-2013
• Conclusion
2
Country Rank 2012 Rank 2011 Rank 2010
Jordan 1 2 3
United Arab Emirates 2 3 1
Bahrain 3 1 1
Kuwait 4 4 4
Oman 5 6 5
Qatar 5 6 7
Lebanon 7 5 5
Saudi Arabia 8 8 8
Yemen, Republic 9 9 9
Tunisia 10 10 10
Egypt, Arab Republic 11 11 12
Comoros 12 15 10
Djibouti 12 14 13
Mauritania 12 16 16
Morocco 12 12 14
Libya 16
Sudan 17 13
Syrian Arab Republic 18 15
Iraq 19 17
Algeria 20 18 17
Economic Freedom of the Arab World Rankings
3
Shows consistent improvements in Jordan
Dubai & Bahrain are regressing or not doing as well
Jordan in International Reports and Rankings
Year Doing Business
Global Competitiveness
Economic Freedom of the World
Economic Freedom of the Arab World
The Global Innovation Index
Misery index
2005 73 42 36 52006 74 52 45 52007 78 49 52 4 532008 80 48 45 3 482009 101 50 62 6 552010 100 65 23 3 582011 111 71 13 2 412012 96 64 9 1 56 212013 106 68 61 322014 119 64 64
4
• Jordan came 9th in world and 2nd in the Arab World in EFW, and 1st in EFAW in 2012• Improved in GCR from 71 to 64•Worse in GII from 41 to 56•Worse in Doing Business from 111 to 112 (96) => Due to re-ranking
Major Indicators of Global Competitiveness Report
Major Indicators
Rank
2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 2014-2015133
Countries 139
Countries 142
Countries 144
Countries 148
Countries 144
Countries Basic Requirement 46 57 61 73 76 66
Institutions 25 41 45 37 38 42Infrastructure 42 61 59 71 54 60Macroeconomic Environment 105 103 97 131 138 112Health and Basic Education 57 65 72 47 65 56
Efficiency Enhancers 66 73 78 70 70 70Higher Education and Training 42 57 59 48 56 55Market Efficiency 43 46 54 40 39 44Labor Market Efficiency 106 112 107 94 101 101Financial Market Development 52 54 65 66 79 65Technological Readiness 61 62 59 73 70 69Market Size 82 84 88 88 87 84
Innovation & Sophistication Factors 51 65 70 42 51 52
Business Environment Dev 49 66 68 42 47 55Innovation 59 68 77 41 53 57
5
In 2012 GCR: Infrastructure, Macroeconomic Env., and Financial Market Dev. worsened…Ranking improved overall from 71 to 64
Major Indicators of the Doing Business Report
Major Indicators 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Ease of Doing Business 73 74 78 80 101 100 111 96 106 119
Starting a Business 127 133 133 133 119 125 127 95 103 117Dealing with ConstructionPermits 68 71 70 71 116 92 92 93 102 111
Employing Workers 30 45 30 45 48 51 N/A N/A N/A N/A
Registering Property 110 106 110 109 105 106 106 101 102 104
Getting Credit 76 80 83 84 125 127 128 150 167 170
Protecting Investors 114 105 118 107 114 119 120 122 128 170
Paying Taxes 16 19 18 19 22 26 29 21 35 35
Trading Across Borders 85 51 78 59 77 71 77 58 52 57
Enforcing Contracts 72 128 75 128 129 124 129 130 129 133
Closing a Business 79 84 84 87 96 96 98 104 112 113
Participating Countries 135 155 175 178 181 183 183 183 185 189
6
Worsened: Construction Permits, Getting Credit, Enforcing contracts, and Closing a business; overall ranking also worsened, albeit slightly.
Year Rating & Rank Gov Size
Legal Structure & Security of
Property Rights
Access to Sound Money
Freedom to Trade
Regulation of Credit, Labor & Business
2000Rating 7.40 -* 6.08 - 7.22 - 9.67 - 7.22 - 6.83 -Rank 34 - 68 - 38 - 7 - 62 - 44 -
2005Rating 7.61 7.7 6.85 6.6 6.86 7.2 9.21 9.2 7.76 8.1 7.40 7.4Rank 27 5 54 3 42 9 37 3 40 5 29 7
2009Rating 7.14 7.7 4.9 5 6.76 7.4 9.27 9 7.18 7.9 7.04 7.6Rank 50 4 104 15 41 7 36 5 44 5 39 7
2010Rating 7.78 8 8.11 7.5 6.53 7.4 9.12 9 7.70 7.9 7.53 7.7Rank 13 2 16 4 49 7 43 3 44 5 19 5
2011Rating 7.80 8 8.33 7.9 6.54 7.2 9.10 9 7.72 8 7.43 7.8Rank 12 1 10 3 47 8 46 4 39 5 28 6
2012Rating 7.84 8.1 8.95 8.4 6.61 7.2 9.22 9.1 7.72 8 6.90 7.7Rank 12 1 4 2 45 7 43 4 38 4 65 7
Major Indicators of Economic Freedom of the World
*Economic Freedom of the Arab World Ranking Only regulation of credit, Labor and Business became worse from 2011, everything else improved.
Missing Items in the Economic Freedom of the Arab World report
• B. Regulatory trade barriers
(i) Non-tariff trade barriers
(ii) Compliance costs of importing and exporting
(iv) Extra payments/bribes/favoritism
(v) Licensing restrictions
(vi) Cost of tax compliance
• D. Controls of the movement of capital and people
(i) Foreign ownership/investment restrictions
(iii) Freedom of foreigners to visit
8
What’s the difference between the two Indices?
9
1. Gov transfers and subsidies increased due to gas cutoffsGov does not invest in the economyTop marginal tax rate is meaningless; & cost of compliance missing
2. Been the same in every category which is strange
3. Money growth improved slightly while inflation worsened. But Jordan’s inflation is not only related to money growth
20122004-2008Domestic Credit
8%21%Resident
-12%17%Non-resident
(588-1591) 171%17%Government
Major Indicators of the Economic Freedom of the Arab World
10
4. Virtually the same; however, trade in Jordan is not free
5. Slightly decreased, ownership of banks is a perfect score??, interest rate controls are perfect also???Starting a business is the same
Major Indicators of the Economic Freedom of the Arab World
GDP Growth Rate and Government Spending, % of the GDP 1980-2013
19.01
4.71
7.39
1.99
8.64
3.46
7.01
2.9
-1.85
-13.45
0.971.82
18.67
4.63 4.986.18
2.093.29 3 3.41
4.245.27 5.79
4.16
8.56 8.14 8.12 8.187.23
5.48
2.34 2.56 2.65 2.83
0
5
10
15
20
25
30
35
-20
-15
-10
-5
0
5
10
15
20
251
98
0
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
2 3 4 5
GDP Growth Rate (%) Government spending as a % of the GDP
• Spikes due to regional occurrences• In a some periods Government Spending is (counter-cyclical)• In many periods Government Spending is pro-cyclical, which is bad for the economy• In periods, Government Spending did not affect the GDP Growth, particularly 2010-
2013
11
127.8
124.4
131.9
105.4
190.1
158.6
310.4
289.1232.7
246.8
181.9
122.313.9
5.3
50.5
73.9
40.8
331.2355.6
223.6
203.8
224.3
275.9
161.4
222
477.8
443.5
614.5
692.7
1449.7
1045.2
1382.8
1823.6
1307.2
0
200
400
600
800
1000
1200
1400
1600
1800
2000
-20
-15
-10
-5
0
5
10
15
20
251
98
0
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
1 2 3 4 5 6
GDP Growth Rate and Budget Deficit 1980-2013
12
GDP Growth Rate and Public Debt 1980-2013
13
0
5000
10000
15000
20000
25000
-50
0
50
100
150
200
250
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
1 2 3 4 5 6
GDP Growth Public Debt as a % of the GDP Public Debt
Conclusion
Yes, according to the ranking Jordan is number 1 in the region.
However, if certain factors are accounted for:
• Taxes and fees,
• Creative accounting,
• Budgeting methodology, and
• Type/quality of government spending….
Jordan may not be
Thank you
14
