The asymmetric effects of twenty years of tariff reforms on Egyptian workers

Giorgia Giovannetti , Enrico Marvasi , Arianna Vivoli

After more than two decades of trade liberalisation, faced with deep structural problems, which were exacerbated by the 2008 financial crisis and culminated in the 2011 Spring Revolution and change of government, in 2016 Egypt started to protect some sectors from foreign competition. This paper assesses how tariff reforms during the 1998-2018 period affected the Egyptian labour market, by focussing on real wages and job stability (i.e. having a permanent position). The empirical analysis is carried out on worker-level data from the available four waves of Egyptian Labour Market Panel Survey (ELMPS), including the recently released 2018 wave. We find that higher tariff protection tends to deteriorate labour market conditions, both lowering real wages and decreasing the probability of finding a stable job. Furthermore, tariff changes show remarkable asymmetries. There is a negative and significant correlation between tariff increases and real wages, whilst the positive impact of tariff reductions turns out to be negligible and insignificant. Our findings support the view that, in Egypt, protectionism hampered working conditions, contributing to inequality, whilst liberalisation produced minor average effects.

The Impact of COVID-19 on Emerging Markets

Rwan El-Khatib, Anis Samet

The COVID-19 pandemic is impacting global markets through unprecedented circumstances. Fears surrounding such a novel virus have led to dramatic market turbulence and massive falls in stock prices. In this paper, we explore the impact of COVID-19, in a comprehensive sample of 45 emerging countries. We track the performance of each of their markets during the outbreak, using  major stock indices and we compute the volatility using a GARCH (1,1) model. Moreover, we report conventional and Islamic bond issuances and assess investors’ perceptions towards credit risk by examining the premiums on sovereign credit default swaps. We then compare the results to the period of the global financial crisis. We find that, indeed, COVID-19 has struck the emerging countries harshly, driving sharp declines in stock market indices, causing an escalation in volatility levels, and widening the premiums on sovereign credit default swaps. However, such upheavals have  not yet reached the levels of the global financial crisis.  Finally, we examine the reactions of the IMF,  local governments and central banks in response to the crisis.

Morocco In Its Euro-Mediterranean space: Cradle of the Future

Abdelhak Azzouzi

The objective of this policy paper is to develop the idea that Europe, in its regional relations, needs two model partner countries in the South, as in the East, to act as the locomotive for other countries. In a region full of turmoil, Morocco, through its various advances, stability and reforms of all kinds, is entitled to position itself as a ‘pilot country’ and a ‘privileged partner’. Nature abhors a vacuum, the Mediterranean likewise! In addition, this hypothesis seems largely corroborated by the history of European construction. France and Germany are the two countries that have placed their cooperation under the auspices of European construction more than any others. Morocco remains an exceptional country, in terms of all its multifaceted advances, and it is entitled to position itself in the role of a ‘pilot country’ and ‘privileged partner’ and to establish itself as the only Mediterranean country with which the EU could develop a deep relationship.

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