Publications

At the webinar organized on 17 February 2022 at the EU-Africa week, the first edition in the run-up of the 6th EU-African Union Summit, we are reengaging with African-European dialogue from a different vantage point: we want Africa to take the lead in setting forth a new kind of conversation that is truly transformational and inclusive with a focus on culture, creativity and entrepreneurship.

Event video: https://www.youtube.com/watch?v=xbeBMSPYJu8

Financial inclusion (FI) has been high on the agenda of international institutions, regulators and policymakers for a number of years and remains a priority. This is mainly due to its well documented positive impact in fostering sustainable social and economic development. However, developing economies, particularly countries in the South and East Mediterranean, are still lagging behind in terms of FI, both on individual and business levels. Additionally, the region exhibits a significant gender gap, urban-rural gap, and a low level of access to financial services for young people.

This study provides an in-depth analysis of the state of FI in five countries in the South and East Mediterranean: Egypt, Jordan, Lebanon, Morocco and Tunisia. The analysis is based on a survey conducted by the Euro-Mediterranean Network for Economic Studies (EMNES) researchers using interviews, literature research and secondary data. The main aim is to investigate the salient features of FI, the barriers to achieving FI, and the regulatory framework and policies used to promote FI in each country.

The research team is led by Prof. Rym Ayadi, President, EMEA and Director, EMNES. It includes Sandra Challita, research fellow , EMEA and researcher, EMNES and Mais Shaban research fellow at EMEA and EMNES. Country contributions were provided from EMNES researchers: Alia El Mahdi, Taghreed Hassouba, Egypt, Nooh Alshyab, Serena Sandri, Dima Daradkeh, Jordan , Sandra Challita, Lebanon, Najat El Mekkaoui, Yeganeh Forouheshfar, Sara Loukili, Morocco, Olfa Benouda, Soumaya Ben Khelifa, Dorra Hmaied, Rania Makni, Tunisia.

Read the webinar report

Several emerging economies have embarked on structural adjustment reform programmes to rectify economic imbalances. Most of these programmes have focussed more on short term oriented stabilisation reforms, which reduce the output gap. Yet longer-term structural policies can boost economic growth through shifting the potential GDP. This paper contributes to the literature in three ways. First, we contrast the effects of stabilisation and allocation policies and to what extent they complement or substitute each other. To do so, we run several alternative scenarios related to stabilisation policies (currency devaluation, subsidy removal and VAT tax) and others related to allocation policies (public spending on education and health and improving the competition policy). Second, we analyse how the effects of such policies can differ in the short and long term and with different market structures (perfect vs. imperfect competition). Third, using a recent social accounting matrix (SAM) of 2014/2015, we develop a CGE model for an economy, Egypt, that is under-researched in the CGE literature and that was subject to a recent reform programme developed with the IMF. Our main findings show that stabilisation reforms reduce economic growth by 2.5% in the short run. Yet they positively affect it over time, especially if they are accompanied by structural reforms. Indeed, the latter increase economic growth (of 8.6% in the long run). Furthermore, from a social perspective, stabilisation reform deteriorates household welfare in the short run, especially in urban areas. Finally, we find that negative effects of stabilisation and structural reforms are more pronounced under imperfect competition, pointing to the importance of an effective competition policy.