World Bank & IMF Annual Spring Meeting: PITAPOLICY Consumes Information & Continues to Digest

 2012 marked the first time PITAPOLICY attended the annual World Bank and IMF meeting, held between April 17th through April 22nd, as a Political Economy Blogger–dare I say “the press.”  During PITAPOLICY’s public sector days, consuming information began with tracking the Washington Consensus’s policies for the pita-consuming region. Recently, PITAPOLICY contributed to the World Bank’s MENA Voices & Views entitled “Avoiding Groupthink on Arab World.” 

PITAPOLICY continues to digest the information but is happy to share complete analysis. PITAPOLICY had the opportunity to learn from these press briefings, events, and fora:

  • Economic Development & Prospects: Enabling Employment Miracles
  • Building Peaceful States: The New Deal
  • Political Economy of Subsidy Reform: Lessons for the MENA Region
  • Global Monitoring
  • Narrow Path for Global Economy
  • It’s All about Jobs: from Asia to Africa

Please email at info [at] pitapolicyconsulting [dot] com to request a 1 pager assessment. 

As I walked out of the IMF building on the side entrance to avoid protestors, I realized two things:

  1. I had to kick myself for not seizing the opportunity to ask the Iranian delegation how they felt about receiving praise by IMF Chief, Christine Lagarde, for serving as a model of subsidy cuts.
  2. I had to push myself to understand why economic issues morph into a game of political messaging.

As in the case of Egypt, the Popular Campaignto Drop Egypt’s Debt (PCDED) vociferously opposed an IMF loan to Egypt.  According to PDCED, the process to negotiate the loan package lacks transparency because Egypt’s Parliament, nor its Ministry of Finance, have disclosed the economic program reforms or other details of conditions.  An hour before this posting, Egypt’s interim government rejected the IMF proposal on the grounds that the spending cuts compromise subsidies that are key to maintaining social stability.

Press Briefing by the IMF Director of Middle East & Central Asia Department

Many MENA countries “responded to social pressures by increasing subsidies for oil and food, and as a result, this has put pressure on their budgets” such that their budget deficits have gone up–on average of 7.5 percent…in some countries this is even more,” opened  Masood Ahmed, IMF Director of the Middle East & Central Asia Department.  Regarding the North African countries, many of them are facing recession as oil revenues and remittances play heavily into maintaining social and economic stability.  The average growth rate for these countries is about 2.7 percent–and that is not too strong.  As a result macro-economic stability can play a role in the ongoing social and political transitions of many Arab Awakened countries, including those that have not been “awakened” just yet.

Unemployment in MENA is in the double digits.  According to figures from the International Labor Organization, MENA countries’ labor force has ballooned from 43.5 million to 72.4 million people.  To paraphrase Ahmed: the real challenge is how to transform these economies where the environment creates jobs and facilitates “inclusiveness” given that this region does not traditionally receive much foreign direct investment nor attracts much private investment. “What drives international investors also drives domestic investors,” reminded Ahmed.  Employment remains a challenge for countries in the region–whether they are directly or indirectly experiencing political and social unrest with respect to transitions occurring in Tunisia, Egypt, Libya, Yemen, Bahrain, and Syria…

One framework that helps understand where MENA countries stand is to break them down into a) oil-importing and b) oil exporting countries.  For example, the Gulf Cooperation Council countries (Oman, Saudi Arabia, Bahrain, Kuwait, and the United Arab Emirates) experiences about an 8 percent growth rate with an increase in current account surplus. Oil-exporting countries do share the singular challenge of its oil-importing counterparts: creating jobs and providing relevant skills.

Other Measures of Growth

As usual, questions from the press challenged the measure of growth–why does it always have to boil down to measuring Gross Domestic Product…why not measure with some qualitative assessment?  Civil society organizations, who also attend the World Bank seminars for the knowledge exchange portion of the meetings, also agree.  Regardless of one’s view of the Washington Consensus, it is always useful to observe and participate in order to engage and challenge.  Thus, PITAPOLICY was pleased to see the following civil society organizations from the pita-consuming region attending the fora:

  • Development Forum Foundation, Egypt
  • Egyptian Initiative for Personal Rights, Egypt
  • Lebanese Physical Handicapped Union, Lebanon
  • The Citizen Foundation, Pakistan

To put this all in context, over 28 US based organizations with MENA divisions also attended the CSO portion of the fora.  Thus, representation by MENA based civil society organizations is relatively disproportionate.

PITAPOLICY would agree with the third sector to some extent.  After all, within the third sector, a blogger is some sort of mix between press and civil society.  As a whole, the third sector contributes some sort of social capital.  (On that note: how come there is no exchange rate for tweets?  Not all tweets are incredibly useful or informative.)  In fact, PITAPOLICY would argue that tweets represent a some measure of social capital. If PITAPOLICY could gain more than just knowledge from tweets, then perhaps, there would be an incentive to revisit other issues that warrant more scrutiny–e.g. determining another measure of an economy’s growth.

 

 

 


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