Middle East and North Africa Economic Monitor, October 2016

Quy-Toan Do, Shantayanan Devarajan, Anne Brockmeyer, Lili Mottaghi, Clement Joubert, Kartika Bhatia and Mohamed Abdel-Jelil

No 25087, World Bank Publications - Reports from The World Bank Group

Abstract: The year 2016 appears to be one of the toughest for the Middle East and North Africa (MENA) region as their governments face serious policy challenges. The biggest challenge for oil exporters is managing their finances and diversification strategies with oil below $45 a barrel. Fiscal consolidation in a difficult sociopolitical environment and spillovers from conflicts are creating challenges for oil importers as well. Real GOP growth in MENA for 2016 is projected to fall to its lowest level since 2013 -- 2.3 percent -- lower than last year's growth by half a percentage point and about one percentage point lower than predicted in April 2016. It is clear that the disappointing performance of the MENA economies, and possibly the global economy, is partly due to the rise of terrorist attacks and spread of violent extremism. In this report, we attempt to shed light on the underlying causes of this phenomenon by applying an economic perspective to the demand for and supply of violent extremists. Looking at a dataset on foreign fighters joining Daesh, we find that the factors most strongly associated with foreign individuals' joining Daesh have to do with a lack of inclusion -- economic, social and religious -- in their country of origin. Promoting greater inclusion, therefore, could not only bring down the level of violent extremism, but it could improve economic performance in the MENA region.

Keywords: Conflict and Development-Conflict and Fragile States Macroeconomics and Economic Growth-Economic Forecasting Macroeconomics and Economic Growth-Economic Growth Macroeconomics and Economic Growth-Economic Policy; Institutions and Governance Poverty Reduction-Achieving Shared Growth (search for similar items in EconPapers)
Date: 2016
Note: ISBN 978-1-4648-0990-3
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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