Unlocking MENA and CCA Trade in a Fragmented World

Apostolos Apostolou, Fillipo Gori, Thomas Kroen, Salem Nechi and Subi Suvetha Velkumar

No 2025/267, IMF Working Papers from International Monetary Fund

Abstract: This paper investigates the impact of geoeconomic fragmentation on trade flows in the Caucasus and Central Asia (CCA) and Middle East and North Africa (MENA) regions. Amidst ongoing conflicts, security threats, the spike in global economic uncertainty, and evolving consumer sentiments, these regions face intricate challenges that necessitate agile policy responses. The analysis presents three illustrative scenarios, examining the effects of targeted trade restrictions, trade diversion, and neutral stances on exports and economic output. The findings of these illustrative scenarios highlight the critical importance of reducing trade barriers, enhancing infrastructure, and improving regulatory environments to navigate the risks and opportunities posed by geoeconomic fragmentation. These measures are essential for fostering resilience and promoting sustainable growth in the affected regions.

Keywords: Geoeconomic Fragmentation; Trade DiversionTrade Policy; Infrastructure Investment Regulatory Constraints; Caucasus and Central Asia (CCA); Middle East and North Africa(MENA); Trade Barriers; Geopolitical Uncertainties; Cca trade; Cca economy; IMF working papers; Trade pattern; Trade potential; Exports; Trade policy; Trade balance; Middle East; Central Asia; Global; North Africa; Asia and Pacific; Africa (search for similar items in EconPapers)
Pages: 25
Date: 2025-12-19
New Economics Papers: this item is included in nep-ara and nep-cis
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