Living with Debt : How Institutions Can Chart a Path to Recovery in Middle East and North Africa

Economies in the Middle East and North Africa (MENA) remain in crisis. The World Bank estimates the regional output to have contracted 3.8 percent in 2020 and expects it to rebound by only 2.2 percent in 2021. The regional output is expected to be 7.2% below where it would be in 2021 without the pan...

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Main Authors:	Gatti, Roberta, Lederman, Daniel, Nguyen, Ha M., Alturki, Sultan Abdulaziz, Fan, Rachel Yuting, Islam, Asif M., Rojas, Claudio J.
Format:	Serial
Published:	Washington, DC: World Bank 2021
Subjects:	CURRENT ACCOUNT ECONOMIC GROWTH ECONOMIC OUTLOOK EXTERNAL BALANCE FISCAL TRENDS FISCAL POLICY FISCAL BALANCE OIL EXPORTER OIL IMPORTER OIL PRICE PRODUCTIVITY CORONAVIRUS COVID-19 PANDEMIC IMPACT PANDEMIC RESPONSE INSTITUTIONS BUDGET TRANSPARENCY GOVERNANCE PUBLIC INVESTMENT MANAGEMENT PUBLIC DEBT ECONOMIC RECOVERY DEBT SUSTAINABILITY DEBT TRANSPARENCY
Online Access:	https://documents.worldbank.org/en/publication/documents-reports/documentdetail/712611617597513073/living-with-debt-how-institutions-can-chart-a-path-to-recovery-in-middle-east-and-north-africa http://hdl.handle.net/10986/35275

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spelling	okr-10986-352752022-08-01T19:41:09Z Living with Debt : How Institutions Can Chart a Path to Recovery in Middle East and North Africa Gatti, Roberta Lederman, Daniel Nguyen, Ha M. Alturki, Sultan Abdulaziz Fan, Rachel Yuting Islam, Asif M. Rojas, Claudio J. CURRENT ACCOUNT ECONOMIC GROWTH ECONOMIC OUTLOOK EXTERNAL BALANCE FISCAL TRENDS FISCAL POLICY FISCAL BALANCE OIL EXPORTER OIL IMPORTER OIL PRICE PRODUCTIVITY CORONAVIRUS COVID-19 PANDEMIC IMPACT PANDEMIC RESPONSE INSTITUTIONS BUDGET TRANSPARENCY GOVERNANCE PUBLIC INVESTMENT MANAGEMENT PUBLIC DEBT ECONOMIC RECOVERY DEBT SUSTAINABILITY DEBT TRANSPARENCY Economies in the Middle East and North Africa (MENA) remain in crisis. The World Bank estimates the regional output to have contracted 3.8 percent in 2020 and expects it to rebound by only 2.2 percent in 2021. The regional output is expected to be 7.2% below where it would be in 2021 without the pandemic. The region’s average GDP per capita is estimated to have declined 5.3 percent in 2020 and expected to rebound by only 0.6 percent in 2021. The number of poor people in the region—those making less than the $5.50 per day poverty line—is expected to increase from 176 million in 2019 to a conservative estimate of 192 million people by the end of 2021. The region’s public debt is expected to rise significantly. Most notably, MENA oil importers have the highest levels of debt. As the region copes with the economic consequences of the pandemic, most countries will face tensions between short-term needs and the long-term risks of debt-financed government spending. Countries must make tough choices along the road to recovery. During the pandemic, fiscal spending is arguably best used to support vulnerable families and invest in public health—such as disease surveillance, data transparency, and vaccinations. Public health investment as a short-term response to the pandemic could also bring long-term gains. As the pandemic subsides, there are good reasons to be cautious with additional fiscal stimulus, especially for countries with high debt, poor governance, and lack of transparency. After the pandemic, economic growth remains the most sustainable way to reduce the debt-GDP ratio, and this requires much-needed deep structural reforms. Strong institutions can chart a path to recovery. Investing in testing, disease surveillance, and data transparency can reduce the economic costs of the pandemic. As the pandemic subsides, effective and transparent pandemic surveillance would help boost demand from domestic and foreign sources. Good governance in public investment decisions can raise the effectiveness of public investment. Public debt transparency can help reduce borrowing costs. Institutional reforms can be implemented with limited fiscal costs and hold the promise of boosting long-run growth. 2021-03-16T16:05:32Z 2021-03-16T16:05:32Z 2021-04-02 Serial https://documents.worldbank.org/en/publication/documents-reports/documentdetail/712611617597513073/living-with-debt-how-institutions-can-chart-a-path-to-recovery-in-middle-east-and-north-africa 978-1-4648-1699-4 http://hdl.handle.net/10986/35275 MENA Economic Update;April 2021 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC: World Bank Publications & Research Publications & Research :: Publication Middle East and North Africa Middle East North Africa
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	CURRENT ACCOUNT ECONOMIC GROWTH ECONOMIC OUTLOOK EXTERNAL BALANCE FISCAL TRENDS FISCAL POLICY FISCAL BALANCE OIL EXPORTER OIL IMPORTER OIL PRICE PRODUCTIVITY CORONAVIRUS COVID-19 PANDEMIC IMPACT PANDEMIC RESPONSE INSTITUTIONS BUDGET TRANSPARENCY GOVERNANCE PUBLIC INVESTMENT MANAGEMENT PUBLIC DEBT ECONOMIC RECOVERY DEBT SUSTAINABILITY DEBT TRANSPARENCY
spellingShingle	CURRENT ACCOUNT ECONOMIC GROWTH ECONOMIC OUTLOOK EXTERNAL BALANCE FISCAL TRENDS FISCAL POLICY FISCAL BALANCE OIL EXPORTER OIL IMPORTER OIL PRICE PRODUCTIVITY CORONAVIRUS COVID-19 PANDEMIC IMPACT PANDEMIC RESPONSE INSTITUTIONS BUDGET TRANSPARENCY GOVERNANCE PUBLIC INVESTMENT MANAGEMENT PUBLIC DEBT ECONOMIC RECOVERY DEBT SUSTAINABILITY DEBT TRANSPARENCY Gatti, Roberta Lederman, Daniel Nguyen, Ha M. Alturki, Sultan Abdulaziz Fan, Rachel Yuting Islam, Asif M. Rojas, Claudio J. Living with Debt : How Institutions Can Chart a Path to Recovery in Middle East and North Africa
geographic_facet	Middle East and North Africa Middle East North Africa
relation	MENA Economic Update;April 2021
description	Economies in the Middle East and North Africa (MENA) remain in crisis. The World Bank estimates the regional output to have contracted 3.8 percent in 2020 and expects it to rebound by only 2.2 percent in 2021. The regional output is expected to be 7.2% below where it would be in 2021 without the pandemic. The region’s average GDP per capita is estimated to have declined 5.3 percent in 2020 and expected to rebound by only 0.6 percent in 2021. The number of poor people in the region—those making less than the $5.50 per day poverty line—is expected to increase from 176 million in 2019 to a conservative estimate of 192 million people by the end of 2021. The region’s public debt is expected to rise significantly. Most notably, MENA oil importers have the highest levels of debt. As the region copes with the economic consequences of the pandemic, most countries will face tensions between short-term needs and the long-term risks of debt-financed government spending. Countries must make tough choices along the road to recovery. During the pandemic, fiscal spending is arguably best used to support vulnerable families and invest in public health—such as disease surveillance, data transparency, and vaccinations. Public health investment as a short-term response to the pandemic could also bring long-term gains. As the pandemic subsides, there are good reasons to be cautious with additional fiscal stimulus, especially for countries with high debt, poor governance, and lack of transparency. After the pandemic, economic growth remains the most sustainable way to reduce the debt-GDP ratio, and this requires much-needed deep structural reforms. Strong institutions can chart a path to recovery. Investing in testing, disease surveillance, and data transparency can reduce the economic costs of the pandemic. As the pandemic subsides, effective and transparent pandemic surveillance would help boost demand from domestic and foreign sources. Good governance in public investment decisions can raise the effectiveness of public investment. Public debt transparency can help reduce borrowing costs. Institutional reforms can be implemented with limited fiscal costs and hold the promise of boosting long-run growth.
format	Serial
author	Gatti, Roberta Lederman, Daniel Nguyen, Ha M. Alturki, Sultan Abdulaziz Fan, Rachel Yuting Islam, Asif M. Rojas, Claudio J.
author_facet	Gatti, Roberta Lederman, Daniel Nguyen, Ha M. Alturki, Sultan Abdulaziz Fan, Rachel Yuting Islam, Asif M. Rojas, Claudio J.
author_sort	Gatti, Roberta
title	Living with Debt : How Institutions Can Chart a Path to Recovery in Middle East and North Africa
title_short	Living with Debt : How Institutions Can Chart a Path to Recovery in Middle East and North Africa
title_full	Living with Debt : How Institutions Can Chart a Path to Recovery in Middle East and North Africa
title_fullStr	Living with Debt : How Institutions Can Chart a Path to Recovery in Middle East and North Africa
title_full_unstemmed	Living with Debt : How Institutions Can Chart a Path to Recovery in Middle East and North Africa
title_sort	living with debt : how institutions can chart a path to recovery in middle east and north africa
publisher	Washington, DC: World Bank
publishDate	2021
url	https://documents.worldbank.org/en/publication/documents-reports/documentdetail/712611617597513073/living-with-debt-how-institutions-can-chart-a-path-to-recovery-in-middle-east-and-north-africa http://hdl.handle.net/10986/35275
_version_	1764482693516492800

Living with Debt : How Institutions Can Chart a Path to Recovery in Middle East and North Africa

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