High-Level Bi-Regional Webinar
Wednesday, January 27, 2021
The IMF-Middle East Center for Economics and Finance (IMF-CEF) in Kuwait, and the Africa Training Institute (IMF-ATI) in Mauritius, held today a high-level bi-regional webinar on “The Impact of the COVID-19 Pandemic and Commodity Price Shock: The Way Forward for Africa and the Middle East”.
The webinar was moderated by His Excellency Mr. Yousef Al-Ebraheem, Kuwait Emir Court’s Economic Advisor. Mr. Rabah Arezki, Vice President and Chief Economist, African Development Bank, kicked off the panel with a presentation on the challenges faced by both regions and the way forward, followed by discussions with eminent panelists including (by alphabetical order) Mr. Athanasios Arvanitis, Deputy Director, IMF’s Middle East and Central Asia Department; His Excellency Mr. Ibrahim Elbadawi, Managing Director, Economic Research Forum; Mr. Nikolay Gueorguiev, Division Chief, IMF’s Fiscal Affairs Department; His Excellency Mr. Jose de Lima Massano, Governor, Banco Nacional de Angola; His Excellency Mr. Khaled Mehdi, Secretary General, Kuwait Supreme Council for Planning and Development; Ms. Catriona Purfield, Deputy Director, IMF’s African Department; and Professor James Robinson, University of Chicago.
Mr. Al-Ebraheem highlighted the novel bi-regional approach to bring to the fore common traits and differences of the two regions regarding the policy responses to the adverse twin shocks—the global COVID-19 pandemic and the fall in oil and commodity prices.
Mr. Arezki discussed success stories, including the Republic of Korea, of containing the virus and providing targeted assistance to those in need. He indicated that the COVID-19 crisis brought to light the underlying vulnerabilities of the two regions, which warrant decisive reforms. Recognizing the importance of moving to more inclusive societies, Mr. Rabah made the case that countries must simplify social safety nets by promoting a universal social protection system to replace the current fragmented systems that benefit few and exclude many. He argued that countries would need to provide Universal Basic Income (UBI) schemes and universal health systems. Mr. Arezki underscored the importance of reforms to bolster transparency, productivity, fair competition, and digitalization, which are especially important to the informal sector to gain access to services and markets. He concluded that having a more efficient and accountable public administration would put an end to the rent-seeking behavior and help spur growth in the Middle East and Africa.
Mr. Arvanitis then examined the key policy priorities for the MENA region to pave the way for more sustainable and inclusive growth. Ms. Purfield discussed the way forward for Sub-Saharan African countries, bringing to the fore ways to “build back better” once the pandemic is overcome.
Turning to concrete country cases from both regions, Mr. Mehdi and Mr. Massano shared lessons from Kuwait and Angola in addressing the COVID-19 pandemic and strategies going forward, highlighting lessons for other resource-rich countries.
Mr. Gueorguiev discussed fiscal policy responses by oil exporters to the decline in oil revenue. He highlighted the consequences of the fact that although oil prices have recovered somewhat recently, the medium-term trend seems down, demand for oil remains subdued, and overall revenue still lower relative to 2019.
Mr. Elbadawi explained that countries in the Middle East and Africa are faced with a heavy fiscal burden, which will require a prudent expenditure policy going forward. He discussed the challenges and opportunities for the two regions to graduate from subsidizing commodities to directly empowering citizens through schemes like UBI or direct cash transfers.
Professor Robinson discussed the political economy consequences of the pandemic, explaining how political considerations can constrain economic policies in the two regions.
The floor then opened for a discussion with a diverse audience from both regions, including participants from the public sector, academia, the business community, and representatives from civil society and international organizations.
In closing, Mr. Al-Ebraheem thanked the CEF and ATI for the novel bi-regional approach. “This webinar was indeed very revealing in the richness of this approach, and I look forward to more such events,” Mr. Al-Ebraheem told the audience.
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