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Middle East and North Africa

Does Your Country Export What It Should?

Siddhesh Kaushik's picture

Customs reforms have made trade easier in Georgia. Photo - Irakli Tabagari / World Bank.One of the core principles of trade economics is that of “comparative advantage.” First described by David Ricardo, the theory says that countries are best off if they specialize in products that they can make relatively more efficiently – with lower opportunity cost – than other countries. If this happens, the theory goes, global welfare will increase. This concept is more difficult than it sounds, however – as Paul Krugman has pointed out quite eloquently – and benefits from illustration.

Basketball genius Michael Jordan stars in one example sometimes used in textbooks and classrooms: If Jordan mows his lawn faster than anyone else in the neighborhood, he has an absolute advantage in lawn mowing. But that doesn’t mean that he should mow his neighbor John Smith’s lawn, because that would come at an opportunity cost: in the same two hours it would take Jordan to cut the grass, he could earn much more by playing basketball or making a commercial.

While it is difficult to measure comparative advantage in world trade, one indicator is something called “Revealed Comparative Advantage” (RCA). This is a measure of how a country’s exports compare to those of a bigger group, such as a region or the rest of the world. For example, if a country’s RCA in wheat is high (typically greater than one), that means wheat makes up a higher share of that country’s total exports than it does of the world’s exports. This suggests that that country is a more efficient wheat-producer than the average country.

But countries don’t always produce the products in which they have a revealed comparative advantage. Sometimes Michael Jordan mows the lawn. Let’s take a look at a couple of examples from this new data visualization tool.

Five Reasons Why Youth Should Choose Agriculture

Andy Shuai Liu's picture
What type of career do you aspire to have? Do you want to be an artist, a business person, or a policymaker?
 
Or, have you ever wanted to become a farmer? I would not be surprised if you said no.
 

Transitional Justice in Tunisia Expanded to Include Economic Crimes

Amine Ghali's picture
Tunis

More than three years after the wave of revolutions that swept some countries of the Arab region, it is now possible to step back and make an initial assessment of the subsequent transformation processes. While the picture seems bleak overall, the prospects for Tunisia’s democratic transition, at the very least, offers some cause for hope. Among the many features of the Tunisian transition, one of the most significant is the country’s commitment to a process of a transitional justice (TJ). The process took three years to materialize, and required a joint effort on the part of many actors, ranging from national organizations to the international community, along with politicians and legal professionals.

Strengthening Local Governments in Tunisia

Jaafar Sadok Friaa's picture
Video

Decentralization in Tunisia means empowering local government. A new World Bank project aims to build the capacity of local government and make it accountable. Jaafar Friaa, Team Leader for the Program discusses the project's goals.

What Will the Trade Facilitation Agreement Mean for the Aid for Trade Agenda? New e-Book Provides Answers

Jaime de Melo's picture

The world’s 45 Least Developed Countries that are not oil producers (non-oil LDCs) are exporting less and less in the global market place. Between 1985 and 2012, the world market share of non-oil LDCs’ exports of goods and services fell from 1.2 percent to 0.8 percent—all while their share in world population rose from 7.5 percent to 9.9 percent.

The 2005 Aid for Trade (AFT) initiative was designed to arrest this decline. Yet, LDCs’ trade costs continue to fall less rapidly than those of their competitors.

Clearly, it’s time to re-evaluate the AFT initiative.

A new e-book does just that, and, contrary to what some may think, concludes that the initiative has been beneficial. But due to a collective failure to clearly articulate its results, the achievements of the AFT initiative are now at risk as development budgets come under increasing pressure.

The Algeria That Wins

Emmanuel Noubissie Ngankam's picture


His achievements may have attracted less attention than the brilliant performance of the Fennecs (“desert foxes”)—the Algerian football team which made it into the round of sixteen at the World Cup in Brazil—but they deserve to be revisited nonetheless. His accomplishments are not included in the records’ book, nor can they be reduced to an act of revenge against France, Algeria’s former colonizer: they are about the kind of success that only globalization holds the key to. 

Towards democracy: Tunisia’s race against time

Christine Petré's picture
 
Tunis

Tunisia finalizes voter registration ahead of this year’s elections
 
The birthplace of the Arab Spring is sometimes described as the only democratic nation in the region of the Middle East and North Africa. In order to retain this distinction and uphold its new constitution, however, a legitimate voting process needs to be held this year. 

Education as if Economics Mattered

Shanta Devarajan's picture

Children outside school. Bangladesh Education in developing countries is facing problems at all levels:

At the primary level, despite gains in enrollment, the quality is appallingly low.  In Tanzania and India, some 20-30 percent of students in 6th grade could not read at the 2nd grade level. Not surprising since in these countries, teachers in public primary schools are absent 25 percent of the time.  When present, they are in-class teaching only 20 percent of the time.

At the secondary level, the performance of students from the Middle East and North Africa  in international tests such as TIMS is significantly below the developing country average.

At the tertiary level, universities are chronically underfunded and not training students for jobs that the market is demanding - reminiscent of the Woody Allen line, "The food in this restaurant is terrible and the portions are too small."

Smart Cities in North Africa: A Localized Debate about a Global Trend

Mehrunisa Qayyum's picture
 Arne Hoel l World Bank

Walking past the Check-in counter in Casablanca’s Mohamed V International Airport, a digital sign claims X amount of solar energy used and X amount of energy savings occurred in powering a transit hub with the use of polycrystalline panel technology.  As a tourist, this may come as a pleasant surprise if she has not yet had the opportunity to see other improvements, like Rabat’s tram system.  As a citizen, this may be inspiring as the term “smart city” hints at better infrastructure and technology use.  However, what qualifies a city as a “smart city” is more often a topic for discussion only among Maghreb countries and not implementation.  

More money needed to help Lebanon educate Syrian refugees and vulnerable students

Noah Yarrow's picture
 Noah Yarrow
 
The teacher held up an index card, asking the students to identify the letter and its sound. Hands shot into the air as the teacher skillfully guided their recognition of the way the letter looked at the beginning, middle and end of a word, a particular characteristic of written Arabic. 

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