On financial liberalisation in LDCs : the case of Egypt, 1960-93

This thesis deals with the issue of financial development in Egypt at the sectoral, macroeconomic and household levels over the period 1960-93. The thesis is organised in ten chapters, including a summary of the main results in chapter (10). Chapter (1) provides an introduction of the topics treated in the thesis and an overview of the main developments in the Egyptian economy during the study period. Chapter (2) reviews the theoretical literature and empirical studies on the main issues concerning financial development. Chapters (3) and (4) derive stylised facts from the discussion of the evolution of the financial system in Egypt. Chapter (3) assesses the structure, regulation and performance of the banking sector. Chapter (4) focuses on the Egyptian securities market, exploring its development since its establishment in 1883. Further it analyses the performance of the market using the main published indicators and highlights the impediments to its progress. Chapter (5) is concerned with the growing role of Islamic finance in both the formal and informal sectors in Egypt. After constructing a model to illustrate the distinctive characteristics of Islamic banking, the chapter investigates the role of Islamic banks and Islamic branches of conventional banks. The chapter also provides an analysis of the Informal Islamic Investment Companies which flourished in Egypt during the 1980s. Chapter (6) analyses the causes, measures and impact of financial repression in Egypt over the period 1960-90. The findings of this chapter indicate that financing the budget deficit was the main reason for repressing the financial sector. The chapter discusses the impact of the different repressive methods used including inflation tax, interest rate ceilings, high reserve requirements, directed credit schemes, regulation on the portfolio composition of banks, and government ownership of financial intermediaries. The government revenues from particular repressive measures such as inflation tax, seigniorage and interest rate ceilings were estimated for the whole study period and were substantial by most international standards. There follows a discussion of the main consequences of financial repression including capital flight, money substitution, the excessive use of inflation hedges and the thriving of informal financial transactions. Chapter (7) presents an econometric analysis of the impact of the real interest rate on saving, investment and economic growth in Egypt. The results of this analysis indicate that the real interest rate had a positive impact on financial saving, possibly through a portfolio shift. However its impact on total saving, investment and economic growth was insignificant. Chapters (8) and (9) are concerned with the issue of the coexistence of formal and informal financial sectors in rural Egypt. The analysis is based on a survey, of 200 households undertaken by the author in four Egyptian villages in the Nile delta. The methodology adopted and the description of the surveyed region are reported in chapter (8). The findings provided in chapter (9) suggest that informal financial transactions in our sample can be classified as intermittent. There was no evidence of the existence of professional money lenders. Loans, with very few exceptions, were interest free. Most loans were undertaken without contract or collateral. However default cases were low thanks to societal governance. Moreover the chapter analyses the characteristics of RoSCA in Egypt and its role in financial intermediation. The determinants of formal and informal borrowing are estimated using Tobit analysis. The chapter concludes with a discussion of the implications of financial liberalisation on household credit decisions. This thesis highlights the importance of a liberalised financial system for economic development in Egypt. However it argues that financial liberalisation, on its own, is not a sufficient remedy for the problems encountered in the financial sector. Macroeconomic stability and prudential regulation are considered to be essential prerequisites for liberalisation. In addition the thesis strongly emphasises the need for the restructuring of the financial system and the ensuring of its compatibility with the cultural environment to enable the full realisation of the benefits of financial liberalisation

Digital transformation and localizing the Sustainable Development Goals (SDGs)

© 2019 Elsevier B.V. This paper examines how digital transformation can impact the localization and achievement of the Sustainable Development Goals (SDGs). We collect data on the progress made towards SDGs, existing e-governance and big data initiatives, as well as the state of localization in seven countries from different parts of the world. We find that localization allows governments to effectively tailor sustainable development strategies at the local level, which can be boosted with digital transformation. Localization requires local governments’ effective planning by ensuring that budgetary allocations reflect the priorities of local communities. Our main recommendations are that adequate data are necessary to identify and follow-up with decision makers, which requires a review of institutional competence in dealing with information and data and the use of digital transformation for this purpose. Appropriate funding for development programs and projects and effective application at the local level are also important. This requires policy makers to direct and encourage investments in the ‘The Digital Network Architecture’ (DNA) infrastructure and human capital. A key limitation lies in its sample of countries used with their own cultural and population features. However, our findings provide a good basis to analyse further case studies with more heterogeneous compositions as well as other practices of digital transformation

Los ODS como marco operativo para la respuesta y recuperación post COVID-19

Despite progress on a number of goals, the world was not moving fast enough towards achieving the Sustainable Development Goals in the pre-COVID era. The Decade of Action started with the hit of the COVID-19 crisis, which stressed the urgent need to tackle the root causes of vulnerabilities. This paper explores the roles of different critical actors towards achieving the sustainable development goals (SDGs), namely national governments; local and regional governments and local communities; and the business sector as well as the interactions among these actors that facilitate the implementation of the SDGs. The paper also discusses how the SDGs provide an operational framework for building back better during the response and recovery phases from the crisis and how the COVID-19 pandemic has changed the policy scene to reimagine the roles played by the different actors. Lastly, the paper elaborates on three critical factors that would shape the degree of progress in the next decade, namely dependable data, adequate finance and effective implementation of development policies.A pesar del progreso en una serie de objetivos, el mundo no avanzaba lo suficientemente rápido hacia el logro de los Objetivos de Desarrollo Sostenible en la era anterior a COVID. La Década de Acción comenzó con el impacto de la crisis de COVID-19, que enfatizó la urgente necesidad de abordar las causas profundas de las vulnerabilidades. Este documento explora los roles de diferentes actores críticos hacia el logro de los Objetivos de Desarrollo Sostenible (ODS), a saber, los gobiernos nacionales; gobiernos locales y regionales y comunidades locales; y el sector empresarial, así como las interacciones entre estos actores que facilitan la implementación de los ODS. El documento también analiza cómo los ODS proporcionan un marco operativo para reconstruir mejor durante las fases de respuesta y recuperación de la crisis y cómo la pandemia de COVID-19 ha cambiado el escenario de las políticas para reinventar los roles desempeñados por los diferentes actores. Por último, el documento desarrolla tres factores críticos que darían forma al grado de progreso en la próxima década, a saber, datos confiables, financiamiento adecuado y la implementación efectiva de políticas de desarrollo

Beyond the Digital Dividends: Fintect and Extreme Poverty in the Middle East and Africa

This study analyzes the impact of the proliferation of Financial Technology (FinTech) on the achievability of the Sustainable Development Goals (SDGs) with respect to extreme poverty by 2030. The study uses system General Method of Moments (GMM) dynamic panel estimation methodology on annual data for 12 MENA and 45 SSA countries in addition to 70 emerging markets and developing economies from outside the two regions over the period from 2004 until the latest available data in 2018. Three different measures characterize FinTech adoption: the number of mobile cellular subscriptions per 100 people, the number of fixed broadband subscriptions per 100 people, the percentage of people in the population who use the internet. The preliminary results of the study indicate that FinTech measures have a positive statistically significant impact on reducing extreme poverty for the full sample as well as the MENA and the SSA regions. The second part of the study employs a gap analysis against four poverty targets — United Nations’ 0%, World Bank’s 5%, and two intermediaries of 1.5% and 3% to capture all possibilities. The results of the gap analysis suggest that the situation in the MENA region is more promising than the SSA region where improvements in FinTech along will bring extreme poverty below 5% in all MENA countries with the exception of Yemen and Djibouti. For the SSA region, only 4 out of the 45 countries; Gabon, Cabo Verde, Seychelles, and Mauritius are able to close the extreme poverty target of 5%. The paper concludes that poverty alleviation goes beyond digital dividends and identifies human capital accumulation and improvement in governance as the prerequisites for realizing the potential of FinTech and its contribution to the efforts of eradicating extreme poverty within a policy framework to achieve the SDGs in both the MENA and SSA regions

The SDGs as an Operational Framework for Post COVID-19 Response and Recovery

Despite progress on a number of goals, the world was not moving fast enough towards achieving the Sustainable Development Goals in the pre-COVID era. The Decade of Action started with the hit of the COVID-19 crisis, which stressed the urgent need to tack

The role of Islamic finance in enhancing financial inclusion in organization of Islamic cooperation (OIC) countries

The core principles of Islam lay great emphasis on social justice, inclusion, and sharing of resources between the haves and the have nots. Islamic finance addresses the issue of"financial inclusion"or"access to finance"from two directions -- one through promoting risk-sharing contracts that provide a viable alternative to conventional debt-based financing, and the other through specific instruments of redistribution of the wealth among the society. Use of risk-sharing financing instruments can offer Shariah-compliant microfinance, financing for small and medium enterprises, and micro-insurance to enhance access to finance. And redistributive instruments such as Zakah, Sadaqat, Waqf, and Qard-al-hassan complement risk-sharing instruments to target the poor sector of society to offer a comprehensive approach to eradicating poverty and to build a healthy and vibrant economy. Instruments offered by Islam have strong historical roots and have been applied throughout history in various Muslim communities. The paper identifies gaps currently existing in Organisation of Islamic Cooperation (OIC) countries on each front, that is, Shariah-compliant micro-finance and financing for small and medium enterprises and the state of traditional redistributive instruments. The paper concludes that Islam offers a rich set of instruments and unconventional approaches, which, if implemented in true spirit, can lead to reduced poverty and inequality in Muslim countries plagued by massive poverty. Therefore, policy makers in Muslim countries who are serious about enhancing access to finance or"financial inclusion"should exploit the potential of Islamic instruments to achieve this goal and focus on improving the regulatory and financial infrastructure to promote an enabling environment.Access to Finance,Debt Markets,Banks&Banking Reform,Emerging Markets,Islamic Finance

The SDGs as an Operational Framework for Post COVID-19 Response and Recovery

Despite progress on a number of goals, the world was not moving fast enough towards achieving the Sustainable Development Goals in the pre-COVID era. The Decade of Action started with the hit of the COVID-19 crisis, which stressed the urgent need to tackle the root causes of vulnerabilities. This paper explores the roles of different critical actors towards achieving the sustainable development goals (SDGs), namely national governments; local and regional governments and local communities; and the business sector as well as the interactions among these actors that facilitate the implementation of the SDGs. The paper also discusses how the SDGs provide an operational framework for building back better during the response and recovery phases from the crisis and how the COVID-19 pandemic has changed the policy scene to reimagine the roles played by the different actors. Lastly, the paper elaborates on three critical factors that would shape the degree of progress in the next decade, namely dependable data, adequate finance and effective implementation of development policies.A pesar del progreso en una serie de objetivos, el mundo no avanzaba lo suficientemente rápido hacia el logro de los Objetivos de Desarrollo Sostenible en la era anterior a COVID. La Década de Acción comenzó con el impacto de la crisis de COVID-19, que enfatizó la urgente necesidad de abordar las causas profundas de las vulnerabilidades. Este documento explora los roles de diferentes actores críticos hacia el logro de los Objetivos de Desarrollo Sostenible (ODS), a saber, los gobiernos nacionales; gobiernos locales y regionales y comunidades locales; y el sector empresarial, así como las interacciones entre estos actores que facilitan la implementación de los ODS. El documento también analiza cómo los ODS proporcionan un marco operativo para reconstruir mejor durante las fases de respuesta y recuperación de la crisis y cómo la pandemia de COVID-19 ha cambiado el escenario de las políticas para reinventar los roles desempeñados por los diferentes actores. Por último, el documento desarrolla tres factores críticos que darían forma al grado de progreso en la próxima década, a saber, datos confiables, financiamiento adecuado y la implementación efectiva de políticas de desarrollo

Liberalising trade in financial Services: the Uruguay Round and the Arab countries

As a result of the Uruguay Round, members of the World Trade Organization (WTO) are committed to initiating gradual liberalization in their service sectors, i.e., to opening their markets to foreign service suppliers. The purpose of this paper is to examine the prospects and problems of trade liberalization in financial services in the Arab countries. The paper draws on the theoretical contributions outlining the case for financial liberalization in developing countries. It reviews the recent performance, structure and regulation of the banking systems in some Arab countries. The main conclusion is that Arab countries do not meet the prerequisites for successful financial liberalization. There is a clear need for internal reform of the financial systems first before opening up to external competition