WHAT IS TO BE BLAMED FOR ECONOMIC STAGNATION IN ARAB WORLD? A. Illarionov, Cato Institute, Institute of Economic Analysis 2nd Economic Freedom of the Arab World Conference Dead Sea, Jordan, November 23, 2007 © Cato Institute, Institute of Economic Analysis

© IEA Is there any economic stagnation in the Arab World?

© IEA GDP per capita in Jordan as % of core of Western Europe (12 countries), 1820–2006. Sources: Angus Maddison, 2006; IEA.

© IEA GDP per capita in 8 Arab countries (Jordan, Iraq, Syria, Lebanon, Palestine, Egypt, Tunisia, Morocco) as % of World average, 1820–2006. Sources: Angus Maddison, 2006; IEA.

© IEA GDP per capita in 17 Arab countries as % of World average, 1950–2006. Source: IEA.

© IEA There is an economic stagnation in the Arab World. Arab countries are lagging behind the West and the World. Why?

© IEA Existing theories. Because of: - Religion (Islam)? - Ethnicity (Arab nation)? - Natural resources (oil)? - Something else?

© IEA What is to be blamed? Islam?

© IEA GDP per capita in Islamic countries as % of World average, 1950–2006. Source: IEA.

© IEA GDP per capita in non-Arab Islamic countries as % of World average, 1950–2006. Source: IEA.

© IEA GDP per capita in Arab countries as % of All Islamic countries, 1950–2006. Source: IEA.

© IEA GDP per capita in Arab countries as % of non-Arab Islamic countries, 1950–2006. Source: IEA.

© IEA What is to be blamed? Arab ethnicity?

© IEA GDP per capita in Egypt as % of USA, 1000–2006. Sources: Angus Maddison, 2006; IEA.

© IEA GDP per capita in 3 Arab countries (Egypt, Iraq and Morocco) as % of Western Europe, 1000–2006. Sources: Angus Maddison, 2006; IEA.

© IEA What is to be blamed? Oil?

© IEA GDP per capita in Arab countries as % of the World average jumped from 66% in 1950 to 95% in 1980 just to fall again to 66% in 2006.

© IEA Relation between oil prices and GDP per capita especially pronounced in the Arab oil countries. Though impact of oil prices is weakening. GDP per capita fell from 101% in 1950 and 219% in 1979 to 89% in Oil price in constant 2000 US$ and GDP per capita in Arab oil countries as % of World average,

© IEA GDP per capita in non-oil Arab countries as % of the World average over the last 30 years was effectively flat – at level between 16 and 19%.

© IEA Economic Freedom Index in Arab non-oil countries as % World average in the last 30 years was effectively flat, 1975–2005. Sources: Fraser Institute, 2007; IEA.

© IEA Economic freedom and economic growth in Egypt, EFI and GDP per capita as % of World average,

© IEA Economic freedom and economic growth in Tunisia, EFI and GDP per capita as % of World average,

© IEA Economic freedom and economic growth in Syria, EFI and GDP per capita as % of World average,

© IEA Economic freedom and economic growth in Algeria, EFI and GDP per capita as % of World average,

© IEA What is to be blamed for economic stagnation in the Arab World? Lagging behind in Economic Freedom and lack in its progress!

WHAT IS TO BE BLAMED FOR ECONOMIC STAGNATION IN ARAB WORLD? A. Illarionov, Cato Institute, Institute of Economic Analysis 2nd Economic Freedom of the Arab World Conference Dead Sea, Jordan, November 23, 2007 © Cato Institute, Institute of Economic Analysis