Policymakers in the Middle East and North Africa’s emerging markets are confronted with two pressing questions. The first is how to prepare their economies for an even more challenging year ahead, with an increasingly gloomy and uncertain global outlook. The second is asking what policies and reforms can they implement to help mitigate the impact on their populations at a time when their policy space has shrunk to its lowest levels, following multiple shocks, and when economic conditions could take a turn for the worse.
Mena emerging markets have shown resilience this year despite the headwinds from Russia’s war in Ukraine. Industrial production is up, employment is rising and the tourism sector is experiencing a revival following the pandemic. Nonetheless, as in other parts of the world, these countries are enduring a strong terms-of-trade shock and high inflation. Inflation is up by almost 50 per cent compared to 2021 levels and is forecast to remain in the double digits through next year. Moreover, the tightening of global financial conditions has already impacted sovereign spreads and countries’ ability to access international markets.
However, the deterioration of next year’s outlook and the accumulation of downside risks require strong and timely policy actions.
First, commodity prices are expected to stay high and volatile, raising the pressure on central banks to bring inflation under control and governments to tackle heightened food insecurity risks. In some countries, where monetary policy transmission is weak, this may require large increases in policy rates that could risk tipping some into a recession.
Second, the era of widely available and affordable external financing is coming to an end and room for policy manoeuvre is narrowing rapidly. About twice as much external public debt falls due each year on average in 2022 and 2023 as in 2019 for the region’s emerging markets. At the same time, significantly tighter global financial conditions are drying up external financing sources for these countries, raising the risk of a funding crunch.
The deterioration of next year’s outlook and the accumulation of downside risks require strong and timely policy actions
Third, what are the prospects for containing debt pressures in the region’s emerging markets when debt in terms of a percentage of GDP at the end of 2021 was already about 10 per cent higher than pre-pandemic levels and when average sovereign bond spreads (excluding Lebanon) were over 600 basis points above levels in the two years before the pandemic? With growth slowing and debt service costs rising, prospects for stabilizing debt are set to worsen.
In addition, countries’ ability to provide adequate social protection may also be constrained by higher debt service costs at a time when needs are high. Combined with a yet-unfinished energy subsidy reform in the region, there is no room to increase the current envelope for social spending to address rising social needs, which may strain social cohesion.
So how can policymakers prepare for the challenging years ahead and protect their populations?
Restoring price stability while protecting the vulnerable is the most urgent policy priority. Monetary policy will need further tightening where inflation is becoming broad-based and expectations are rising. Meanwhile, a tighter fiscal stance that includes targeted support to those in need will contribute to disinflation while strengthening social cohesion.
Countries must also act quickly to prevent a food crisis. Harvests next year and beyond could suffer if farmers do not have access to affordable fertilisers. Now is the time to scale up production, secure access to fertilisers for farmers and rebuild food reserves. Looking forward, investing in climate-resilient agriculture will help buffer countries from future climate-related shocks.
To maintain debt sustainability and build resilience, policymakers should accelerate inclusive fiscal consolidation, including by completing energy subsidy reforms while building stronger social safety nets and investing in energy efficiency. Doing so will also reduce fiscal pressures while effectively providing support to the vulnerable and easing energy dependency.
Authorities would also be well served to make meaningful improvements to the credibility and effectiveness of their policy frameworks. For monetary policy, this means strengthening central bank autonomy and increasing the transparency of monetary operations and foreign-exchange interventions. On the fiscal side, robust medium-term frameworks can bolster confidence, free up fiscal resources and strengthen fiscal sustainability. Greater transparency and accountability can improve efficiency and reduce the fiscal costs and risks associated with state-owned enterprises.
With financial stability risks set to rise as shocks continue to batter the region’s emerging markets, policymakers will also need to strengthen their macroprudential policy frameworks to improve financial sector resilience.
Finally, accelerating structural reforms has become even more urgent to mitigate potential adverse effects on growth and bolster productivity. Priorities include removing barriers to private firms, enacting reforms that reduce informality and improve tax equity, and investing in climate-resilient technology and infrastructure.
The outlook calls for audacious measures, but countries do not need to deal with these challenges alone. The IMF is a partner that stands ready to help. There is no time for complacency. Long-standing reforms are needed now.
Dubai World Cup factbox
Most wins by a trainer: Godolphin’s Saeed bin Suroor(9)
Most wins by a jockey: Jerry Bailey(4)
Most wins by an owner: Godolphin(9)
Most wins by a horse: Godolphin’s Thunder Snow(2)
Biography
Favourite Meal: Chicken Caesar salad
Hobbies: Travelling, going to the gym
Inspiration: Father, who was a captain in the UAE army
Favourite read: Rich Dad Poor Dad by Robert Kiyosaki and Sharon Lechter
Favourite film: The Founder, about the establishment of McDonald's
Best Foreign Language Film nominees
Capernaum (Lebanon)
Cold War (Poland)
Never Look Away (Germany)
Roma (Mexico)
Shoplifters (Japan)
Other acts on the Jazz Garden bill
Sharrie Williams
The American singer is hugely respected in blues circles due to her passionate vocals and songwriting. Born and raised in Michigan, Williams began recording and touring as a teenage gospel singer. Her career took off with the blues band The Wiseguys. Such was the acclaim of their live shows that they toured throughout Europe and in Africa. As a solo artist, Williams has also collaborated with the likes of the late Dizzy Gillespie, Van Morrison and Mavis Staples.
Lin Rountree
An accomplished smooth jazz artist who blends his chilled approach with R‘n’B. Trained at the Duke Ellington School of the Arts in Washington, DC, Rountree formed his own band in 2004. He has also recorded with the likes of Kem, Dwele and Conya Doss. He comes to Dubai on the back of his new single Pass The Groove, from his forthcoming 2018 album Stronger Still, which may follow his five previous solo albums in cracking the top 10 of the US jazz charts.
Anita Williams
Dubai-based singer Anita Williams will open the night with a set of covers and swing, jazz and blues standards that made her an in-demand singer across the emirate. The Irish singer has been performing in Dubai since 2008 at venues such as MusicHall and Voda Bar. Her Jazz Garden appearance is career highlight as she will use the event to perform the original song Big Blue Eyes, the single from her debut solo album, due for release soon.
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
Australia tour of Pakistan
March 4-8: First Test, Rawalpindi
March 12-16: Second Test, Karachi
March 21-25: Third Test, Lahore
March 29: First ODI, Rawalpindi
March 31: Second ODI, Rawalpindi
April 2: Third ODI, Rawalpindi
April 5: T20I, Rawalpindi
Manikarnika: The Queen of Jhansi
Director: Kangana Ranaut, Krish Jagarlamudi
Producer: Zee Studios, Kamal Jain
Cast: Kangana Ranaut, Ankita Lokhande, Danny Denzongpa, Atul Kulkarni
Rating: 2.5/5
UAE squad
Esha Oza (captain), Al Maseera Jahangir, Emily Thomas, Heena Hotchandani, Indhuja Nandakumar, Katie Thompson, Lavanya Keny, Mehak Thakur, Michelle Botha, Rinitha Rajith, Samaira Dharnidharka, Siya Gokhale, Sashikala Silva, Suraksha Kotte, Theertha Satish (wicketkeeper) Udeni Kuruppuarachchige, Vaishnave Mahesh.
UAE tour of Zimbabwe
All matches in Bulawayo
Friday, Sept 26 – First ODI
Sunday, Sept 28 – Second ODI
Tuesday, Sept 30 – Third ODI
Thursday, Oct 2 – Fourth ODI
Sunday, Oct 5 – First T20I
Monday, Oct 6 – Second T20I
UAE currency: the story behind the money in your pockets
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
Buy farm-fresh food
The UAE is stepping up its game when it comes to platforms for local farms to show off and sell their produce.
In Dubai, visit Emirati Farmers Souq at The Pointe every Saturday from 8am to 2pm, which has produce from Al Ammar Farm, Omar Al Katri Farm, Hikarivege Vegetables, Rashed Farms and Al Khaleej Honey Trading, among others.
In Sharjah, the Aljada residential community will launch a new outdoor farmers’ market every Friday starting this weekend. Manbat will be held from 3pm to 8pm, and will host 30 farmers, local home-grown entrepreneurs and food stalls from the teams behind Badia Farms; Emirates Hydroponics Farms; Modern Organic Farm; Revolution Real; Astraea Farms; and Al Khaleej Food.
In Abu Dhabi, order farm produce from Food Crowd, an online grocery platform that supplies fresh and organic ingredients directly from farms such as Emirates Bio Farm, TFC, Armela Farms and mother company Al Dahra.
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UAE currency: the story behind the money in your pockets
TEACHERS' PAY - WHAT YOU NEED TO KNOW
Pay varies significantly depending on the school, its rating and the curriculum. Here's a rough guide as of January 2021:
- top end schools tend to pay Dh16,000-17,000 a month - plus a monthly housing allowance of up to Dh6,000. These tend to be British curriculum schools rated 'outstanding' or 'very good', followed by American schools
- average salary across curriculums and skill levels is about Dh10,000, recruiters say
- it is becoming more common for schools to provide accommodation, sometimes in an apartment block with other teachers, rather than hand teachers a cash housing allowance
- some strong performing schools have cut back on salaries since the pandemic began, sometimes offering Dh16,000 including the housing allowance, which reflects the slump in rental costs, and sheer demand for jobs
- maths and science teachers are most in demand and some schools will pay up to Dh3,000 more than other teachers in recognition of their technical skills
- at the other end of the market, teachers in some Indian schools, where fees are lower and competition among applicants is intense, can be paid as low as Dh3,000 per month
- in Indian schools, it has also become common for teachers to share residential accommodation, living in a block with colleagues
COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
The%20specs
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