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THE ARAB MONETARY FUND ISSUES THE TWENTIETH ISSUE OF A POLICY BRIEF SERIES ENTITLED "TOWARDS A NEW SOCIAL CONTRACT IN THE ARAB COUNTRIES: THE ROLE OF PUBLIC FINANCE" DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

THE ARAB MONETARY FUND ISSUES THE TWENTIETH ISSUE OF A POLICY BRIEF SERIES ENTITLED "TOWARDS A NEW SOCIAL CONTRACT IN THE ARAB COUNTRIES: THE ROLE OF PUBLIC FINANCE"

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THE ARAB MONETARY FUND ISSUES THE TWENTIETH ISSUE OF A POLICY BRIEF SERIES ENTITLED "TOWARDS A NEW SOCIAL CONTRACT IN THE ARAB COUNTRIES: THE ROLE OF PUBLIC FINANCE" Empty THE ARAB MONETARY FUND ISSUES THE TWENTIETH ISSUE OF A POLICY BRIEF SERIES ENTITLED "TOWARDS A NEW SOCIAL CONTRACT IN THE ARAB COUNTRIES: THE ROLE OF PUBLIC FINANCE"

Post by claud39 Tue Jun 15, 2021 5:52 pm

THE ARAB MONETARY FUND ISSUES THE TWENTIETH ISSUE OF A POLICY BRIEF SERIES ENTITLED "TOWARDS A NEW SOCIAL CONTRACT IN THE ARAB COUNTRIES: THE ROLE OF PUBLIC FINANCE"




 2021-06-14


THE ARAB MONETARY FUND ISSUES THE TWENTIETH ISSUE OF A POLICY BRIEF SERIES ENTITLED "TOWARDS A NEW SOCIAL CONTRACT IN THE ARAB COUNTRIES: THE ROLE OF PUBLIC FINANCE" Logo-ar




The dynamism of the goals of the social contract is a necessity to keep pace with the role of the state for the aspirations of the peoples
The COVID-19 pandemic has forced governments to shift to a new social contract focused on protecting jobs, ensuring social justice, reducing inequalities, and supporting sustainable recovery
In light of the new social contract, Arab governments adopted stimulus packages amounting to $281 billion, 49 percent of which were borne by public budgets, with the aim of supporting families and individuals and enhancing the resilience and dynamism of Arab economies.
Strengthening communication mechanisms and increasing community participation is a necessity to ensure citizens’ support for state institutions in their pursuit of the goals of the new social contract
Involving the private sector in achieving national goals within the framework of social responsibility would achieve social cohesion, increase the credibility of the social contract and reduce pressures on public budgets.
Fiscal discipline and financial sustainability are an essential pillar to enhance the ability of public finance to mobilize resources to meet the entitlements of the new social contract

 
As part of its keenness to develop its research activities, the Arab Monetary Fund issued the twentieth issue of a policy brief series entitled "Towards a New Social Contract in the Arab Countries: The Role of Public Finance". The summary indicated that the role of the state has witnessed over the past centuries many transformations in line with the nature of economic and social changes and the prevailing economic thought in each era. In this context, the summary indicated that talking about the role of the state in economic activity focuses mainly on mechanisms to rationalize the role of the state and improve its performance, not discussing the importance of the state's role in economic life or not. Therefore, what should be focused on is the optimal form of state intervention in economic life.

This relationship that binds and combines the state and the citizen, the thinkers used to call it what is known as the " Social Contract" . The state, according to this contract, is required to work to meet some of the social and economic entitlements of its citizens, which differ from one era to another and from one country to another. The summary indicated that despite the multiplicity and divergence of the goals of the social contract among the countries of the world, the idea of ​​the social contract has witnessed a tangible transformation in the wake of the spread of the Covid-19 pandemic during the years 2020 and 2021, as the pandemic reconsidered the role of the state in general.

In light of the unprecedented loss of job opportunities, which, according to ILO estimates, amounted to about 225 million full-time jobs in 2020, the increase in the number of people below the poverty line by about 130 million during the past year, and the world’s loss of decades of human development gains as a result of the recorded decline in levels of education health and incomes, and increasing levels of inequality of all kinds, especially in light of the impact on the livelihoods of an estimated 1.3 billion workers, representing nearly half of the world’s workforce, the governments of the world’s countries tended to adopt huge financial and monetary packages to maintain jobs and support businesses, and support economic recovery.

This crisis forced the return of the state’s role strongly in a number of areas, most notably in ensuring maximum levels of economic and social resilience in the face of the pandemic, with what this imposes on the existence of an active role for the state in maintaining jobs and enhancing the role of social protection networks, and increasing the levels of flexibility and dynamism of economic sectors. In the face of the pandemic, with the entailed push towards accelerating the pace of digital transformation.

The summary discussed the changes witnessed by the goals of the social contract in the Arab countries during the period (1960-2021), pointing to four major transformations in this framework, including:

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[*]The role of the state as a main provider of job opportunities and an employee of labor: the period from the sixties until the eighties of the twentieth century (1960-1989): the role of the state during that period focused on interfering significantly in economic activity through the establishment of many public sector companies and the emergence of the role of the state As a main employee of labor during these decades, which resulted in a significant increase in the number of workers in the public sector, whether in the Arab oil importing or exporting countries, which focused through this social contract on employment in the public sector as a mechanism for sharing economic returns. In general, this social contract did not bear the desired fruits for the citizen in light of the decline in the levels of productive efficiency, the inflation of public sector institutions, the high levels of disguised unemployment, and consequently the inability of the state to continue to employ more workers, and the weak participation of the role of the private sector.

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[*]The role of the state in support of the private sector and prepared for business environments during the period (1990-2010): In light of the results of the social contract adopted in the period prior to the decade of the nineties, the pace of economic reforms implemented in the Arab countries accelerated during the nineties of the twentieth century and the first decade of the twenty-first century With the aim of supporting the private sector and increasing its contribution to GDP and employment. This social contract has resulted in an increase in the levels of private sector participation in the GDP in many Arab countries.

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[*]The role of the state in ensuring the fair access of all citizens to economic opportunities during the period (2011-2019): It became clear from the second decade of the twenty-first century that the previous social contract models adopted by Arab countries did not succeed to a great extent in meeting the aspirations of citizens of Arab countries for a number of The reasons, perhaps the most important of which are the failure of these models in ensuring a fair distribution of economic opportunities among all citizens, and in ensuring comprehensive and sustainable growth in a number of Arab countries. In light of the foregoing, the idea of ​​the social contract witnessed a transformation in a number of Arab countries to focus mainly during that period on “the role of the state in ensuring fair access to economic opportunities.” It was also clear in this context the importance of the state encouraging the role of the financial sector in facilitating access to finance opportunities, especially for females, youth and micro, small and medium enterprises.



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[*]The third decade of the twenty-first century: The role of the state as a supporter of economic and social resilience in the wake of the Covid-19 pandemic: The role of the state witnessed a clear growth in the Arab countries starting in 2020 and in the wake of the spread of the Corona pandemic, as Arab governments played an important role in mitigating the social consequences And the economy resulting from the pandemic and adopted stimulus packages amounting to about 281 billion US dollars until the end of the first quarter of 2021, with the aim of supporting families and companies and enhancing the flexibility and dynamism of Arab economies, 49 percent of which were funded from government budgets. This social contract, unlike previous decades, was characterized by focusing the role of the state in particular and through fiscal policy on a number of areas, foremost of which came to maintain jobs, support vulnerable groups, and accelerate the pace of digital transformation.



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Among the twentieth issue of the Arab Monetary Fund's Policy Brief series, calls are renewed in light of the Covid-19 pandemic for a consensual social contract that meets the aspirations of Arab peoples, in which all segments of society, civil organizations, and business sectors participate in formulating, and an inclusive social contract that does not exclude any group of society, and targets Achieving common national goals centered around achieving comprehensive, sustainable and environmentally balanced levels of economic growth that take into account the rights of current and future generations, and include a fundamental shift in the state’s treatment of its citizens within the framework of an institutional relationship governed by responsibility, transparency and integrity towards ensuring decent work, gender equality, and justice between generations and different groups of society .

The summary indicated that the formulation of the social contract must be carried out in accordance with a participatory process that brings together all segments of society, the private sector, youth, civil society organizations and professional unions through a series of community dialogues announced in all audio-visual media and social media to ensure citizens' support for state institutions as part of their efforts To achieve the desired goals of the new social contract, and citizens to bear the economic and social difficulties they may face to implement the required reforms of all kinds. In sum, the process of formulating the social contract must lead to the identification of societal priorities and the role of the government through its various policies to achieve these goals. It also expands to include the roles assigned to citizens who must participate positively in achieving the goals of this contract through many roles, perhaps the most important of which is their compliance with the taxes imposed on them to enhance the government's ability to meet the benefits of the social contract.

Fiscal policy has a major role to play in achieving the goals of the new social contract through the use of various fiscal policy tools on the revenue and expenditure sides to achieve the following objectives:


  • Achieving social justice and reducing inequalities.

  • Protecting jobs and ensuring decent labor markets.

  • Support sustainable recovery.

  • Achieving social cohesion.

  • Accelerate digital transformation and shift towards smart governments.

  • Ensuring governance, integrity and transparency, as a framework that brings citizens together with state institutions.




On the other hand, the brief stressed the importance of focusing fiscal policy within the framework of the new social contract on more involvement of the private sector in implementing projects that achieve economic and social priorities within the framework of the social responsibility entrusted to this sector, in addition to the need to adopt more reforms aimed at achieving financial discipline and sustainability. Finance as an essential pillar to enable governments to meet the aspirations of citizens within the framework of the social contract.
 
The full version of the summary is available through this link



claud39
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