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THE ARAB MONETARY FUND PUBLISHES THE ELEVENTH ISSUE OF THE SERIES "POLICY BRIEF" ON "THE REALITY AND PROSPECTS OF ISSUING DIGITAL CURRENCIES" DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

THE ARAB MONETARY FUND PUBLISHES THE ELEVENTH ISSUE OF THE SERIES "POLICY BRIEF" ON "THE REALITY AND PROSPECTS OF ISSUING DIGITAL CURRENCIES"

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THE ARAB MONETARY FUND PUBLISHES THE ELEVENTH ISSUE OF THE SERIES "POLICY BRIEF" ON "THE REALITY AND PROSPECTS OF ISSUING DIGITAL CURRENCIES" Empty THE ARAB MONETARY FUND PUBLISHES THE ELEVENTH ISSUE OF THE SERIES "POLICY BRIEF" ON "THE REALITY AND PROSPECTS OF ISSUING DIGITAL CURRENCIES"

Post by claud39 Sun Mar 15, 2020 11:33 am

THE ARAB MONETARY FUND PUBLISHES THE ELEVENTH ISSUE OF THE SERIES "POLICY BRIEF" ON "THE REALITY AND PROSPECTS OF ISSUING DIGITAL CURRENCIES"
 2020-03-15


THE ARAB MONETARY FUND PUBLISHES THE ELEVENTH ISSUE OF THE SERIES "POLICY BRIEF" ON "THE REALITY AND PROSPECTS OF ISSUING DIGITAL CURRENCIES" Logo-ar








The interest in issuing crypto assets has increased over the past two decades by utilizing blockchain technology


The high risk of price fluctuations associated with crypto assets helped the emergence of stable currencies 
 
The growing international interest of international central banks in studying the issuance of digital currencies to raise the efficiency of payment systems and increase financial inclusion


International institutions are intensifying their efforts to study the economic and financial implications and set standards for coded assets


Projects to study the issuance of digital currencies issued by central banks in some Arab countries


The importance of Arab central banks setting priorities and comparing advantages and challenges before launching a digital currency


The design chosen for the digital currency issued by central banks has implications for monetary policy and financial stability


In the context of its keenness to develop its research activities, the Arab Monetary Fund launched a research series entitled "Policy Brief", aimed at supporting decision-making in the Arab countries by providing summary research publications that address the most prominent priorities and topics of concern for Arab member states accompanied by recommendations for policymakers.

 The eleventh issue of this series touched on the topic "The reality and prospects for issuing digital currencies", where the summary indicated that digital currencies ( Digital Currencies ) are the currencies that are available in digital form only, and include each of the virtual currencies ( Virtual Currencies ) [size=8][1] ) , Cryptocurrencies , as well as Central Bank Digital Currenc y (CBDC) digital currencies). [/size]

He explained that the shift in the issuance of these assets came in 2008, which witnessed the emergence of blockchain or blockchain technology . The encrypted system assets on the use of encryption technology ( Encryption ) for the generation and transfer of funds , and storage units such as the value Alpetkoan through the use of the source string blocks to make transactions safe, and in some cases unknown technology  [size=8][2] ). Encrypted assets are issued by individuals and are therefore not issued or guaranteed by international central banks. [/size]

The market value of encrypted assets increased by the end of 2017, to reach more than 300 billion USD, compared to about 15 billion USD in January of the same year [size=8][3]). It also exceeded levels of 800 billion dollars during 2018, which made some expect the continued market value of the coded assets to continue to reach the equivalent of one trillion dollars before the end of 2018 [4]  ( [5] ). Encoded to $ 105 billion at the end of 2018, and recorded at the end of 2019 about $ 191 billion [6] ) , indicating high levels of risk of price fluctuations associated with these assets.[/size]

Some studies have been concerned with assessing the potential impact of the emergence of encrypted assets issued by people on both monetary policy and financial stability. In terms of monetary policy, and for these assets to have an impact on monetary policy, the matter depends on two main factors. The first is the size of these assets, as the size of these assets must be competitive with the size of the traditional currency in circulation, which is still a remote matter, as the size of the assets Little compared to the size of traditional currencies, the most important of which is the dollar. The second matter depends on the nature of the process of creating money in the context of digital currencies.

 In this regard, the rate of money supply growth of crypto assets is indicated, among them, for example, pre-programmed bitcoin according to Algorithmic Money Creation algorithms.) Ensures that the number of new currency units issued decreases over time. From the above it is clear that the existence of this system will support the orientations of the central banks aimed at reducing inflation rates and price stability, but it may contradict with the trends of banks aimed at stimulating economic activity by working to produce an acceptable increase in inflation rates as is the case now in the number Among the developed economies, especially European countries and Japan. Nevertheless, it must be clear that, according to the current size of the encrypted assets, and the money creation system used in its framework, and in light of the challenges facing the process of creating more of these assets through the "mining process" currently used to extract the currency, the encrypted assets are still very far On the tangible impact on monetary policy. 

On the other hand, there are concerns about the unfavorable effects of encrypted assets on financial stability. In contrast to the sharp price fluctuations, great concerns arose by the supervisory authorities about the possibility of using encrypted assets produced by individuals that are traded while concealing the identity of dealers in some cases, and outside the control of central banks and other supervisory bodies in money laundering and terrorist financing operations, which is harmful to levels of Financial stability. Accordingly, many international and Arab central banks have tended to prohibit the circulation of encrypted assets, and to issue control warnings of dealing with them, as some of these banks are subject to legal sanctions.

As a result of the considerable challenges faced by the encrypted assets issue is the most important price fluctuations and large - scale that accompany the circulation, appeared recently the trend to another type version of the encrypted assets called "stable currency" ( Stablecoins ) defined by the European Central Bank being a "digital value units do not constitute in As such, it is any form of any specific currency (or basket thereof), but its value instead is associated with a set of fixing tools in order to reduce sharp fluctuations in their prices [7] ) . Fixing devices vary, according to the stability levels associated with each of these tools and the level of complexity associated with them. The more simple the anchor tools, the more stable the levels of crypto assets associated with them, and the more complex their levels, the lower the levels of stability of the associated stable currencies.

Interest has increased recently in stable currencies due to the relatively low levels of risk associated with it compared to other crypto assets mentioned above, which resulted in an increase in its market value from about $ 1.3 trillion in 2018 to 4.3 trillion in 2019. Stable currencies associated with corresponding cash assets are considered ( Tokenized funds ) The most important stable stable currency in circulation, as it controls nearly 97 percent of these currencies, benefiting from the presence of issuers and guarantors. 
The emergence and growing interest in stable currencies has helped Bigtech think) By issuing digital currencies issued by it, which was translated by Facebook’s announcement of its intention to launch a stable currency called “Libra” during the year 2020. This announcement prompted the regulators worldwide to consider the urgent need to organize stable currency trading operations to make them more reliable and acceptable, Hence the start of a new chapter in the history of money. With 2.7 billion active monthly users (a third of the world's population) for Facebook services, and with Libera's connection to a basket of sovereign currencies, it can quickly become a global currency. 

This will pose unprecedented global legal and regulatory challenges related to how to contain the potential risks of stable currencies while not hindering innovation behind them and strengthening its role in increasing levels of financial inclusion. Moreover, the expansion of stable currency trading can represent challenges for central banks in managing monetary policy, especially if there is a return on the possession of these currencies and their circulation on a large scale by individuals and companies not only as a method of payments, but also as a store of value, which is This can affect bank deposits and weaken the ability of banks to create money. Also, these currencies may affect the effectiveness of some monetary policy tools, the most important of which are the interest rate, open market transactions, cash reserves and other monetary policy tools.

On the other hand, the summary indicated that, in light of the global momentum for the issuance of digital currencies, great interest has emerged from the central banks in another type of digital currency, represented in the digital currencies issued by the Central Bank Digital Currency ( CBDC) known by the Bank for International Settlements As "a new form of digital money issued by central banks that differs from reserves or settlement balances held by commercial banks with central banks" [size=8][8]). [/size]

Digital currencies can help central banks improve levels of payment system efficiency, increase financial inclusion, as well as combat financial crime, such as money laundering and terrorist financing. In addition to enabling the central banks in developed countries to overcome the challenges of the inability to reduce the minimum effective interest rate (The Effective the Lower Bound (ELB))  Allowing to stimulate the aggregate demand side. But, in contrast, studies indicate that the digital currencies issued by central banks that are allowed to circulate widely for institutions and individuals may also result in fluctuations and exit of funds held in the form of deposits from commercial banks with the owners preferring to keep their money in the form of the digital currency of the central bank being in all Conditions will be less dangerous, especially in the case of crises, which may harm the process of creating traditional money and affect the management of monetary policy, as it may lead to frequent banking crises [9] ) .

Based on the foregoing, many central banks seek to study the opportunities offered by the issuance of such currencies according to multi-participatory frameworks with other central banks, research centers, industry, technical and academic experts in order to accurately assess these gains as well as hedge against any potential risks. International central banks vary among themselves in terms of the level of progress achieved in this area, and the expected timing of the issuance of this currency. In this regard, the Bank of England is currently working to better understand the implications of issuing a digital currency by deepening research and cooperation within the bank and in cooperation with other partner institutions.

 The Reserve Bank of India is also studying whether central bank-supported digital currencies can be used as legal currencies. On the other hand, the People's Bank of China has worked since 2014 to arrange the issuance of a digital currency (digital yuan) to reduce the costs of handling traditional paper money and to strengthen the control of policymakers over the money supply. The new digital currency to be launched in China this year is similar to the "Libera" coin to be launched by Facebook, in terms of China's intention to use it also through major payment platforms such as (WeChat and Alipay ).

The summary addressed the trends of central banks in the Arab countries with regard to digital currencies, where the supervisory authorities in many Arab countries tended to prohibit the use of encrypted assets issued by individuals and in this context, issued several regulatory instructions warning of the risk of dealing with these assets. The supervisory instructions issued by a number of Arab central banks in Jordan, Bahrain, Algeria, Saudi Arabia, Iraq, Oman, Qatar, Lebanon, Egypt, and Morocco revolved around:


  • Banning the use of encrypted assets by banks and individuals.



  • Punishing merchants who deal in encrypted assets under the anti-money laundering law in some Arab countries.



  • Warning that cryptocurrency transactions involve a high risk of price volatility.



  • Failure to accept encrypted assets as a currency of legal relief.



  • Not accepting encrypted assets for official business transactions.



  • The risk that encrypted assets can be used for money laundering and terrorist financing operations.




Like other international central banks, Arab countries have taken an interest in studying the feasibility of launching digital currencies issued by their central banks. In this context, the "transient" project for cooperation between the Saudi Arabian Monetary Agency and the Central Bank of the United Arab Emirates to study the issuance of a common digital currency is considered one of the most prominent regional projects in this regard [10] )

The Eber project is based on a study of the extent to which blockchain technology can be used to launch a unified digital currency between the two countries and use it between the banks participating in the project inside and outside the borders. Blockchain technology is based on the use of a database distributed between the two central banks and the participating banks. Each block has a timestamp and a link to the previous block so that it becomes impossible to modify. This technology will be used in the reconciliation and reconciliation processes between banks.

 The project aims to 1). Study of digital currencies and how they are issued and traded, 2). Understanding of bank reconciliation and reconciliations using blockchain technology, and 3). Understand the technologies used and the technical and operational impacts on the current infrastructure, 4). Study the effect of issuing a digital central currency on monetary policies.

This project is implemented in three phases, the first stage is the use of the digital currency through a block chain to settle payments between the two central banks in Saudi Arabia and the UAE, then in the second stage it is used to settle transactions between each central bank and national banks in the country, then this is followed by The third stage: the use of the digital currency to settle inter-bank payments in both countries. On the other hand, and within the framework of the Central Bank's efforts to benefit from financial digitization, the Bank of Lebanon has established a committee responsible for issuing the circulars necessary to develop and regulate the financial technology sector, based on the Money and Credit Law and the forthcoming law related to digital transactions. In parallel, the bank has made great progress in the project of issuing a new digital currency as it is now putting the finishing touches to the legal framework regulating the launch of this currency [11]) . 

In Tunisia, in the context of thinking related to the digitization of the economy and the means of payment, the Central Bank of Tunisia, in cooperation with the concerned authorities, studied all available alternatives, including the issuance of a central digital currency. However, this option is still in the study stage, as Tunisia is currently focusing on The digitization of finance in its electronic cash dimension and not in its cryptocurrency dimension. It is currently studying the opportunities and risks associated with modern technologies, especially in the field of electronic safety and financial stability .

The policy briefer mentioned some policy implications regarding the issuance of digital currencies issued by central banks in the Arab countries, including:

The importance of central banks setting the basic priorities for issuing digital currencies

When making a decision to issue a digital currency, central banks must first define precisely the central bank’s priorities and targets for this transformation, as experience indicates the importance of having a clear vision for decision makers to issue digital currencies. Some international central banks resort to it with the aim of increasing the levels of efficiency of payment systems, whether it comes to the system of wholesale payments, and therefore in this case they resort to adopting a digital currency based on the blockchain to facilitate the settlement of payments of the banking sector and other financial sectors, or it is related to retail payment systems through Adopting a digital currency that individuals use to pay and settle national and cross-border transactions within the framework of an electronic payment structure that integrates with the existing infrastructure of the financial sector.

The importance of central banks not competing with financial sector activities

Based on the foregoing, it is necessary to carefully determine the priorities of the central banks and careful thinking and answer an important question regarding the ability of the financial sector to meet these priorities. In the event that the private sector is able to meet these goals, it may be better to leave the private sector the opportunity to do this in light of stimulating regulatory and legal frameworks, in order to avoid the risks that may arise from the complexity of the functions of the central bank in the framework of issuing this currency and monitoring its circulation And bear all the risks associated with each stage of its trading, in addition to avoiding central banks to engage in transactions that would crowd out financial sector activities.

The need to balance the benefits of issuing digital currencies with the challenges associated with them

Each country needs to differentiate between the benefits of launching a digital currency issued by the central bank, with the resulting challenges and so that it chooses what suits them in line with the nature of the development of its financial sector and the existing payment systems. The advantages of issuing a digital currency are numerous and vary between increasing levels of speed and efficiency of payment systems, reducing the cost of issuing cash, as well as increasing levels of competitiveness of payment systems, facilitating digital transformation, and reducing cash transactions.

 Some countries also count on central banks issuing digital currencies to achieve public policy goals such as increasing levels of financial inclusion, consumer protection, combating money laundering, terrorist financing and tax evasion, in addition to facilitating economic recovery for societies in the event of any local or international disasters or crises. 
Nevertheless, the use of issuing such currencies is related to a number of challenges, the foremost of which is the ability to influence financial intermediation operations and the mechanism of creating regular money in the case of the central bank’s tendency to issue a digital currency that serves the purposes of retail payments, and the resulting potential for individuals to resort to large quantities. 
Of this currency, which may affect the levels of bank deposits and reduce the ability of banks to attract deposits and raise their cost. It may also entail, in crisis situations, the increased levels of demand for the digital currency issued by the Central Bank that are not linked to any risks compared to the rest of the financial assets, which may affect the entire financial system.

The importance of careful evaluation and choosing the best and most suitable design for the digital currency issued by the Central Bank:

Each type of digital currency issued by central banks is associated with a set of features and challenges. For example, the digital currencies issued by central banks to serve wholesale payments differ from those targeting retail payments in terms of their respective effects on payment systems, monetary policy, and financial stability.
 On the other hand, the issue of designing a digital currency is linked to some other important considerations which are the comparison between a coin design, which reveals or conceals the identity of customers in light of the need for central banks to track the identity of customers to meet the requirements of combating money laundering and terrorist financing, tax evasion and bribery. However, disclosing customer identity poses challenges related to privacy protection considerations, data confidentiality and cyber security.

The need to create legal and regulatory frameworks and provide other requirements necessary for the successful issuance of such a currency

The success of issuance of this currency requires the availability of a number of supportive requirements that relate to the existence of a strong legal environment that governs the transactions of digital currencies and the consequent necessity of their dealings with the legal frameworks established to combat money laundering and terrorist financing, data protection and privacy considerations. This is in addition to a number of other requirements that are strengthened, for example, the shift to digital identity systems, which allows tracking transactions and increases levels of utilization of digital financial services.

The full version of the issue is available at this link
 https://www.amf.org.ae/ar/issue-11-feb-20-policy-brief


[size]
[1] Those that are traded in some applications on the Internet, especially those for entertainment and entertainment.
[2]   The BI Intelligence, (2017). “Bitcoin 101: Understanding Blockchain Technology, Bitcoins, and the Rise of Cryptocurrency”, Dec.
[3]   The BI Intelligence, (2017). Ibid.
[4]   Cryptoground, “Cryptocurrency Market Cap Predicted to hit $ 1 Trillion Later This Year.”
[5]   The BI Intelligence, (2017). “Op. cit.
[6]  Coinmarketcap, (2020).
[7]   Bullmann, D. et al. (2019). “In search for stability in crypto-assets: are stablecoins the solution?”, ECB Occasional Paper Series, Aug.
[8]     BIS, (2018). “Central bank digital currencies”, Committee on Payments and Market Infrastructures, Markets Committee.
[9]     Lee, V. and Wessil, D. (2018). “Digital currencies: Five big implications for central banks”, Brooking, May
[10] United Arab Emirates Central Bank (2019). "Transient: a project to issue and use a virtual e-currency in an experimental way, confined to trading between a number of banks of the two countries", the Central Bank of the United Arab Emirates, a presentation made during the third meeting of the Monetary Policy Working Group in the Arab Countries between the Arab Monetary Fund and the Bank for International Settlements, November.
[11]   AMF and BIS, (2020). “Central Bank Papers on Monetary Policy Frameworks in the Arab Countries”, Third Working Party Meeting on Monetary Policy in the Arab Region.




https://www.amf.org.ae/ar/content/%D8%B5%D9%86%D9%80%D9%80%D9%80%D9%80%D8%AF%D9%88%D9%82-%D8%A7%D9%84%D9%86%D9%82%D8%AF-%D8%A7%D9%84%D8%B9%D8%B1%D8%A8%D9%8A-%D9%8A%D8%B5%D9%80%D9%80%D9%80%D9%80%D8%AF%D8%B1-%D8%A7%D9%84%D8%B9%D8%AF%D8%AF-%D8%A7%D9%84%D8%AD%D8%A7%D8%AF%D9%8A-%D8%B9%D8%B4%D8%B1-%D9%85%D9%86-%D8%B3%D9%84%D8%B3%D9%84%D8%A9-%D9%85%D9%88%D8%AC%D8%B2-%D8%B3%D9%8A%D8%A7%D8%B3%D8%A7%D8%AA-%D8%AD%D9%88%D9%84-%D9%88%D8%A7%D9%82%D8%B9-%D9%88%D8%A2%D9%81%D8%A7%D9%82-%D8%A5%D8%B5%D8%AF%D8%A7%D8%B1
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THE ARAB MONETARY FUND PUBLISHES THE ELEVENTH ISSUE OF THE SERIES "POLICY BRIEF" ON "THE REALITY AND PROSPECTS OF ISSUING DIGITAL CURRENCIES" Empty THE ARAB MONETARY FUND PUBLISHES A STUDY ON "GENERALIZED BASIC INCOME"

Post by claud39 Wed Mar 18, 2020 9:15 am

THE ARAB MONETARY FUND PUBLISHES A STUDY ON "GENERALIZED BASIC INCOME"


2020-03-18

THE ARAB MONETARY FUND PUBLISHES THE ELEVENTH ISSUE OF THE SERIES "POLICY BRIEF" ON "THE REALITY AND PROSPECTS OF ISSUING DIGITAL CURRENCIES" Logo-ar








The interest of some countries in the world in the generalized income programs, as a mechanism to reduce poverty and reduce income inequality

The full implementation of these programs faces challenges related to how they are funded without imposing additional burdens on the state budget

Partially implementing these programs in a number of countries has contributed to reducing poverty, improving health, nutrition and promoting economic activity

The difficulty of implementing generalized basic income programs in some Arab countries, especially in light of the high population density and narrow financial space

The necessity of focusing Arab countries in return on increasing the effectiveness of social spending by strengthening social safety nets based on efficient mechanisms for targeting



In line with its ongoing efforts to support the decision-making process in the Arab countries, the Arab Monetary Fund released a study on " Universal Basic Income" (UBI ), which highlighted several issues related to generalized income, including its pros and cons, and financing options. , And international experiences in this regard. In addition, the study attempted to answer a question regarding the extent to which generalized income can be one of the economic policy options applicable in Arab countries .

The study indicated that the idea of ​​basic income generalized has been discussed and tested widely by a number of governments recently, as a new financial reform is required to reduce levels of income inequality. Generalized general income can be defined as one of the fiscal policy options within the framework of social protection programs, in which the government replaces traditional social transfer programs, by distributing an unconditional total amount of cash transfers to each citizen regardless of marital, employment, or other preconditions. The idea of ​​generalized basic income has received political and economic attention recently in many developed and developing countries alike such as the United States of America, Canada, Switzerland, Finland, India, China, Namibia, Brazil and other countries.

Regarding the pros and cons of generalized basic income programs, supporters of the idea see that it can help governments overcome a number of long-term challenges, the most important of which is reducing income inequality, which is one of the most pressing challenges facing many developed and developing economies at the current stage. In this context, fiscal policy can play an important role in reducing income inequality, as it contributes through its various tools to reducing about a third of the levels of inequality in income distribution that exist before taxation and distribution of subsidies. In this context, some economists, governments, and political parties view basic income programs as one of the most important fiscal reforms that can help contain income inequality simply because it flows directly to the poor.

In addition, generalized basic income programs that replace existing ineffective and inequitable subsidy systems that mainly benefit the wealthy, particularly with regard to energy subsidy systems, can contribute to increased levels of social spending efficiency. Also, some social remittance systems have limited coverage due to the inefficiency of targeting mechanisms and associated bureaucratic procedures, which makes it difficult for some groups to benefit from them (such as people with special needs or the elderly). Hence, generalized basic income programs can help reduce poverty more effectively than ordinary social transfers, and they will also help stimulate economic growth in light of the higher marginal propensity to consume among the poor compared to that of the rich.

Despite the promising advantages of this type of program, opponents of the idea see that it is linked to a number of challenges, perhaps the most important of which is the cost associated with the actual implementation of them, especially for countries with large population densities. On the other hand, directing social transfers to non-deserving groups represented by rich groups means less benefit for the poor from these transfers. It also means that the sums that the poor will receive will be much lower than the levels required to eradicate poverty.

Also, from the viewpoint of opponents, these programs may have a negative impact on the labor market, as it can weaken the incentive to work for some individuals and reduce the levels of job offer. Moreover, it can encourage more fertility rates, thereby limiting the efforts of some countries with high population densities to control overpopulation. It can also encourage immigration to countries with this type of social transfer, which complicates migration problems.

In terms of the cost of implementing these programs, the International Monetary Fund estimated about 6.5 percent of the gross domestic product of developed economies, and 3.75 percent of emerging market economies in the event that governments tended to distribute a fixed amount estimated at about a quarter of the average per capita share of the product to all Community members [size=8][1] ). There are a number of alternatives to financing generalized basic income programs that have a neutral impact on the state's general budget, including: (1) financing through the use of all financial resources allocated to social remittance programs, especially energy and food support systems, (2) financing through additional taxation, and (3) Financing by reducing public spending on some other area of ​​spending.[/size]

The study issued by the Arab Monetary Fund indicated that despite the momentum gained by the idea of ​​basic income programs generalized in some countries in recent years, that idea has not been fully implemented until now. On the other hand was implemented similar programs were experimentally through what is known as basic income programs (BI - ))  ( Basic , Income , and the programs of basic income partial   (Partial Basic Income) through pilot projects aimed at the total coverage of some segments of society in a number of countries , including The United States of America, Finland, Canada, Namibia, India, China and Brazil, some of which have had promising results in terms of poverty reduction, health improvement, nutrition and enhanced economic activity.

In addition to the above, the study attempted to answer whether the generalized basic income programs could represent a viable option within the framework of financial policy in the Arab countries, and pointed to the focus of Arab countries during the past decades on alleviating poverty and reducing inequality in income distribution. These efforts resulted in low levels of income inequality in income distribution in eleven Arab countries, of which seven Arab countries have achieved a noticeable decrease in income inequality, translated by a decrease in the “genetic factor” in those countries by between 2.7 to 12.6 percentage points, While the decline was limited in four countries where it did not exceed the percentage point .

The study indicated that, despite the efforts made in the region to reduce poverty and income inequality, more focused, effective and targeted policies are needed to reach the required levels in this field within the framework of the sustainable development goals by 2030, including each of the goal (1) Goal 2: Eradication of Poverty, Goal 2: Eradication of Hunger, Goal 5: Gender Equality, and Goal 10: Reducing Inequalities . Based on the foregoing, the financial reform efforts in the Arab countries adopted since 2015 focused on achieving financial discipline and ensuring financial sustainability. In this context, great emphasis has been placed on reforming commodity support systems and strengthening social protection networks to reduce poverty and income inequality .

Like other countries, the generalized basic income programs have not been fully adopted in the Arab countries, especially in light of the high cost of these programs, especially for Arab countries with a high population density such as Egypt, Iraq, Algeria and Sudan, as well as in light of the limited financial space available in a number of countries Arabic. Therefore, the priority now is to increase the levels of social spending efficiency, and to strengthen social safety nets by:


  • Increase the resources allocated to social safety nets by taking advantage of the financial savings resulting from the reform of support systems, especially energy subsidies .

  • Strengthening targeting mechanisms by setting reliable targeting standards, building accurate databases for targeted people, cooperating with NGOs and local governments to update and refine targeting databases, and developing an effective framework for targeting cash transfers to the poor .

  • Expanding the coverage of social protection network programs by expanding their geographical coverage and target groups .

  • Focus on conditional cash transfer programs, given their ability to promote social development .

  • Linking the implementation of social protection network programs to achieving the goals of sustainable development, especially those related to reducing poverty, reducing income inequality, and empowering women .

  • Evaluating the efficiency of existing social safety net systems and adjusting programs based on successful models .



 

The full version of the study is available at  this link








 



[1] International Monetary Fund (2017). “Fiscal Monitor”, Oct.










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