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Nordine Abidi, Mehdi El Herradi, and Sahra Sakha
The COVID-19 pandemic has resulted in an unprecedented shock to firms with adverse consequences for existing productive capacities. At the same time, digitalization has increasingly been touted as a key pathway for mitigating economic losses from the pandemic, and we expect firms facing digital constraints to be less resilient to supply shocks. This paper uses firm-level data to investigate whether digitally-enabled firms have been able to mitigate economic losses arising from the pandemic better than digitally-constrained firms in the Middle East and Central Asia region using a difference-in-differences approach. Controlling for demand conditions, we find that digitally-enabled firms faced a lower decline in sales by about 4 percentage points during the pandemic compared to digitally-constrained firms, suggesting that digitalization acted as a hedge during the pandemic. Against this backdrop, our results suggest that policymakers need to close the digital gap and accelerate firms’ digital transformation. This will be essential for economies to bounce back from the pandemic, and build the foundations for future resilience.
Nordine Abidi, Mehdi El Herradi, and Sahra Sakha

The COVID-19 pandemic has resulted in an unprecedented shock to firms with adverse consequences for existing productive capacities. At the same time, digitalization has increasingly been touted as a key pathway for mitigating economic losses from the pandemic, and we expect firms facing digital constraints to be less resilient to supply shocks. This paper uses firm-level data to investigate whether digitally-enabled firms have been able to mitigate economic losses arising from the pandemic better than digitally-constrained firms in the Middle East and Central Asia region using a difference-in-differences approach. Controlling for demand conditions, we find that digitally-enabled firms faced a lower decline in sales by about 4 percentage points during the pandemic compared to digitally-constrained firms, suggesting that digitalization acted as a hedge during the pandemic. Against this backdrop, our results suggest that policymakers need to close the digital gap and accelerate firms’ digital transformation. This will be essential for economies to bounce back from the pandemic, and build the foundations for future resilience.

Nordine Abidi, Mehdi El Herradi, and Sahra Sakha

pandemic better than digitally-constrained firms in the Middle East and Central Asia region using a difference-in-differences approach. Controlling for demand conditions, we find that digitally-enabled firms faced a lower decline in sales by about 4 percentage points during the pandemic compared to digitally-constrained firms, suggesting that digitalization acted as a hedge during the pandemic. Against this backdrop, our results suggest that policymakers need to close the digital gap and accelerate firms’ digital transformation. This will be essential for economies to

Mr. Jorge Márquez-Ruarte and Bijan B. Aghevli

. At the same time, a neglect of light industries weakened the efforts to improve the quality of traditional export goods. Another source of pressure on the economy was a rapid expansion of housing. Demand for residential housing was spurred by increased inflationary expectations and a sharp growth in workers’ remittances associated with the increase in construction contracts obtained by Korean firms in the Middle East. During 1977–78, total fixed investment in real terms rose at an average annual rate of over 30 percent and accounted for about three quarters of

proposition to start and run a business. Most countries in the region fare poorly on global governance rankings, and increasingly so over the past decade (see Chart 2 ). Corruption is a major problem: more than half the firms in the Middle East and North Africa region report that they have been asked for bribes—a much higher share than in any other region in the world (World Bank Enterprise Surveys). Chart 2 Clean house Governance and corruption are increasingly serious obstacles for Arab countries in transition. Source: World Bank, Worldwide Governance

International Monetary Fund. African Dept.

Performance and their Perception of Political Instability in Egypt: Evidence from an Endogenous Treatment Regression Model ”, Journal of African Development 20 ( 2 ): pp. 61 – 68 . Hosny , Amr ( 2017 ) “ Political Stability, Firm Characteristics and Performance: Evidence from 6,083 Private Firms in the Middle East ”, Review of Middle East Economics and Finance 13 ( 1 ): 1 – 21 . IMF ( 2017 ) “ Job-intensive growth through strengthening the business environment ”, Selected Issues Paper. IMF Country Report no .17/81 . Washington, D

Amr Hosny

Endogenous Treatment Regression Model ”, Journal of African Development 20 ( 2 ): pp. 61 – 68 . Hosny , Amr ( 2017 ) “ Political Stability, Firm Characteristics and Performance: Evidence from 6,083 Private Firms in the Middle East ”, Review of Middle East Economics and Finance 13 ( 1 ): pp. 1 – 21 . IMF ( 2017 ) “ Job-intensive Growth Through Strengthening the Business Environment ”, Selected Issues Paper. IMF Country Report no .17/81 . Washington, D.C. : International Monetary Fund . IMF ( 2019 ) “ Annex VII. Financial Development and

International Monetary Fund. Middle East and Central Asia Dept.

An uneven recovery is emerging across firms in the Middle East and Central Asia (ME&CA) region, after being hit hard by the COVID-19 crisis. Despite policy support and firms making large cost adjustments, high-contact-intensive sectors, firms with preexisting vulnerabilities, small firms, and those lacking digital connectivity faced the brunt of the pandemic. Although liquidity and solvency risks have been contained so far for the overall corporate sector, liquidity stress is projected to remain elevated for these vulnerable firms, but solvency concerns could

Amr Hosny
A recent World Bank enterprise survey identified access to finance as the top constraint to Doing Business in Nigeria. In this context, the objective of this paper is two-fold: (i) study firm characteristics associated with more access to finance and export diversification; and (ii) quantify the impact of these structural obstacles on firm performance. Results suggest that (i) larger and export-oriented firms are about 40 percentage points less likely to report access to finance as a business obstacle, while firms perceiving access to finance as a constraint are, on average, about 10-40 percentage points less likely to be export-oriented diversified firms; and (ii) better access to finance and export diversification can help firm employment —as much as 80 percent higher— and capacity utilization. Results are largely robust to different specifications and estimation methods.
International Monetary Fund. African Dept.
This Selected Issues paper discusses further concrete steps to improve the governance of state-owned enterprise (SOE) and of the oil sector, given their importance to fiscal transparency and sustainability. Reducing leakages in the petroleum sector is especially macroeconomically critical, given Nigeria’s current fiscal and external dependence on oil revenue. This paper provides an overview of developments, recent reforms, and challenges, and outlines policy recommendations for stronger governance and corruption prevention, detection, and resolution, including through anti-money laundering and combating the financing of terrorism measures that are useful beyond the petroleum sector. Strengthening transparency is needed to ensure that Nigeria receives maximum benefits from the oil and gas sector. The Nigerian authorities must accelerate their anti-corruption efforts to maintain momentum against both entrenched challenges and evolving threats. Achieving critical improvements to SOE governance and Anti-Money Laundering and Combating the Financing of Terrorism efforts will require a combination of legislative action, institutional reform, and additional resources.