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Working Paper Series - Globalization and Inequality in the Arab Region



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Globalization and Inequality in the Arab Region


Volume : 0

No : 0

ISSN : WPS0307

Publisher : Arab Planning Institute - Kuwait

Author (s) : Ali Abdel Gader Ali 

Published Date : 1/1/2003


Contents :
The paper investigates theeffect of globalization on the Arab region. Understanding the process ofglobalization as increased international economic integration three measures ofglobalization are used: the rate of increase of trade/GDP ratio; the ratio ofthe stock of foreign direct investment to GDP; and the number of immigrants tothe US.Inequality in the distribution of income is looked at in terms of the averageincome of the poor and the Gini coefficient. It is shown that (a) the Arabregion has been left out of the process of globalization; (b) despite theproblems involved in getting high quality data on income, or expenditure,distribution, there is evidence to show that the Arab region boasts a fairlyhigh degree of income inequality; (c) the time trend of the degree ofinequality in Arab countries, however, remains problematic with official datashowing that inequality has declined over the 1990s decade; (d) the Arab poor,appropriately defined, stand to benefit from trade induced economic growth byabout 50 percent of the increase in per capita income; and (e) there existspreliminary evidence of a direct causal link between globalization as measuredby FDI/GDP ratio and immigration to the USA in such a way that FDI increasesinequality while immigration reduces it. Increased trade participation does notseem to affect inequality.

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