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Islam, Asif M.

Office of the Chief Economist, Middle East and North Africa

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Office of the Chief Economist, Middle East and North Africa

Last updated: September 25, 2024

Biography

Asif Islam is a senior economist for the Middle East and North Africa Region of the World Bank Group. His research focuses on private sector development. He has published in peer-reviewed journals on several dimensions of the private sector including entrepreneurship, technology, crime, informality, and gender. He has also published on fiscal policy, environment, and agriculture. He co-authored several reports including the World Development Report (2019) - The Changing Nature of Work, What's Holding Back the Private Sector in MENA? Lessons from the Enterprise Survey, and Uncharted Waters: The New Economics of Water Scarcity and Variability. He holds a PhD in Applied Economics from the University of Maryland-College Park, and a Bachelor’s degree in Economics and Computer Science from Macalester College.

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Publication Search Results

Now showing 1 - 10 of 31

MENA Economic Update, April 2024: Conflict and Debt in the Middle East and North Africa
(Washington, DC: World Bank, 2024-04-15) Gatti, Roberta; Bennett, Federico; Assem, Hoda; Lotfi, Rana; Mele, Gianluca; Suvanov, Ilias; Islam, Asif M.
The global economy is in its third year of deceleration amidst declining inflation and oil prices. The MENA region grew at 1.9 percent in 2023 and is forecasted to grow at 2.7 percent in 2024. And for the first time since the pandemic, MENA oil exporters and importers will grow at similar rates. The tragedy of the conflict in the Middle East has increased uncertainty. Rising debt leaves many countries in the region exposed. This report unpacks the nature of debt in the region. Oil importers have been unable to either inflate or grow out of debt. Exchange rate fluctuations, and particularly stock flow adjustments (SFA) play a sizeable role. The report highlights the need to address debt transparency. Extrabudgetary items, especially for developing oil importers, need to be accounted for. Primary balances are key, but only to the extent that they capture the true state of government finances.
Altered Destinies: The Long-Term Effects of Rising Prices and Food Insecurity in the Middle East and North Africa
(Washington, DC : World Bank, 2023-04-06) Gatti, Roberta; Lederman, Daniel; Islam, Asif M.; Andree, Bo, Pieter Johannes; Lotfi, Rana; Mousa, Mennatallah Emam; Bennett, Federico; Assem, Hoda
Growth is forecasted to slow down for the Middle East and North Africa region. The war in Ukraine in 2022 exacerbated inflationary pressures as the world recovered from the COVID 19 pandemic induced recession. The response by central banks to raise rates to curb inflation is slowing economic activity, while rising food prices are making it difficult for families to put meals on the table. Inflation, when it stems from food prices, hits the poor harder than the rich, thus compounding food insecurity in MENA that had been rising over decades. The immediate effects of food insecurity can be a devastating loss of life, but even temporary increases in food prices can cause long-term irreversible damages, especially to children. The rise in food prices due to the war in Ukraine may have altered the destinies of hundreds of thousands of children in the region, setting them on paths to limited prosperity. Food insecurity imposes challenges to a region where the state of child nutrition and health were inadequate before the shocks from the COVID-19 pandemic. The report discusses policy options and highlights the need for data to guide effective decision making.
Distributional Crowding Out Effects of Public Debt on Private Investment in Developing Economies
(Washington, DC: World Bank, 2024-06-03) Islam, Asif M.; Nguyen, Ha
The Covid-19 pandemic, followed by financial tightening due inflationary pressure, has raised public debt in developing economies as governments grapple with public health investments to curb the pandemic and collapse in revenues due to slower economic activity. The rise in debt may further disrupt the formal private sector in developing economies. Using two to three waves of panel firm-level data across developing economies, this study finds that higher public debt is correlated with low investment by formal private sector firms. The finding is largely driven by small and medium-size enterprises, domestic firms, and non-exporters — raising concerns about the distributional impacts. Potential channels are uncovered. High levels of debt reduced the accessibility of finance for private sector firms, limiting investment. Furthermore, a regulatory channel is observed. As public debt rises, firms spend more time with regulatory and tax officials, which is possibly indicative of higher efforts of governments to raise revenues. This channel is stronger for small and medium-size enterprises.
Middle East and North Africa Economic Update, April 2020: How Transparency Can Help the Middle East and North Africa
(Washington, DC: World Bank, 2020-04-09) Arezki, Rabah; Lederman, Daniel; Abou Harb, Amani; El-Mallakh, Nelly; Fan, Rachel Yuting; Islam, Asif; Nguyen, Ha; Zouaidi, Marwane
Due to the dual shocks of the spread of the virus and lower oil prices, World Bank economists expect output of MENA to decline in 2020. This is in sharp contrast to the growth forecast of 2.6 percent published in October 2019. The growth downgrade of 3.7 percentage points is arguably a measure for the costs associated with the dual shocks of Covid-19 and the oil price collapse. These numbers are tentative. The true impact depends on future developments of the dual shocks, policy and society’s response, which depends on the transparent use of health and economic data. We recommend a two-step approach: It might be desirable to focus first on responding to the health emergency and the associated economic contraction. Fiscal consolidation and structural reforms associated with the persistent drop in oil prices and pre-existing challenges are also very important, but with proper external support, can wait until the health emergency subsides. Nevertheless, the MENA region has challenges that predate the crisis – it has been growing far slower than its peers. Had MENA’s growth of output per capita been the same as that of a typical peer economy over the past two decades, the region’s real output per capita would be at least 20% higher than what it is today. A large part of MENA’s low growth is arguably due to a lack of transparency. MENA is the only region that dropped in data transparency and capacity since 2005. We estimate that this has cost MENA 7-14 percent in GDP per capita losses since 2005. Lack of transparency hinders credible analyses of many important issues, two of which are highlighted in the report. First, lack of data transparency hampers credible analyses on the region’s debt sustainability – an important issue to examine after the crisis. MENA countries vary greatly in their debt reporting standards. World Bank economists and other external analysts do not have access to vital information about many types of public debt. Second, the unemployment and informality numbers in the region are debatable since MENA countries rely on varying definitions of employment with little harmonization across the region or with respect to international standards. This affects analyses of unemployment and informality.
Mobile Money and Investment by Women Businesses in Sub-Saharan Africa
(World Bank, Washington, DC, 2020-07) Muzi, Silvia; Islam, Asif
This study connects two important findings in Sub-Saharan Africa. First, digital technologies such as mobile money have become widespread and have increased investment by businesses, especially in East Africa. Second, women-owned business in the region significantly lag their male counterparts in capital investments. Using data for 16 Sub-Saharan African economies, the study connects the two findings by exploring whether mobile money use by women-owned firms increases their investment. The findings indicate that the positive relationship between mobile money use and investment is largely driven by women-owned firms and is statistically insignificant for men-owned firms. Potential channels of these effects are explored. Women-owned firms that use mobile money to transact with suppliers are more likely to invest. Mobile money also seems to facilitate greater provision of customer credit and generally greater demand for more credit by women-owned firms. Such patterns are not observed for men-owned firms.
Does Paternity Leave Matter for Female Employment in Developing Economies?: Evidence from Firm Data
(World Bank, Washington, DC, 2016-03) Amin, Mohammad; Islam, Asif; Sakhonchik, Alena
For a sample of 53 developing countries, the results show that women's employment among private firms is significantly higher in countries that mandate paternity leave versus those that do not. A conservative estimate suggests an increase of 6.8 percentage points in the proportion of women workers associated with the mandating of paternity leave.
The Resilience of SMEs and Large Firms in the COVID-19 Pandemic: A Decomposition Analysis
(World Bank, Washington, DC, 2023-09-12) Amin, Mohammad; Jolevski, Filip; Islam, Asif M.
This study analyzes the difference in the decline in sales between small and medium-size enterprises and large firms (the “gap”) following the outbreak of COVID-19 in 19 developing countries. The decline in sales as a percentage of the pre-pandemic level was bigger for small and medium-size enterprises by 12.2 percentage points. The paper uses the Kitagawa-Oaxaca-Blinder and quantile decomposition methods to estimate individual factors’ contributions to the gap at the mean and across the sales decline distribution. Several important results emerge. First, relative to large firms, small and medium-size enterprises faced greater incidence of input supply disruptions during the pandemic, had lower initial labor productivity levels, and were concentrated in country-industry cells with a bigger sales declines. These differences in the level of factors widened the gap. Small and medium-size enterprises also suffered more than large firms from a given level of financial constraints, input supply disruptions, and country-industry-specific factors, and benefitted less from a given level of initial labor productivity. These differences in the returns to factors also widened the gap. Second, the gap was much larger at the relatively high quantiles of sales decline distribution, indicating that relative to large firms, small and medium-size enterprises were much less resilient to large shocks than small shocks. Third, individual factors’ contribution to the gap varied across the sales decline distribution. Thus, the optimal policy mix depends on the size of the shock. Fourth, there were some important differences between geographical regions in what drove the gap. Thus, an eclectic policy approach is needed that duly accounts for the prevailing local conditions.
Paid Maternity Leave and Female Employment: Evidence Using Firm-Level Survey Data for Developing Countries
(World Bank, Washington, DC, 2019-01) Amin, Mohammad; Islam, Asif
The relationship between the length of paid maternity leave and the proportion of female workers in the private sector is explored using firm-level survey data for 66 mostly developing countries. The paper finds a large, positive, and statistically significant relationship between the two. According to the most conservative estimate, an increase of one week of paid maternity leave is associated with a 2.6 percentage points increase in the share of workers in a typical firm that are female. As expected, the stated relationship is much larger when the government pays for maternity leave versus the employer. The results are robust to several controls for firm and country characteristics and other possible heterogeneities in the maternity leave and female workers relationship.
Decomposing the Labour Productivity Gap between Migrant-Owned and Native-Owned Firms in Sub-Saharan Africa
(Taylor and Francis, 2018-09-18) Islam, Asif; Amin, Mohammad
Migration studies have been primarily based on the movement of individuals from developing to developed economies, with a focus on the impact of migrants on host country wages. In this study we take a different angle by exploring the labor productivity of migrant-owned firms versus native-owned firms in 20 African economies using firm-level data. We find that labor productivity is 78 per cent higher in migrant-owned firms than native-owned firms. Using the Oaxaca-Blinder decomposition method we find that structural effects account for 80 per cent of the labor productivity gap. Returns to manager education largely explain the productivity advantage of migrant-owned firms over native-owned firms. Interactions with the government, access to finance, informality, and power outages are also considerable contributors to the labor productivity gap.
The Labor Productivity Gap between Formal Businesses Run by Women and Men
(Taylor and Francis, 2020-09-20) Islam, Asif; Gaddis, Isis
This study analyzes gender differences in labor productivity in the formal private sector, using data from 126 mostly developing economies. The results reveal a sizable unconditional gap, with labor productivity being approximately 11 percent lower among women- than men-managed firms. The analyses are based on women’s management, which is more strongly associated with labor productivity than women’s participation in ownership, which has been the focus of most previous studies. Decomposition techniques reveal several factors that contribute to lower labor productivity of women-managed firms relative to firms managed by men: Fewer women-managed firms protect themselves from crime and power outages, have their own websites, and are (co-)owned by foreigners. In addition, in the manufacturing sector, women-managed firms are less capitalized and have lower labor costs than firms managed by men.