The New Normal: “The Business Ecosystem in the Middle East and Europe”

The business ecosystem in the Middle East and Europe

Eliminate onerous trade regulations

KINGSTON, JAMAICA, May 9, 2022 / — We are at a point in our history, globally, where the rising cost of living is beginning to erode government, business and household budgets already restricted. Unsurprisingly, indebted businesses and consumers are increasingly using credit cards to settle their bills and pay their suppliers.

This engenders calls in some quarters for government intervention in the form of subsidies, price controls and even measures bordering on protectionism. Not only would this require additional fiscal space that barely exists in the case of many import-dependent economies; it could also lead to the unintended consequences of imposing shortages, rationing, waiting lists and other allocative inefficiencies on consumers.

Moreover, giving in to protectionist sentiment could weaken the foundations of the rules-based architecture that for many decades has underpinned international trade and offered consumers greater choice, among other tangible welfare gains.

Instead, there is the alternative proposal (a new normal) of introducing a range of supply-side non-tax reforms aimed at reducing the cost and reducing the hassle of doing business under the existing rules-based agreements.

With this in mind, the publication highlighted here provides a whole series of practical recommendations for eliminating some of the most onerous regulations that characterize the business ecosystem of a sample of 26 countries in the Middle East and Europe. Careful adoption of these light supply-side measures could open up market entry opportunities for new players to offer differentiated products and services at competitive prices.

Philip Stafford Baker
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Michael J. Chiaramonte