No.

107-2022

Economic Studies

Towards a Circular Economy in The Arab Region:

Development of Transformation Measurement Index

Dr. Anwar Othman

 Towards a Circular Economy in The Arab Region:
Development of Transformation Measurement Index

Dr. Anwar Othman

Arab Monetary Fund

September 2022

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 ©Arab Monetary Fund 2022

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 Table of Contents
Introduction ........................................................................................................................................... 5
Literature Review ................................................................................................................................. 7
Circular Economy Framework ............................................................................................................ 9
Construction of CE index ................................................................................................................... 10
Index Definition................................................................................................................................. 10
Region's CE index objective .............................................................................................................. 10
Proposed CE Index Framework ......................................................................................................... 11
Methodology..................................................................................................................................... 12
The CE Index’s Limitations ................................................................................................................ 15
Conclusion ........................................................................................................................................... 15
Recommendations and Policy Suggestions ....................................................................................... 15
References ............................................................................................................................................ 17

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 Abstract
Globally, a circular economy (CE) is being promoted as a policy to achieve economic,
environmental, and social sustainability. A significant reason for this is the increasing
recognition of CE indices as effective tools in preventing resource waste and reducing negative
environmental impacts. The aim of this study, therefore, is to establish a regional index based
on globally recognized CE indicators that can be used to measure countries' transition toward
circular economies implementation. Among the main components of the index are economic,
business, environmental, governance, infrastructure, and social indicators. A bottom-up
approach is utilized to develop the index structure, with four levels: items, sub-indicators, main
indicators, and finally the index. In order to calculate the index, a structured statistical
methodology is developed in four stages, including the normalization of items value, the
geometric mean of sub-indicators, the weighted geometric mean of main indicators, as well as
the index calculation itself. In light of the index developed by the study, policymakers and
stakeholders in the CE can determine the countries' transmission level toward CE and adopt
policies to develop CEs activities in the region, reducing waste in natural resources, achieving
economic, environmental, and social sustainability, as well as enhancing the added value of
Arab economies.

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Introduction
Currently, the global economy operates on a linear model. This model exploits natural
resources, processes them into products, and discards them, causing significant environmental
damage, wasting natural resources, and destroying biodiversity (Sariatli, 2017). In turn, it
negatively affects health and causes climate disasters such as global warming, floods, melting
ice, rising ocean levels, and harms current and future generations' rights (Millar et al.,
2019). Today, however, people are beginning to realize that continuing along the linear
economic system path will result in higher risks and costs, whether on the economic, human,
or environmental levels. In response to these risks and the high costs associated with them,
governments and civil society have been exploring alternative solutions and pushing the
transition toward a circular economy (CE). In a CE, natural resources are conserved by
eliminating waste, reusing resources, sharing, repairing, renewing, re-manufacturing, and
recycling materials through a closed loop system (Murray et al., 2017; Jorgensen & Pedersen,
2018; Babbitt et al., 2018; Hofmann, 2019; and Morseletto, 2020). Since the CE offers many
advantages and has been endorsed by many governments, civil society organizations as well as
economic institutions, we believe that its adoption in the Arab region will achieve a balance
between economics, social, and environmental aspects.
In contrast to the linear economy, the CE follows a number of key philosophies, including the
organization of reversible cycles, resource efficiency, systems thinking, thinking in the form
of systems, giving priority to the future, and creating mutual benefits between parties (Hout,
2017). By adopting a CE system, mankind can preserve natural resources, increase its
competitiveness, reduce dependence on raw materials, reduce costs, build supply security,
reduce greenhouse gas emissions, reduce the environmental impact of resource extraction, and
offer new investment opportunities (Ly, 2021). In addition, the CE is strongly connected to the
Sustainable Development Goals (SDGs), as the United Nations General Assembly and UN
Economic and Social Council in September 2018 established the following goals: 7, 8, 11, 12,
13, 14, and 15 as highly relevant objectives for achieving a CE (Schroeder et al., 2019; El Wali
et al., 2021). As outlined in these goals, there is an emphasis on ensuring reliable, sustainable,
and affordable modern energy services for all; Promoting sustained and inclusive economic
growth; providing full employment and decent work for all; and promoting inclusive, safe, and
sustainably resilient cities and human settlements. Further, ensure that climate change is
addressed, and its impacts are minimized, that oceans, seas, and marine resources are conserved
and sustainably used, that terrestrial ecosystems are protected, restored, and managed, and that
desertification is defeated, and that land degradation and biodiversity loss are halted (Schroeder
et al., 2019).
In general, CE is the cornerstone of modern economies, including the green economy, the
sustainable economy, the biological economy, and the purposeful economy. This is in order to
create a balance between economic activities and the protection of the environment and
climate. In the Arab region, many effective CE initiatives have been implemented. As an
example, there is a recycling company in Saudi Arabia's third industrial city, Riyadh. It is the
first and biggest in the Middle East and North Africa, recycling 3 million tons of waste
annually. Similarly, in the State of Qatar, there is a Waste Treatment Center in the Masa'ada
area, which recycles household waste to generate electricity. A number of green sukuks have
also been successfully launched in the region to support green finance and CE. These include
one issued by Majid Al Futtaim worth USD 1.2 billion and another by Saudi Electricity

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 Company worth USD1.3 billion. Additionally, the Islamic Development Bank and Egypt
issued green sukuks in the region in October and November 2021.
As of 2021, the UAE launched a nationwide CE policy and established a CE council consisting
of federal, local, and private sector representatives. The council aims to implement the CE
policy through national plans and legislation that encompass and monitor sustainability criteria
using the following steps as a guide. Developing strategies, policies, and initiatives that
integrate CE principles into national plans; facilitating the development of immature markets;
and increasing the ability of international players to reach the market. In addition, according to
the report by Omar Adel (2019) who stated that using the CE model in the UAE's cities could
result in savings of up to 28 billion dollars (102.8 billion dirhams) over the period from 2020
to 2030, scattered across 7.2 billion dollars in the urban environment, $11 billion in
transportation systems, and $9.8 billion in housing. Furthermore, the report indicates that Dubai
has constructed the world's largest waste-to-energy plant that will make Dubai the most
sustainable and smart city by treating 1,900 tons of household waste annually, while the gases
resulting from the process will be treated in the most environmentally safe and efficient manner
possible.
Additionally, the report stated that Dubai Industrial Park offers support to its partners in order
to adopt sustainability and recycling strategies. For example, the factory operated by Unilever
uses solar energy and water recycling technologies, reducing the environmental impact of
logistics by 90%. Further, the report demonstrates that in the UAE, Emirates Global
Aluminium supplies nearly all its production to cement factories. Cement factories use the dust
generated in the smelting process as an alternative fuel. More so, in 2008, the Abu Dhabi
government established a company, "Tadweer", responsible for the policies, strategies, and
contractual systems to manage waste in the emirate. Meanwhile, in coordination with the
Tadweer Center, the "TAQA" company started building a waste-to-energy plant to produce
electricity for the needs of more than 20,000 homes in addition to organic fertilizers and other
products, valued at more than 1.2 billion dollars. Similarly, in 2007, Sharjah Environment
Company created the "Bee'ah" centre in the Emirate of Sharjah, which is the world's third
largest of its kind. In addition to this, there are industrial facility that self-recycle industrial
wastes as by-products.

Even though, there are many successful initiatives that embrace the CE in the Arab region,
however, in Arab countries, the CE faces many obstacles in the form of cultural, legislative
and regulatory, marketing, and technological barriers (Kirchherr et al., 2018). In particular, CE
principles need to be incorporated into all aspects of the product life cycle, from raw material
provision to disposal. A circular economy still lacks industry-specific guidance. Regulation of
this sector is still lacking international standards. In addition, there is still a lack of public
awareness of the CE. Further, CEs and their applications do not yet have a legal framework in
almost all countries in the region, as well as CE still require more investment as a new system.
In addition, even though the Arab region offers a variety of natural resources, its strong
economic growth path makes it vulnerable to some of the same challenges as other fast-
growing economies. Urbanization and crude oil extraction represent one of the largest sources
of waste and environmental pollution (Al Zoubi, 2020). Agricultural land and water supplies
are also in short supply in the Arab region. Thus, traditional farming methods cannot increase
food production and are heavily dependent on food imports. According to the UN Food and
Agriculture Organization report, the Middle East and North Africa produce 250 kilograms of
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food waste per person, worth over USD 60 billion annually. In addition, recycling rates remain
relatively low in the Arab region (Al Zoubi, 2020). Hence, this study aims to establish an
"index" to estimate the level of dependence on the CE and the recycling rate in the Arab region
in order to control waste in natural resources, reducing negative environmental impacts and
boost Arab economies' added value going forward. In other word, this study is dedicated to
establishing a regional index for measuring countries' progress toward CE implementation in
the Arab world.

Literature Review
The CE concept is gaining popularity among governments, world organizations, regulators,
academics, researchers, as well as the public. In many countries around the world, efforts have
been made to develop strategies, models, and indicators in order to measure and evaluate CE
transformation and adoption. Among them are China, Europe, the United States of America
(USA), Belgium, the United Kingdom (UK), Australia, the Netherlands, India, Italy, Denmark,
Japan, Spain, and South Korea (De Pascale et al., 2021). According to the current literature,
indicators have been classified into three board levels, namely Micro, Meso, and Macro level
(De Pascale et al., 2021). By incorporating macro indicators, we can harmonize trade,
environmental, and economic policies on a national and international scale. While, using Meso
indicators at a national level, one can identify not only material categories, but also industries
and consumption patterns. Additionally, micro-level indicators offer details about specific
business or local decision-making processes (Geng et al., 2012; %DQDLWơ, 2016; and Morseletto,
2020).

A recent study by De Pascale et al., (2021), provides an overview of 61 CE indicators

worldwide. The indicators were grouped into macro, meso, and micro categories, and on the
basis of economic, environmental, and social sustainability dimensions, then on the basis of
the 3R Core CE principles, namely Reduce, Reuse, and Recycle. In addition, it is evident from
the literature that China has extensively applied and developed CE concepts at the macro and
meso levels (Zhou et al., 2014). A few examples of macro level are Geng (2011), Jiang (2011),
Faizi et al. (2018), Chun-rong and Jun (2011), Qing et al. (2011), Xiong et al. (2011), Geng et
al. (2012), and Wu et al. (2014). It is proposed that seven macro-level indicators be used in
China, which are multi-scale integrated analyses of societal metabolism; An evaluation index
system for CE development level; An evaluation index for CE development; a system for
evaluating CE development; the efficiency evaluation index for CE development; the Chinese
National CE Evaluation Indicator System; the Super Efficiency DEA model. The proposed
indicators reflect the sustainability dimensions of Environmental, Economic and Social and
adhere to CE's core principle of Refuse, Rethink, and Reduce. An example of a meso level
VWXG\LQ&KLQDLV*HQJHWDO  7LHMXQ  :HQDQG/L  6DáDEXQ et al. (2019),
Su et al. (2013), Geng et al. (2008), Su et al. (2013), Geng et al. (2012), Li (2011), Li and Su
(2012), Wen and Meng (2015) and Zhao et al. (2017). A variety of indicators were developed,
including Energy based indicators, Resource Productivity, MEP indicators system, NDCR
evaluation indicator system, and Comprehensive evaluation index system. Indicators align with
CE's core principles of Refuse, Rethink, Reduce, Reuse, Repair, Refurbish, which include
environmental, economic, and social sustainability factors.

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 Additionally, the CE concept and its indicators have only been discussed at micro to macro
levels in the EUORP region, according to the literature review. Several micro-level studies
have been conducted by Ellen MacArthur Foundation and Granta Design (2015), Di Maio and
Rem (2015), Mohamed Sultan et al. (2017). Among these are the CE Index for recycling car
materials that are consistent with CE's core principles of Reducing; the Material Circularity
Indicator for products/materials that are consistent with CE's core principles of Refuse,
Rethink, Reduce, and Reuse; and finally, a Recycling Desirability Index for materials that
comply with CE's core principles of Reducing. Among the studies that have been published on
the macro level within the EU region are Eurostat (2001), Haas et al. (2015), Smol et al. (2017),
and Mayer et al. (2018). In addition, these studies cover guidance on Material Flow Analysis
and Accounting, circularity indicators based on the MFA approach, regional eco-innovation
indicators, and establishing tools for monitoring material flows that achieve the CE core
principles of Refuse, Rethink, and Reduce at a macro level.

In addition, another typical example of CE indicator developed in the United States of America
were on a micro level is the Reuse Potential Indicator that is in line with CE core principles of
refuse developed by Park and Chertow (2014) applied to resource waste and the Recycling
Desirability Index developed by Mohamed Sultan et al. (2017) that applied for materials related
to CE core principles of Reduce. At a macro level, a Eurostat study (2001) introduces and
measures material flow analysis and accounting indicators that reflect the CE core principles
of Refuse, Rethink, and Reduce. The research carried out by Huysman et al. (2015), Huysman
et al. (2017), and Vanegas et al. (2018) has contributed to the development of CE indicators
such as Recyclability Benefit Rate, CE Performance Indicator, and Ease of Disassembly
Metric. Further, in the case of the United Kingdom, a study by Mohamed Sultan et al. (2017)
and Huysman et al. (2017) developed indicators called Recycling Desirability Index and CE
Performance Indicator to measure CE activities in electronic services sectors and post-
industrial plastic waste treatment at the micro level. Several CE indicators have been developed
at the micro level in the Netherlands, including Eco-cost Value Ratio and Value-based
Resource Efficiency Indicator by Scheepens et al. (2016) and Di Maio et al. (2017). A number
of CE indicators, including the Synthetic Economic Environmental and Recycling Desirability
Index, have been developed at the micro level in Italy and India, respectively. Likewise, Bovea
and Perez-Belis (2018) introduced Circularity Design Guidelines for CE development in Spain
at micro level.

Moreover, Jacobsen (2008) proposes the "Kalundborg IS complex" as a measure of economic

and environmental aspects of CE in Denmark, reflecting the CE core principles of refuse,
rethink, and reduce. In South Korea, Park and Behera (2014) developed an indicator called
“Eco-Efficiency Indicator” that reflects the four CE core principles of Refuse, Rethink,
Reduce, and Reuse. Furthermore, Pagotto and Halog (2015) introduce an indicator for the
Australian food industry called "Eco-Efficiency Performance", which reflects the CE
principles core of Refuse and Rethink. In addition, Eurostat (2001) conducted a study in Japan
to develop guidelines on Material Flow Analysis and Accounting to measure CE activities
related to the core principles of reduce and reuse. Haupt et al. (2016) introduced an indicator
of Switzerland's waste management system, namely "MFA of the Swiss waste management

8
system", which reflects the CE core principles of Refuse, Rethink, and Reduce. Last but not
least, “The Global Multiregional Waste-Input-Output Model” introduced by Tisserant et al.
(2017) reflected the CE core principles of Refuse, Rethink, and Reduce at the global level.
To summarize, several studies have been conducted in order to determine and develop global
CE indicators. A number of indicators have been established and gathered by researchers. On
the basis of the CE core strategies called the 9R framework, the indicators can be categorized
into three levels: micro, meso, and macro. These indicators are also classified by such research
according to sustainability dimensions, including economic indicators, environmental
indicators, and social indicators. It is important to note that there have been a number of studies
carried out to develop indicators to measure CE activities, but there have been none that
measure the level of country advancement toward CE adoption. To fill this gap, this study
establishes a regional index to measure the Arab countries' economic transformation toward
CEs.

Circular Economy Framework

In order to make the economy circular, various methods have been developed, known as 9R-
strategies or framework. This includes Refuse, Rethink, Reduce, Reuse, Repair, Refurbish,
Remanufacture, Repurpose, Recycle and Recover. By employing these strategies of
framework, we will be able to contribute to shifting the global economy toward sustainability
(Kirchherr et.al., 2017 and Potting et al., 2017). Closing material loops sustainably has been
made easier with the 9R framework. As the loop closes (lower R), external inputs require less,
and so the strategy becomes more circular. In contrast, as R gets higher, the loop becomes less
circular and less preferable.
A 9R-framework can be broken down into three loops: Shortest Loops, Medium Loops, and
Long Loops. The R-framework's shortest loops are Refuse, Rethink, and Reduce (R0 - R2). As
part of their strategy, they implement smart manufacturing, design for disassembly, and
material passports, which reduce waste during the design phase. Further, there are five medium
loops in the 9R-Framework: Reus, Repair, Refurbishing, Remanufacturing, and Repurposing.
The purpose of these methods is to extend the lifespan of building materials. Among the loops
in the R-framework, Recovery and Recycle (R8-R9) are the longest loops. These are methods
used for transforming waste into products that are considered 'waste' by the industry, which
require energy and technical equipment to add value.

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 Figure (1): The 9R Framework
Strategies
Circular
Make product redundant by abandoning its function or by
Economy R0 Refuse

Shortest Loops
offering the same function with a radically different product.
R1 Rethink Make product use more intensive (e.g. by sharing product).
Higher Level of circularity = Fewer natural resources and less environmental pressures.

Increase efficiency in product manufacture or use by

R2 Reduce
consuming fewer natural resources and materials.
Ruse by another consumer of discarded product which is
R3 Reuse
still in good condition and fulfils its original function.
Repair and maintenance of defective product so it can be
R4 Repair
Medium Loops

used with its original function.

R5 Refurbish Restore and old product and bring it up to date.
Use parts of discarded product in a new product with the
R6 Remanufacture
same function.
Use discarded product or its parts in a new product with a
R7 Repurpose
different function.
: Process materials to obtain the same (high grade) or
Long Loops

R8 Recycle
lower (low growth) quality.
Linear
R9 Recover Incineration or material with energy
Economy

Source: Adapted from Potting et al. (2017)

Construction of CE index

In developing CE index, there are many aspects to consider, including its definition,
objective, framework, methodology, and limitations.

Index Definition
The CE Index is an economic index designed to measure the Arab countries’ degree of
transformation from a linear economy system to a circular economy system. In this index, the
country that scores the highest value has a better track record of achieving the CE
transformation. It indicates that a country's economy can maximize resource efficiency by
reducing waste, maintaining long-term value, reducing primary resources, and closing loops
with products, parts, and materials within a framework that benefits society, protects the
environment, and enhances economic sustainability.

Region's CE index objective

Establishing the CE index in the Arab region is intended to encourage, measure, and assess the
transformation from linear economy to CE, which is expected to result in a number of
advantages. Among them are the reduction of natural resource consumption, the sustainable
extraction of natural resources, and the security of supply of natural resources, the reduction of
waste, the reduction of emissions, the increase in natural capital, the reduction of costs, and the
creation of more job opportunities.

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Proposed CE Index Framework
As shown in Figure 1, the proposed CE index in this study is established following the OECD
inventory of CE indicators (OECD report, 2021), which contains five components, namely
economic and business indicators, environmental indicators, governance indicators,
infrastructure indicators, and social indicators. Each component (main indicator) contains
many sub-indicators. Particularly, economy and business indicators include added value,
business, economic efficiency, economic structure, gains and revenues, investments,
productivity, and savings. an environmental indicator consists of efficiency, emissions, output
material process, production and consumption, savings, and use. An indicator of governance
includes awareness raising, capacity building, collaboration, education, finance, innovation,
pilots, and experiments, monitoring and evaluation, public procurement, regulation,
stakeholder engagement, and strategy and initiatives. An infrastructure and technology
indicator includes indicators for areas, equipment, facilities, and products and services. Lastly,
social indicators that include indicators related to jobs and human resources. The sub-indicators
are measured using several items representing different sectors, such as resources, materials,
water, food, energy, culture, education and knowledge, waste, textiles, built environment,
public administration, agriculture, industry, mobility, tourism, land use, production, forest,
reuse, repair, share (OECD report, 2021). As illustrated in Appendix (I), each sub-indicator is
measured with several items from representing different sector.

Figure (1): CE Index that draw from the OECD inventory indicators (OECD report, 2021).

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 Methodology
The CE index is considered a composite index. There are five main indicators included in the
CE index, which include economic and business indicators, environmental indicators,
governance indicators, infrastructure indicators, and social indicators. Every indicator contains
several sub-indicators, each of which is measured by a different set of items and scales based
on different sectors, and each sub-indicator displays heterogeneous data availability patterns,
as illustrated in Appendix (I). Thus, the process of calculating the CE index consists of four
stages.
First Stage: At this stage, the initial items are converted from their actual values to a range
between (0 to 1) or (0 to 100%). As each item has a different measurement scale and unit of
measurement, such as numbers, percentages, or amounts, etc. In order to ensure the consistency
of all measurements of each item, the unit must be unified. To do so, the initial items must be
standardized by converting them into minimum and maximum values. In this case, the range
of possible values for the item is described: the minimum and maximum. Mathematically, this
can be illustrated by the following equation that described by report on Global Human Capital
2017 of the World Economic Forum.
ܺ௜ െ ܺ௠௜௡
‫ܫ‬௜ =
ܺ௠௔௫ െ ܺ௠௜௡
Where ‫ܫ‬௜ refers to standardized value of the initial item, while ܺ௠௜௡ and ܺ௠௔௫ indicate the
minimum and maximum value for initial item. ܺ௜ refers to the initial item at the base year.
Furthermore, when adopting a standardization or normalization approach, it is very critical to
know the direction of the initial item. Hence, not every increase in the index represents an
improvement, and not every decline indicates a weakening. Thus, to have an accurate
standardization measurement for the initial items value, it is necessary to determine the trend
direction of the item based on its performance, rather than its arithmetic hierarchy. As a result,
initial items that are trending in the opposite direction are represented by the following formula:

ܺ௜ െ ܺ௠௜௡ ܺ௠௔௫ െ ܺ௜
‫ܫ‬௜‫ = כ‬1 െ ‫ܫ‬௜ = 1 െ =
ܺ௠௔௫ െ ܺ௠௜௡ ܺ௠௔௫ െ ܺ௠௜௡

Furthermore, to estimate the standardization values of extreme deviation initial items, you can
use the following adjust logarithmic equation.
ܺ௜ + 1
ln ቀ
‫ܫ‬௜‫= ככ‬ 2 ቁ ‫ כ‬100 െ ܺ௠௜௡
ܺ௠௜௡ െ ܺ௠௔௫
Second Stage: The second stage involves calculating the geometric mean of each item under
each sub-indicator after calculating the standardized value for each item at the first stage:
Calculation of G.M- individual item series:
If x1 , x 2 , x 3 ,......., x n be n observations studied on sub-indicator (X), then the G.M of
the observations is defined as:

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 ଵൗ
G. M = (ܺଵ ܺଶ ܺଷ … … . . ܺ௡ ) ௡

Third Stage: After calculating the G.M values for each sub-indicator in the second stage, we
applied the weighted geometric mean equation to estimate the value of the main indicators of
the CE index.
Weighted Geometric Mean equation is given by:
ଵൗ
௪భ ௪మ ௪య ௪ ே
G. M = ൫ܺଵ ܺଶ ܺଷ … . … . . ܺ௡ ೙ ൯
n
Where N = ¦ w , i.e., total weight and ‫ݓ‬௜ refers to weighted of each individual sub-indicator.
i 1
i

Fourth Stage: At this stage, we calculate the CE index using the weighted geometric mean,
again incorporating all the main indicators.
Weighted Geometric Mean for CE Index is given by the following equation:

ଵൗ
௪భ ௪మ ௪య ௪ ே
G. M = ൫ܺଵ ܺଶ ܺଷ … . … . . ܺ௡ ೙ ൯
n
Where N = ¦ w , i.e., total weight, ‫ݓ‬௜
i 1
i refers to weighted of each individual main indicator.

Below is a diagram (2) that illustrates and summarizes the paradigm process of CE calculation,
which includes the four stages discussed above:

CE Index
࢝૜ ࢝ ૚ൗ
࢝૚ ࢝૛ ࡺ
۵. ‫ࢄ = ۻ‬૚ ࢄ૛ ࢄ૜ … . … . . ࢄ࢔ ࢔

Main Indicators leve

૚ൗ
࢝૚ ࢝૛ ࢝૜ ࢝ ࡺ
۵. ‫ࢄ = ۻ‬૚ ࢄ૛ ࢄ૜ … . … . . ࢄ࢔ ࢔

Sub-Indicators level
ଵൗ
G. M = ܺଵ ܺଶ ܺଷ … … . . ܺ௡ ௡

Items level
ܺ௜ െ ܺ௠௜௡
‫ܫ‬௜ =
ܺ௠௔௫ െ ܺ௠௜௡

Figure (2): Paradigm of CE Index Stages Calculations.

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 Data Collection Process
To understand how well businesses in a country are pursuing the aims of a CE, governments
need to have access to data that measures their CE activities. It, therefore, requires data on areas
of a business that are not traditionally measured, such as the circularity of materials used in
production and consumption, waste management, competitiveness, and innovation. Or, to put
it another way, data on CE activities that reflect sustainability dimensions such as economic,
business, environmental, governance, infrastructure, and social aspects. Data for these
indicators can be obtained by creating surveys that include all the measurement items for each
indicator and the sub-indicator, as shown in Appendix (I). The survey can be distributed to
government statistics departments at the Arab countries' ministries of economy, environment,
infrastructure, technology, education, and other national statistical offices. It can also be
distributed to other Arab institutions, national or local authorities, as well as international
organisations. The collected data will then be evaluated and analyzed using the recommended
method in this study to calculate the CE index in the Arab region. This index can also be applied
by each individual country to determine its level of CE transformation. A survey will be
distributed to the target population of 22 Arab countries in the region as a part of the valuation
of the region index.
Table (2): List of CE Index’s population target
No. Country Ministry Department
1. Algeria Economy, Environment, Infrastructure and Technology and Education Statistics and Information
2. Bahrain Economy, Environment, Infrastructure and Technology and Education Statistics and Information
3. Comoros Economy, Environment, Infrastructure and Technology and Education Statistics and Information
4. Djibouti Economy, Environment, Infrastructure and Technology and Education Statistics and Information
5. Egypt Economy, Environment, Infrastructure and Technology and Education Statistics and Information
6. Iraq Economy, Environment, Infrastructure and Technology and Education Statistics and Information
7. Jordan Economy, Environment, Infrastructure and Technology and Education Statistics and Information
8. Kuwait Economy, Environment, Infrastructure and Technology and Education Statistics and Information
9. Lebanon Economy, Environment, Infrastructure and Technology and Education Statistics and Information
10. Libya Economy, Environment, Infrastructure and Technology and Education Statistics and Information
11. Mauritania Economy, Environment, Infrastructure and Technology and Education Statistics and Information
12. Morocco Economy, Environment, Infrastructure and Technology and Education Statistics and Information
13. Oman Economy, Environment, Infrastructure and Technology and Education Statistics and Information
14. Palestine Economy, Environment, Infrastructure and Technology and Education Statistics and Information
15. Qatar Economy, Environment, Infrastructure and Technology and Education Statistics and Information
16. Saudi Arabia Economy, Environment, Infrastructure and Technology and Education Statistics and Information
17. Somalia Economy, Environment, Infrastructure and Technology and Education Statistics and Information
18. Sudan Economy, Environment, Infrastructure and Technology and Education Statistics and Information
19. Syria Economy, Environment, Infrastructure and Technology and Education Statistics and Information
20. Tunisia Economy, Environment, Infrastructure and Technology and Education Statistics and Information
21. the United Economy, Environment, Infrastructure and Technology and Education Statistics and Information
Arab Emirates
22. Yemen Economy, Environment, Infrastructure and Technology and Education Statistics and Information

14

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The CE Index’s Limitations
Based on an assessment of the list of indicators, as shown in appendix (I), it is evident that the
majority of existing indicators focus on the macro and meso-level measures of inter-economy
and industry flow metrics. In the Arab region, CE strategies can only be monitored at macro
and meso levels due to limited capabilities for measuring and obtaining data on the micro
indicators. This since, neither the data from the country level to the business level is available,
nor are the time and effort constraints from the business level to the industry level, or the
country level, to be able to do this.
As illustrated in appendix (I), the existing items that measure the current sub and main
indicators in the CE index rely mainly on quantitative parameters, like amounts, tons, numbers,
and kilograms, which are numerical in nature. Social and behavioral indicators that look at the
community's attitude toward the CE are less defined and appear in monitoring frameworks less
frequently. By including social behavior items into the CE indicators, a comprehensive
assessment of transformation to CE can be achieved.
Finally, there are not enough items at this level that measure all related indicators to provide a
comprehensive picture of the country's transition to a CE. By including micro and business
level items, a picture of the country's transition will be possible.

Conclusion
In this study, the goal was to develop an index that measures the degree of a country's
transformation from a linear to CE. In establishing the CE index, many indicators and sub-
indicators were adopted based on the available literature. There are five main indicators that
make up the CE index: economic and business, environmental, governance, infrastructure, and
social indicators. Each component is measured by a variety of sub indicators. Finally, each sub-
indicator should be measured by several items. In order to calculate the proposed index, the
four stages or levels are taken into account. In the first stage, study items were normalized
because they measured on different scales, such as numbers, percentages, amounts, tons,
kilograms, etc. A geometric mean method was used to calculate the normalized mean for all
items under each indicator in the second stage, since different items belong to different sectors.
To calculate the main indicators and the final index, weighted geometric means were used in
the third and fourth stages of the study. Thus, by using the CE index, policymakers and
countries in the region will be able to assess their progress towards CE transmission. Due to
the lack of indicators for measuring micro-level activities within CE and community behavior
toward circular economies, the index has such limitations. In future research, expanding the
index to include indicators for measuring CE activities at the micro level and social behavior
scopes will provide a comprehensive picture of the region's transition to the CE.

Recommendations and Policy Suggestions

Taking into account the Index developed by the study, policymakers, regulators, and CE
stakeholders can consider adopting such policies in developing CE in the region.

9 Regulatory laws and legislation are needed to establish and facilitate the
implementations of CE and prevent natural resource waste in the region.

15

15
 9 Indicators for the CE should be developed on micro, meso, and macro levels, reflecting
all aspects of our economy and lives.
9 In order to achieve sustainable development and green economies in Arab countries,
CE strategies need to be integrated into the governments’ economic policies and
frameworks. The process can be facilitated by drawing examples from international
experience.
9 Developing a monitoring framework for CE in the Arab region and establishing a CE
stakeholder platform for exchange experience and related knowledge.
9 Standards and methods for recycling content, recyclability, and repairability in the Arab
region should be developed based on CE standards in developed countries.
9 Creating policies and incentives that encourage the consumption of recyclable products
and services in the region.
9 Changing patterns of production and consumption and utilizing renewable energy
consistent with climatic and environmental changes.
9 Through media outreach and education, we can increase public awareness of the need
to move toward a CE and environmentally friendly policies.
9 A CE database should be built to determine how quickly the Arab region is transitioning
from linear economies to CEs.

16

16
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 Appendix (I): the CE indicators restricted from OECD inventory report 2021

Indicators Sub- Measurement Unit Year References

indicators
Economic and Added value added value of the circular economy Amount 2019 Moraga et al., 2019
Business
indicators Gross value added generated Amount 2017 The OECD Inventory of CE indicators report 2021

Economic value generated NA 2018 The OECD Inventory of CE indicators report 2021

Value added at factor cost (percentage of % 2018 The OECD Inventory of CE indicators report 2021
gross domestic product (GDP) at current
prices)
Business Number of companies with certification number 2019 CETIM, 2019
based on life cycle or eco-design
Increase in the number of enterprises and number 2018 The OECD Inventory of CE indicators report 2021
productivity
Companies implementing products-a- number 2020 CETIM, 2020
service business models
Strategy plan, projects and business number 2021 Naranjo-Molina et al., (2021).
activities involve in repair.
Economic Material intensity Kg/EUR 2018 The OECD Inventory of CE indicators report 2021
efficiency
Domestic Material Consumption per capita EUR/kg 2017 The OECD Inventory of CE indicators report 2021

Generation of waste excluding major Kg/Thous 2019 The OECD Inventory of CE indicators report 2021
mineral wastes per GDP unit
Economic growth of the circular economy % of GDP 2019 Moraga et al., 2019

Economic GDP per Total Greenhouse Gas Emissions PPP/kg CO2 2018 The OECD Inventory of CE indicators report 2021
structure equivalent
Weight of the green economy in GDP NA 2019 Green, P. (2019).

Gains and Economic gains of the reduction of the NA 2018 The OECD Inventory of CE indicators report 2021
revenues digital impact in the local administration
Sales of organic products and local food NA 2019 The OECD Inventory of CE indicators report 2021
products
Economic gains of the reduction of the NA 2018 The OECD Inventory of CE indicators report 2021
digital impact in the local administration
donation and reselling scheme to the city Amount 2018 The OECD Inventory of CE indicators report 2021

Industry turnover in more circular products Amount 2019 Jaurlaritza, E. (2019).

Investments Household spending on product repair and 2017 Magnier et al., (2017)
maintenance
Public expenditure on R&D related to EC Amount 2019 Agenda (2019)

Investment in R&D over the GD % of GDP 2019 The OECD Inventory of CE indicators report 2021

Amount invested in circular economy total amount 2017 The OECD Inventory of CE indicators report 2021
projects
Productivity Degree of productivity NA 2018 The OECD Inventory of CE indicators report 2021

Resource Productivity EUR/kg 2017 The OECD Inventory of CE indicators report 2021

Material Productivity EUR GDP/kg 2018 The OECD Inventory of CE indicators report 2021
DMC
Material Productivity total amount 2019 Moraga et al., 2019

Savings Cost savings Amount 2019 Alhola et al., (2019)

Waste reduction economic savings Amount 2018 The OECD Inventory of CE indicators report 2021

Money saved because of recovery and Amount 2017 The OECD Inventory of CE indicators report 2021
reuse of materials
Savings made by not replacing items of Amount 2017 The OECD Inventory of CE indicators report 2021
clothing
Environmental Efficiency Amount of renewable electricity available NA 2018 Morley et al., (2018).
Indicators to each household
Energy efficiency NA 2017 The OECD Inventory of CE indicators report 2021

Electricity from renewable sources (gross GWh 2018 The OECD Inventory of CE indicators report 2021
production)
Energy intensity TJ 2019 The OECD Inventory of CE indicators report 2021

Emissions CO2 emissions Tonnes 2019 The OECD Inventory of CE indicators report 2021

Greenhouse gas reduction % 2019 The OECD Inventory of CE indicators report 2021

CO2 emissions per capita Tonnes/capita 2018 Morley et al., (2018).

Greenhouse gas emissions per capita NA 2015 The OECD Inventory of CE indicators report 2021

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 Output Materials recovered through reuse and Tonnes 2017 The OECD Inventory of CE indicators report 2021
material recycling
process Percentage of recycled content used in % 2018 The OECD Inventory of CE indicators report 2021
materials
Number of goods reused internally in the Number 2018 The OECD Inventory of CE indicators report 2021
local administration
Repair and reuse of materials Tonnes 2019 The OECD Inventory of CE indicators report 2021

Recycling of biowaste per capita Kg/capita 2019 The OECD Inventory of CE indicators report 2021

Construction waste NA 2017 The OECD Inventory of CE indicators report 2021

Total amount of food waste generated per kg/inhabitant 2019 The OECD Inventory of CE indicators report 2021
year
Waste production Billion Kg 2018 The OECD Inventory of CE indicators report 2021

Production Gross electricity production GWh 2018 The OECD Inventory of CE indicators report 2021
and
consumption Energy consumption (final) toe/inhabitant 2018 The OECD Inventory of CE indicators report 2021

Energy consumption (primary) toe/inhabitant 2018 The OECD Inventory of CE indicators report 2021

Consumption of fossil plastic in the food Tonnes 2019 The OECD Inventory of CE indicators report 2021
sector
Consumption of secondary materials Tonnes 2019 The OECD Inventory of CE indicators report 2021

Material collected in a workshop for the Tonnes 2017 The OECD Inventory of CE indicators report 2021
reuse of building materials
Water consumption million m3 2019 The OECD Inventory of CE indicators report 2021

Savings Material savings tons 2016 The OECD Inventory of CE indicators report 2021

Drinking water savings m3/year 2019 The OECD Inventory of CE indicators report 2021

Use Circular material use rate % 2019 The OECD Inventory of CE indicators report 2021

Direct resource use Billion kg 2018 The OECD Inventory of CE indicators report 2021

Tons of waste biomass used Tonnes 2019 The OECD Inventory of CE indicators report 2021

Governance Awareness- Opening of a workshop for the reuse of YES/NO 2017 The OECD Inventory of CE indicators report 2021
Indicators raising building materials
Publications on the circular economy Number 2018 The OECD Inventory of CE indicators report 2021

Awareness actions on search and Number 2017 The OECD Inventory of CE indicators report 2021
innovation on the circular economy and
their respective impact
Number of events held in collaboration Number 2017 The OECD Inventory of CE indicators report 2021
with the social entrepreneurship
community
Conferences about circular and responsible Number 2018 The OECD Inventory of CE indicators report 2021
fashion
Capacity Guides developed on greater efficiency and Number 2017 The OECD Inventory of CE indicators report 2021
building material productivity for the built
environment
Training courses in renewable energies Number 2018 The OECD Inventory of CE indicators report 2021

Training courses on the circular economy Number 2018 The OECD Inventory of CE indicators report 2021

People trained in the circular economy Number 2016 The OECD Inventory of CE indicators report 2021
fields of activity
Number of conferences organized for Number 2018 The OECD Inventory of CE indicators report 2021
training of municipal staf
Number of start-ups supported by an Number 2017 The OECD Inventory of CE indicators report 2021
innovation platform
Collaboration No. of partnerships with Number 2017 The OECD Inventory of CE indicators report 2021
municipalities/distribution
Collaborative projects implemented by the Number 2019 The OECD Inventory of CE indicators report 2021
Galician network of Circular Economy
Number of meetings of the commission to Number 2018 The OECD Inventory of CE indicators report 2021
develop alternatives to single-use plastic
Number of workshops held to to link up Number 2017 The OECD Inventory of CE indicators report 2021
supply and demand and boost the sharing
economy
Education Students trained in renewable energies Number 2018 The OECD Inventory of CE indicators report 2021

Number of schools and universities that Number 2018 The OECD Inventory of CE indicators report 2021
responded to the call for projects on the
circular economy education
Number of events organised in relation Number 2018 The OECD Inventory of CE indicators report 2021
with pedagogical circular economy
activities
Circular economy researchers Number 2018 The OECD Inventory of CE indicators report 2021

Financing Financial assistance granted to companies Number 2016 The OECD Inventory of CE indicators report 2021
related to the circular economy

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 Budget amount assigned to calls for Number 2016 The OECD Inventory of CE indicators report 2021
projects/living labs carried
out/implemented and number of companies
that have benefited from them.
Number and investment in circular- Number 2017 The OECD Inventory of CE indicators report 2021
economy-related R&I projects
Budget of pilot public contracts in circular Number 2016 The OECD Inventory of CE indicators report 2021
economy
Innovation, Number of experimental projects on the Number 2017 The OECD Inventory of CE indicators report 2021
pilots, and building sector
experiments Collected materials and objects in pilot Tonnes 2018 The OECD Inventory of CE indicators report 2021
projects within cultural facilities of the city
Number of experimental projects initiated Number 2017 The OECD Inventory of CE indicators report 2021

Monitoring Products and construction techniques Number 2019 The OECD Inventory of CE indicators report 2021
and covered by life cycle analysis studies
evaluation Maps of local resources Number 2018 The OECD Inventory of CE indicators report 2021

Tracking the sale of maStudy of the YES/NO 2019 The OECD Inventory of CE indicators report 2021
establishment of waste disposal charges or
other types of financial instrumentsterials
from an Inclusive Recycling Program
Life cycle and cost-benefit studies in waste Number 2019 The OECD Inventory of CE indicators report 2021
management
Public Products/services covered by circularity Number 2017 The OECD Inventory of CE indicators report 2021
procurement criteria in the public procurement
Share of public procurement contracts that % 2019 The OECD Inventory of CE indicators report 2021
include environmental elements above the
EU thresholds
Public procurement contracts with a % 2017 The OECD Inventory of CE indicators report 2021
circular economy dimension
Number of tender books with circular Number 2017 The OECD Inventory of CE indicators report 2021
criteria (production and consumption)
Purchases of products that are reusable or Amount 2019 The OECD Inventory of CE indicators report 2021
include recycled material.
Regulation Number of circular policy advisers Number 2018 The OECD Inventory of CE indicators report 2021
developing circular regulations and change
‘linear’ regulations
Policy process for new circular laws and NA 2018 The OECD Inventory of CE indicators report 2021
regulations
Development of new laws and regulations NA 2018 The OECD Inventory of CE indicators report 2021
that discourage linear practices
Legislative and normative incentives Number 2016 The OECD Inventory of CE indicators report 2021
created
Stakeholder Number of economic actors mobilised for Number 2017 The OECD Inventory of CE indicators report 2021
engagement the development of territorial synergies
between economic actors
Number of economic actors mobilised in Number 2017 The OECD Inventory of CE indicators report 2021
an innovation platform for the circular
economy
Network meetings for circular projects Number 2018 The OECD Inventory of CE indicators report 2021

Participants enrolled in the different Number 2018 The OECD Inventory of CE indicators report 2021
programs for waste prevention
Strategy and Projects incorporating smart design Number 2017 The OECD Inventory of CE indicators report 2021
initiatives
Circular innovation projects Number 2018 The OECD Inventory of CE indicators report 2021

Circular economy vision documents Number 2018 The OECD Inventory of CE indicators report 2021

Number of projects realised through a Number 2017 The OECD Inventory of CE indicators report 2021
platform for the sharing economy
Infrastructure and Area Area of public space recovered for ha/year 2019 The OECD Inventory of CE indicators report 2021
technology sustainable models
indicators Number of recycling centres organised to Number 2017 The OECD Inventory of CE indicators report 2021
supply repair actors
Number of reuse centres in the city Number 2017 The OECD Inventory of CE indicators report 2021

Number of collection points for reuse of Number 2018 The OECD Inventory of CE indicators report 2021
materials
Number of places devoted to repair Number 2017 The OECD Inventory of CE indicators report 2021

Equipment Number of bento boxes distributed to Number 2017 The OECD Inventory of CE indicators report 2021
reduce disposable packaging use
Number of waste collection devices Number 2018 The OECD Inventory of CE indicators report 2021
installed
Change in the amount of bins allocated NA 2018 The OECD Inventory of CE indicators report 2021

Facilities Seed banks (municipal) Number 2018 The OECD Inventory of CE indicators report 2021

Facilities with circular economy criteria Number 2019 The OECD Inventory of CE indicators report 2021

Sectors/facilities assessed as subject to IAC Number 2019 The OECD Inventory of CE indicators report 2021
(Integrated Environmental Assessment

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 Empty houses Number 2019 The OECD Inventory of CE indicators report 2021

Products and New circular products Number 2018 The OECD Inventory of CE indicators report 2021
services
Share of circular products in total number % 2018 The OECD Inventory of CE indicators report 2021
of products
Number of collection devices tested Number 2018 The OECD Inventory of CE indicators report 2021

Social indicators Jobs and Employment in the Circular Economy Number 2017 Magnier et al., (2017)
human
resources PhD and post-PhD grants and contracts in Number 2017 The OECD Inventory of CE indicators report 2021
scientific employment
Direct jobs associated with the forest/wood Number 2019 The OECD Inventory of CE indicators report 2021
sector
Number of green jobs created and secured Number 2018 The OECD Inventory of CE indicators report 2021

Number of jobs created by promoting Number 2017 The OECD Inventory of CE indicators report 2021
circular consumption in the city

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