The popular uprisings that have swept the Arab world this year have slowed economies across the region, and jobs, better governance and investment are needed, speakers at the World Economic Forum in Jordan said Saturday.
Jordanian King Abdullah said at the opening of the forum on unemployment, economic stagnation and other problems – some of which sparked the uprisings across the Middle East and North Africa – that the region needs to create 85 million jobs soon. “This year’s events have opened the way to positive change, but in many places, also created painful economic dislocations. Strategies are urgently needed, and they must take place across the board – in economic life, in politics and policies, in social life and cultural values,” he said.
In Yemen, for example, where two in three people survive on less than $2 per day, at least 40 percent of the population suffers from illiteracy and high unemployment.
“The biggest challenge facing the Arab world … is better governance and investing in education that allows us to compete and raise living standards,” said Mohammad al-Shaya chairman of Kuwaiti Shaya group.
The International Monetary Fund recently said that the uprisings have cost the most affected countries more than $55 billion, but the resulting high oil prices have strengthened other producing countries. It said countries that had seen the bloodiest confrontations – Libya and Syria – were bearing the economic brunt, followed by Egypt, Tunisia, Bahrain and Yemen. “In the short term it is like major surgery and then recuperation, but in the long term it will lead to stability and it will make the region attractive to investors,” Ismail Tahboub, CEO of Jordan Dubai capital investment firm, told Reuters.
The ongoing unrest has badly damaged tourism and foreign investment in the Middle East, undermining economic growth. But investors said the region would eventually prosper. “We are witnessing a period of transition but it is mainly positive,” said Danny E.Sebright president of the U.S.-UAE Business Council. “Anytime you have a reform movement looking for transparency and openness, the outcome will be positive at the end of the day,” he told Reuters on the sidelines of the conference.
In Egypt, nine months of turmoil has knocked some 4.2 percent off gross domestic product with public expenditure rising to $5.5 billion as public revenues fell by $75 million. The impact of unrest is hard to ascertain in Syria, but the IMF report suggested a total cost to the Syrian economy of some $6 billion or 4.5 percent of GDP.
Tunisia has lost $2.0 billion from its GDP, roughly 5.2 percent, and the government has increased expenditure, pushing its fiscal balance into the red.
“In the long term the Arab Spring is good, but in the short and medium term its effect will be very negative,” said Iman Bibars, head of the Cairo-based Association for the Development and Enhancement of Women, citing record-high unemployment as well as inflation.