Frozen: Arab Spring economies barely trading with one another

Published March 30th, 2015 - 02:51 GMT

Political and economic turmoil over the last four years caused decline in the volume of Arab exports and imports especially between the Arab Spring countries such as Syria, Libya, Yemen, and vice versa.

According to the Egyptian International Trade Point (EITP) Egyptian statistics, the Egyptian exports to the world 2010reached $ 27,309m, while in 2014 exports amounted $ 24,489m by changing rate (-7%) .Meanwhile, Egyptianimports increased in 2014 to $ 65,536m compared to 2010, which amounted $52.948m by change rate (7%).

Weak trade exchange of Arab Spring countries

Head of Importers Division at the Cairo Chamber of Commerce Ahmed Shiha said the economic movement between Egypt and the Arab Spring countries stopped because these countries’ wealth was assaulted because of some militias in Syria and Yemen, as well as Libya.

Shiha added that Syria was considered one of the exporting countries and now its exports stopped as well as Iraq and Libya.

Egypt’s exports and imports from the Arab Spring countries such as Libya, Syria, Yemen, TunisiaInfluenced by unstable political situation in addition to Egyptian-Turkish relations after June 30, 2013.

In the period between 2010 and 2014, a period of political incidence of strikes and uprisings of the Arab Spring Arab trade dramatically influenced in Egypt, Syria, Libya, Tunisia and Yemen.

Syrian imports exports and with Egypt dramatically affected, Egyptian Exports to Syria in 2014 valued $210.79m compared to $ 667.3m in 2010, a decline rate of 86.4%

While Syrianexports to Egypt in 2010 valued $320.89m, while in 2014 exports to Egypt dropped dramatically, reaching $ 96.45m, with decrease rate amounted 70%.

Egypt’s metal fuel import from Syria was affected, where very little amount not remembering in 2014 compared to $ 3.03m in 2010.

As Libya’s exports to Egypt significantly decreased by severe decline of 89%, as Libya exports to Egypt in 2014 amounted $ 35.73m, while in 2010 the value of exports to Egypt reached$ 327.08m.  Statistics show low Libya’s exports to Egypt from metal fuel significantly compared to 2010, which amounted to a very small percentage do not remembering, while in 2010 exports of metal fuels to Egypt amounted about $ 138.07m.

As for Egypt’s exports to Libya amounted $1045.97m in 2010, either in 2014 amounted $ 558.05m, with decrease rate of 46.6%.

Head of Export Council for Building Materials Walid Gamal Elddin revealed that building materials exports to Libya are dramatically influenced especially Libya is considered the large importer of building materials from Egypt.

On the contrary, building materials export rate is still stable in some Arab countries, such as the Gulf countries and other non-spring countries.

Although this decline, the Egyptian domestic market rebounded since 2014, as a result of governmental social housing projects, which contributed to increase building materials sales.

Yemen did not differ much than Libya, as the unstable and troubled political situation has greatly affected the volume of trade exchange between it and the Arab countries, including Egypt.

As Egypt imported food industries,metal fuel and natural oils worth $ 93.96m in 2010, the value declined to $20.97m in 2014, a decline rate of 77.6%.

Meanwhile, Egypt’s exports to Yemen slightly decreased, with a rate of 0.95% less than 1% , where Egypt’s exports to Yemen amounted to $ 174.07m while the value of its exports in 2014amounted $ 164.63m.

Tunisia is the first Arab Spring countries; exports do not represent a large size for the Arab countries, as Tunisia exports to Egypt Food industry only, which increased by 75.6% as the value of food industries exports amounted $22.46m in 2010, while increased to $ 29.7m in 2014.

While Egypt’s exports to Tunisia decreased to $163.07min 2014, compared to $ 205.67m in 2010, a decrease rate of 20.7%. 

Political relations draw the economic ones

Saudi Arabia enjoys good relations with Turkey, where Turkey is one of the largest importing or exported countries to and from Saudi Arabia. The trade exchange between the two countries increased several times over the last ten years. Each state is considered among the top twenty countries to the other country in terms of trade.

According to  Saudi Undersecretary of the Ministry of Commerce, Industry and Foreign Trade Mohammed Al Kathiri , the volume of trade exchange between Saudi Arabia and Turky during 2011 reached about SR 21 747m . The Saudi exports to Turkey amounted SR 12 555m and its imports from Turkey approximately SR 9192m.

In addition to, 159 joint ventures projects, of which 41 industrial projects with 118 non-industrial projects with a huge capital.

Meanwhile, Arab-Turkish trade balance was affected in some countries due to some political contradicting interests, as Egyptian and Yemeni imports from Turkey has declined by 24%, and decreased in Tunisia by 20% and 5% in Syria since 2011. Turkey’s total export volume not exceeding 1% to 1.5% for Egypt and Libya and Syria.

However, the decline in Turkish exports to some countries in Arab region offset by an exports increase in other countries such as Iran, Iraq and the UAE.


Armed groups threatens the economic integration

Chairman of imports committee at the Cairo Chambers of Commerce Mohammed Hamdi Al-Naggar said that Libyan market is very important for Egypt to export, but there are many obstacles such as the lack of safety in goods transport in the onshore and offshore ways as well.

He added that Libya is largely  goods market  to Egypt but Libya doesn’t export to Egypt except petroleum products.

Head of Agriculture Export Council ali Issa said that Egyptian cargo entering Libya facing a lot of difficulties because there is no government in Libya and there is no authority to negotiate with and some importers and traders taking an adventure of export and import. Therefore, our export from them became very weak due to cargo and persons kidnapping.

Syrian traders and importers also import from Egypt, but by Kuwait and Jordan due to the seriousness of the security situation, Egyptian Agricultural Exports to Syria heavily affected. Egypt exports potatoes and rice but after rice export halt, the exports largely influenced.


Alternative markets for Arab spring markets

Shiha said that Libya, for example, is one of the Petroleum Exporting Countries stopped because of the control of armed groups such as Isis, Jabhat Al-Nusra and others.

“Egypt has many alternatives to overcome the affected exports and imports of petroleum countries to overcome the political and security gap in those countries. As Egypt compensates petroleum imported from Libya to import from Arab Gulf states”, added Shiha.

“ Egypt also import some food industries of Syria has compensated from other countries, in cheaper prices like China, however, Egypt and the Arab countries were benefiting from the common Arab market Agreement in imports and exports movement because of zero Zero customs on raw materials and products”.

Shiha noted that Non-oil consumption imports based on individuals not the government it is still going , as traders from both import and export country take risk on their responsibility on transferring goods and products. With regard to petroleum exports, which rely on the government stopped for lack of a government in some of those countries, such as Libya.

Head of Export Council for Building Materials said that the political disorder heavily affected Arab trade, especially that the Arab market is very important for Egypt and vice versa.

He added that Egypt is trying to find alternatives to the affected building materials exports through opening new markets in Africa, but it will take some time as well as the economic conditions are not so good.

Gamal Elddin said that we are trying to monitor other markets alternative to the Libyan market as it considered the main importer of Egyptian building materials such as Easter Europe as Romania from countries that Egypt is seeking to achieve recovery of the building materials market in it.


Arab Spring affected the foreign currency liquidity

Chairman of imports committee at the Cairo Chambers of Commerce said that he has the political disputes led to a shortage of liquidity in foreign currency because of decline in the trade exchange between Arab world, in addition to increase in the dollar exchange rate and its impact on the local market.

Al-Naggar added that Egyptian trade exchange to Arab Spring countries slightly affected by these political disputes, as the products and materials imported from these countries is not so effective in Egyptian economy.

Egypt is one of the Arab Spring countries that have suffered since 2011 after the January 25 revolution of the major economic problems, notably the decline of the global Egypt rating (Fitch Ratings) , was very low, as well as Egypt had to pay a very big commissions for the banks to import and get loans.


Arab common market cannot yet be the European market

Shiha said it is difficult to achieve an Arab common market on the European market-style, especially in the current period because there are a number of Arab countries suffer from internal wars and disputes. Besides, foreign interference in some other Arab countries so that they do not have a big rule in decision making such as activating this market.


The Arab summit and economic issues

Shiha expects that the Arab summit will heavily focus on political turbulences as a result of the extremist groups control on some parts of Arab countries and a reflection of the political and security relations on economic relations.

The Arab political integration influenced economic integration and that is clear in petroleum Gulf states support for Egypt as well as providing grants and loans, according to Shiha.

© 2022 Daily News Egypt.

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