Political turbulence sweeping the Middle East and North Africa (Mena) will benefit the people only in the long term as the events have already weakened some economies, aggravated unemployment and hit their fiscal balances, the Arab League Secretary General has said.
Nabil Al Arabi said unemployment and poverty were among the main factors which triggered the turmoil in some regional counties, adding that the deterioration in social services hastened such incidents.
Speaking at a banking conference in Abu Dhabi, Al Arabi said nearly 40 per cent of the people in some Arab nations are under the poverty line while around 14.2 million citizens are unemployed in the region.
“The repercussions of the revolution in some Arab countries could extend over the short and medium terms but will produce positive results in the long term,” he told the conference of the Union of Arab Banks (UAB).
He noted that the International Monetary Fund has revised down its forecasts for the Arab GDP growth to four per cent in 2012 from 5.1 per cent in 2011.
In another address, UAB chairman Adnan Yousuf agreed that regional turmoil, dubbed “the Arab Spring” has negatively affected countries hit by unrest and spilled over to other states in the Middle East.
He said the conflict in Libya had left nearly 1.2 million people unemployed, most of whom are from Egypt and Tunisia.
“The economic costs of the Arab countries which were hit by unrest were very high after they were deprived of revenue generated from oil exports, tourism, investment and other sectors…Egypt and Tunisia were the main victims as their stock market plunged by at least $37 billion,” he said.
“All these repercussions have led to a weakening in those Arab economies, an expansion in their financial imbalances, mainly balance of payments and budgets…there should be urgent measures to face such consequences, considering that nearly 100 million Arabs live under the poverty line and more than 40 million are suffering from malnutrition because of lack of food.”
Yousuf said many regional countries are also suffering from a drop in per capita income due to a population growth and GDP fall, adding that this has also led to a sharp rise in joblessness to more than 50 per cent in some members.
In recent remarks, a prominent banker in the region warned that the economies of Arab nations hit by unrest would worsen in the short term, adding that this should prompt them to draw up a road map for reforms.
While political changes were relatively rapid, economic policies will take time before any results can be felt by the people, said Henry Azzam is the Chairman of Deutsche Bank for the Middle East and North Africa.
Writing in the London-based Saudi Arabic language daily 'Al Hayat', Azzam urged Arab government to stop “giving bright promises which only serve to raise the ceiling of expectations by their people.”
“Economic condition in these countries could deteriorate before they improve during the transitional stage…implementation of stated economic policies will take time and this should prompt governments to chalk out a road map and a clear framework to achieve the aspired results,” he said.
Azzam, author of several books on Arab economies, said new Arab governments can tackle corruption, upgrade transparency, support small and medium enterprises, ensure better social protection, trim debt and reduce poverty in a relatively short period of time.
“But implementation of economic policies announced during the transitional stage will take time before their full results began to be felt,” he said.
“Managing the expectations of the public, particularly the youth, will help governments persuade them to be patient and accept sacrifices in the short term in order to reach a better economic and social situation in the future.”