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Arab spring brings new economic challenges to countries involved

Countries face a major challenge in providing 50 million to 75 million jobs

  • By: Jumana Al TamimiAssociate Editor
  • Published: 13:12 February 10, 2013
  • Gulf News

Dubai: Economic hardships are believed to have sparked Arab revolutions, which continue until today.

And economic challenges are expected to keep haunting the new regimes in Tunisia, Egypt, Libya and Yemen.

All Arab countries, including the debt-laden Arab Spring ones, face a major challenge in providing 50 million to 75 million job opportunities in the next 10 years, according to economic forecasts.

For the time being, “the most important challenge facing these [Arab Spring countries] is the old perception of the state”, said Yemeni political economics researcher Abdul Aghani Al Iryani.

“The old perception says that it is the central state that is the sole financial provider,” he told Gulf News. “It is also the source of bringing wealth to political leaders, while people are not participating [ in the decision making].”

Other challenges include eradicating the high level of corruption from previous regimes, and the lack of present regimes’ experience to rule and govern.

“In Yemen, like in Libya, the old regime has reached [such] a level of corruption, incompetence and inefficiency that any later government, regardless of its capabilities, will face difficulty in meeting economic challenges, let alone [post-revolution] governments that were formed based on political grounds rather than economic and management merits,” Al Iryani said.

“These governments’ ability to implement projects and make a change in the economic situations is very limited, if not nill.”

Moreover, nearly half of the Yemeni budget goes to defence and security organisations constituting another shortcoming of the present regime in Yemen, said Saif Al Asali, former Yemeni finance minister.

Impoverished Yemen, which is among the least developed countries in the world, has nearly $9 billion foreign debt, which constitutes nearly 30 per cent of the gross national product, economists said.

Yemen, as well as other Arab spring countries, suffers from the “excessive lying” by all segments of the society, Al Asali told Gulf News.

“Governments are lying in the promises they make, and the people are lying in their demands,” he said.

On the other hand, the [economic] circumstances are extremely difficult. “The government lacks sufficient experience, while the [economic] issues facing these governments need a long time to be resolved,” Al Asali said.

Some, however, feel that the problems arise from the governments’ failure to embrace change.

For example, in Egypt “part of the old elite was replaced by Islamist elites,” said Saad Hagras, an Egyptian business writer and chief editor of Al Alam Al Youm (The World Today) newspaper in Egypt.

“And the Islamists in power are reproducing the old system and its economic and social policies,” he told Gulf News.

Egypt, the most populous Arab country with a population of 90 million people, has to deal with deteriorating economic conditions amid an augmented foreign debt of nearly $35 billion. Poverty and high unemployment rates were among the main reasons behind the revolution that started on January 25, 2011.

Unemployment among Arab youths ranges between 35 and 50 per cent, while poverty grips nearly a quarter of 300 million people, according to reports.

Some “people think that revolutions are chants in the squares,” Hagras said. “But actually, revolution means new economic policies that are far away from the past and respond to peoples’ demands.”

Revolutions in some Arab countries are expected to impact three social malaises: illiteracy, unemployment and poverty, according to economists.

The path to address these ills is uncertain. Some countries like Egypt and Tunisia have great economic potentials, especially in tourism. But with the presence of hardliner Islamists in power, some economists question the future of tourism in a country like Egypt.

“Investors realise the power in Islamists’ hands and they will stay away from investing in the tourism sector,” Al Asali said.

Both Yemen and Libya, on the other hand, also have good tourism potential.

“If you don’t have the necessary infrastructure for tourism, and this is not only the physical structure, but also the legal infrastructure, tourism cannot constitute a source of income,” Al Iryani said. Building the needed infrastructure requires a long time and cannot be completed overnight.”

Meanwhile, rich Arab countries can financially aid countries with slow economic growth, economists and researchers said.

But the aid should be accompanied by accountability, some of them said during a conference in Dubai on the relations between citizens and governments in the post-revolutions era.

“Responsibility should come with transparency and accountability,” said Lebanese MP Jean Oghassabian during his participation in a conference organised by the Arab Thought Forum in Dubai late last November.

The aid system in the Arab region should change to reflect more accountability, participants in the same conference agreed.

Until then, the Arab countries themselves should develop their own projects to improve economic conditions.

“No economic project deserves to be called such if it does not depend mainly on local sources,” Hagras said. “And this does not annul the importance of foreign relations.”

Yemen, according to economists, was the lucky country to receive the financial support on two levels — regional and international.

“But this is the exception,” Al Iryani said.

Moreover, “there is no consensus among all countries participating in the economic developments in Yemen to focus on building a new nation based on [peoples’] participation and fighting corruption,” he said.

Arab countries have enough sources to provide its people a good life, Al Asali said. But what is required is a set of fair laws that encourage producers and creative people, and not just benefit a certain class of the society.

“The laws of economy do not lie,” he said. “The laws of politics do.”

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