At a time when people were hoping for the economic situation to improve following the “Arab Spring”, and that the sacrifices given would be economically justified, the opposite happened.
The economic hardships started taking on a snowballing effect, leaving more people unemployed, lowering growth rates and spiking inflation rates.
According to the Arab League, some Arab Spring countries have recorded losses of $120 billion (Dh440.4 billion). The losses are expected to rise further reaching a new record number by the end of 2012.
Despite the fact that there was many causes behind the economic dilemmas in the “Arab Autumn economic” countries, however, one of the main reasons was the absence of professionalism in economic management and politicising it. All the consequences entailed and resulting from this politicising process will affect the development process and the people’s standards of living.
Let us take a few examples of economic politicising process, which does not differ much from economic militarisation, which is also harmful to the development process.
Tunisia
In Tunisia for example, one of the first “Arab Autumn economic” countries, the Governor of the Tunisian Central Bank Mustapha Kamel Al Nabli was sacked by a government resolution without the prior approval of the Tunisia’s presidential party.
Al Nabli was sacked despite being a first class professional and banker, who was awarded the best central bank governor award in May 2012 by the impartial African Bankers magazine. Al Nabli was replaced by Al Shazly Al Ayari, an 80 year old man who runs the financial policy with the mentality of the 1970s. This decision was criticised by the credit rating agency Moody’s.
The reason for the dismissal was “professional”, as Al Nabli refused to take unprofessional decisions of a political and electoral nature which suit the policy of the ruling party; while the governor’s point of view was that these decisions he refused to take would harm the Tunisian economy and the limited financial resources of the country.
This dismissal was preceded by the resignation of Mohammad Abbu, Minister of Administrative Reform in June, and the resignation of Hussain Al Dimasi, Minister of Finance, because the new government tried to apply administrative and financial policies that do not commensurate with the safety standards of proper finance. The new government members sought to push towards a political elections’ oriented economy according to the resigned minister of finance.
As for the remaining “Arab Autumn economy” countries, we find unprofessional procedures in abundance, starting with the choice of prime minister, directors of important financial and investment administrations which require highly professional individuals to run it in a manner which fits the era of the internet and globalisation and have nothing to do with political affiliations of this party or that.
Independent institutions
In this context we can point out the independence enjoyed by Central Banks in the West, such as the European Central Bank and the Federal Reserve Bank. Both the American Government and President have no hand in the resolutions and decisions issued by these institutions that enjoy a professional status. The president has no right to intervene in the decision making process of these institutions, even if these resolutions contradict the policies of the President.
Mitt Romney announced last week that he was displeased with the monetary policies of the Federal Reserve Bank Chairman, Ben Bernanke, and added that he would strive towards appointing a new chairman once Bernanke’s term is over in 2014, and not once he is elected as US President two months from now. This is because the US President does not have the right to fire the Federal Reserve chairman, despite the broad range of authority given to the President, such as the right to issue serious decisions like waging wars and carrying out military interventions.
Here lies the difference between administrations and governments that abide by professional standards, and countries that politicise their economies. Countries that abide by professional standards use these standards as a basis for their success in the way they address economic and financial matters.
Countries that politicise their economies, on the other hand, lead their nation’s economy into repeated crises due to the absence of professionalism, and excluding people with rare skills that can contribute to the development of the country, and raising standards of living and growth while keeping away from political disputes and polarisations. Political disputes have severely harmed development in developing countries, in Arab countries in particular.
Global changes
Therefore, the Arab Autumn economy requires professionalism to transform into a spring that can fulfil the wishes and ambitions of the people to raise standards of living and building a growing economy that can compete in the international markets. Such a growing economy can also provide more job opportunities and fulfil the needs of the people. This professionalism needs to be managed according to the rapid changes taking place globally, and away from slogan and partisan disputes.
Only then can the long-awaited rewards be gained by the people. Unfortunately, Arab spring countries are not going down this path. It is expected that brain drain rates will increase as such talents cannot work in an unprofessional manner, which means that this will be followed by more economic collapse, unemployment, and decline in standards of living in these countries.
Dr Mohammad Al Asoomi is a UAE economic expert.
