Arab Spring Economies: Unfinished business
In an article on the Arab Spring economies The Economist reflects on the small traders of North Africa as an Egyptian fruit seller explains how he cannnot make ends meet, credit is hard to come by and costs are rising. the government has failed to introduce a growth policy to create jobs. A year ago the self immolation of Mohamed Bouazizi in Tunisia brought revolutions in Tunisia, Egypt and Libya which toppled the established order.
Source : https://www.marocafrik.com/english/Arab-Spring-Eco...
The protests were motivated not just by a desire for political freedom and the righty to free expression but also by public frustration with unemployment and economic stagnation. The Economist remarks that despite the triumph for freedom initiated by Mohamed Bouazizi, the revolution he inspired has been the casue of an economic downturn. Tunisia's growth in 2011 went from 3 per cent to zero. The Tunisian government said the economy cdontracted by 1.8 per cent and President Marzouki and Prime Minister Jebali have appealed for an end to strikes and sit ins. Egypt saw a decline from 5 per cent to 1 per cent and has requested an emergency loan of $ 3.2 billion from the IMF. Libya 's economy is reckoned to have contracted by 50 per cent as the oil industry was shut down ( although oil production is edging back up to pre civil war levels according to NOC) and the Libyan Reserve Bank governor estimates that the uprising aginst Gaddafi cost Libya $ 15 billion in damage.
In Egypt inflation is rising and Egyptians are depositing less money in banks fearing a devaluation.The official estimate of unemployment is that it has risen from ten to 15 per cent and youth unemployment is thought to be at least 25 per cent. Tourism in Egypt , Libya and Tunisia has been hard hit causing yet more unemployment and FDI has largely dried up. In Tunisia it dropt by more than a quarter with an analyst saying that 120 firms were shut down with a loss of 40,000 jobs. In Egypt it dropped from 6.4 billion in 2010 to $500 million in 2011 and in Libya FDI has fallen from $3.8 billion to virtually nothing.
However, The Economist points out that there are also encouraging signs, ENI will invest $600 million in Tunisia this year, Libya is attracting business delegations in the race to rebuild devasted cities like Misrata and to restore infrastructure, helped by oil companies. high level business delegations from the UAE,France,the UK, Germany and others have visited Libya.
Entrepreneurs see benefits in governments responsible to the people, a decline in the old cronyism and corruption which bedevilled the private sector under t(he former dictators. Tunisia has a highly educated workforce and good infrastructure. Libya has the worlds eighth largest oil reserves and Egypt has a largeconsumer market. There is optimism amongst investors but few deals have been signed.
The Economist lists four main reasons for the downturn in investment in the post Arab Spring countries. The first is instability, real and imangined which has undermined business confidence. Libya is largely lawless and militas have failed to disarm. Tripoli is beginning to resemble Baghad in teh early days and security firms are send in their operators to Tripoli. Egypt has seen the withdrawal of demoralised police from many areas and deaths and gun battles. Even relatively stable Tunisia has sen some gun battles and distubances.
The second reason is strikes which are a manifestation of democracies but threaten the success of the revolutions. Thirdly government machinery is weak and bureaucracy and inefficiency are rife. Moreover leaders are reluctant to sign off on deals for which they may be held accountable later.
Finally the deals of the previous regimes are associted with croyism and corruption and this taints the privatisation process and causes further delay as new governments investigate past corrupt deals. Governments are trying to meet voter concerns but their plans for economic growth resemble wishlists. The real work of encouraging the private sector and slimming down the public sector which will mean job losses has yet to begin and represents the real challenge for post Arab Spring governments .
Bloomberg carries a similar report on the post Arab Spring situation and Florence Eid, the London-based chief executive officer of Arabia Monitor, is quoted as saying " There is a distinct possibility that we get regression before we see progression,” and “People are frustrated because the reasons that they revolted against to begin with are still there. Whoever said this was going to be smooth was naive.”
In Egypt inflation is rising and Egyptians are depositing less money in banks fearing a devaluation.The official estimate of unemployment is that it has risen from ten to 15 per cent and youth unemployment is thought to be at least 25 per cent. Tourism in Egypt , Libya and Tunisia has been hard hit causing yet more unemployment and FDI has largely dried up. In Tunisia it dropt by more than a quarter with an analyst saying that 120 firms were shut down with a loss of 40,000 jobs. In Egypt it dropped from 6.4 billion in 2010 to $500 million in 2011 and in Libya FDI has fallen from $3.8 billion to virtually nothing.
However, The Economist points out that there are also encouraging signs, ENI will invest $600 million in Tunisia this year, Libya is attracting business delegations in the race to rebuild devasted cities like Misrata and to restore infrastructure, helped by oil companies. high level business delegations from the UAE,France,the UK, Germany and others have visited Libya.
Entrepreneurs see benefits in governments responsible to the people, a decline in the old cronyism and corruption which bedevilled the private sector under t(he former dictators. Tunisia has a highly educated workforce and good infrastructure. Libya has the worlds eighth largest oil reserves and Egypt has a largeconsumer market. There is optimism amongst investors but few deals have been signed.
The Economist lists four main reasons for the downturn in investment in the post Arab Spring countries. The first is instability, real and imangined which has undermined business confidence. Libya is largely lawless and militas have failed to disarm. Tripoli is beginning to resemble Baghad in teh early days and security firms are send in their operators to Tripoli. Egypt has seen the withdrawal of demoralised police from many areas and deaths and gun battles. Even relatively stable Tunisia has sen some gun battles and distubances.
The second reason is strikes which are a manifestation of democracies but threaten the success of the revolutions. Thirdly government machinery is weak and bureaucracy and inefficiency are rife. Moreover leaders are reluctant to sign off on deals for which they may be held accountable later.
Finally the deals of the previous regimes are associted with croyism and corruption and this taints the privatisation process and causes further delay as new governments investigate past corrupt deals. Governments are trying to meet voter concerns but their plans for economic growth resemble wishlists. The real work of encouraging the private sector and slimming down the public sector which will mean job losses has yet to begin and represents the real challenge for post Arab Spring governments .
Bloomberg carries a similar report on the post Arab Spring situation and Florence Eid, the London-based chief executive officer of Arabia Monitor, is quoted as saying " There is a distinct possibility that we get regression before we see progression,” and “People are frustrated because the reasons that they revolted against to begin with are still there. Whoever said this was going to be smooth was naive.”
Source : https://www.marocafrik.com/english/Arab-Spring-Eco...