Is it clear where the Arab economy is heading? This question should be answered while taking into consideration that economic factors were amongst the basic triggers of revolutions in the region?
Let us start with Tunisia and Egypt, the two most positive cases as far as relative stability and a promising political future are concerned. Despite the wide gap that separates the two countries, the general circumstances through which both are going are not that different, especially if we overlook the difference in status and influence.
Tunisia and Egypt did sustain substantial losses in many of their sectors. This especially applies to tourism, one of the most important sources of national revenue in both countries and which offers a wide range of job opportunities and guarantees the constant flow of foreign currency into the national economy. Tourism brings to Egypt 12 billion dollars which is 11 percent of its national revenue while it constitutes 15 percent of the Tunisian economy.
Egypt’s future is promising yet its economic situation is greatly dependent on the completion of the democratic process and the return of stability, both of which require radical changes on the ground.
Both Egypt and Tunisia have what it takes to attract investment even though this is not the case at the moment. The two countries need to develop their infrastructure, reform investment laws, and offer stability-related guarantees.
Meanwhile, observers are closely watching what new governments in the region, including Morocco, will offer in terms of opening their markets and allowing for more investment as well as creating the proper atmosphere to achieve economic growth.
Libya is expected to fare better than Egypt and Tunisia because of its oil wealth. Oil makes up 96 percent of Libyan economy and is a guaranteed source of foreign currency and a means of attraction for foreign investors.
But let us remember that Libyan economy has never had well-defined features owing to the absence of a budget and lack of transparency in addition to Qaddafi’s full control over the country’s resources. Any future change is extremely important for restructuring Libyan economy. It is also noteworthy that unemployment rates in Libya are on the rise and that around one third of the Libyan people live under poverty line.
In Yemen, the already worn out and collapsing economy seems beyond redemption and the future seems bleak with poverty and corruption dominating the scene. According to local forecasts, the budget deficit in Yemen in 2011 had reached 3.75 billion U.S. dollars and the construction sector, in which around a million Yemenis work, is in a state of stagnation and hundreds of thousands lost their jobs. The only hope for Yemeni economy is the possible support from rich neighboring countries, the Gulf nations.
The situation in Syria makes predictions about its economy very hard at the moment, yet we cannot overlook the tremendous pressure the Syrian lira is currently facing and the halt of remittances from outside the country in addition to strict American and European economic sanctions. However, the humanitarian crisis and the security situation are taking precedence over economy at the time being.
In Bahrain, the focus is now mainly on offering job opportunities and solving housing problems while calls for political reforms are still ongoing.
As for Gulf nations, they are now faced with the urgency of creating a free market that should provide more job opportunities for citizens of all Gulf nations and wage an all-out war on financial and administrative corruption.
The writer is Head of Media at Al Arabiya. This article was first published in al-Jazirah on February 19 and translated from Arabic by Sonia Farid