The signs for fresh green growth as a consequence of the much vaunted Arab Spring are slow in arriving.
In Egypt, the economy already battered by the revolution may have lost 1.7 billion $US according to Egypt’s Central Agency for Public Mobilisation and Statistics , loss of export earnings and as a direct hit on the loss of investment and the damage done to tourism but far more serious has been the bleeding of local capital.
The continued unemployment rate has worsened, aggravated by the forced return of one million migrant workers fleeing the violence in Libya. According to the Al Harat news agency, in the first 3 months of the year an estimated $US30 billion taken out of Egypt -about one third of the foreign reserves. Those responsible have been in part the nervous businessmen anxious to avoid what they see as likely prospects for downturn in the economy. That the Egyptian stock market is now trading at about 25% lower than the situation before the revolution suggests their worries were justified. It should also be remembered that the immediate triggers for the revolution of rising food prices, high unemployment for the young and a government seen as out of touch with the disenchanted remain as unresolved problems.
While it is true that the US promise to safeguard US business interests to the tune of $US2 billion dollars will undoubtedly help a little but this is unlikely to make a significant difference to the underlying problem.
Elsewhere in the other so called Arab Spring territories, the signs are also negative. Lebanon, Tunisia, Syria, and Yemen join Egypt in going from an average annual growthg of 4.4.% into negative territory with Yemen and Libya apparently having the worst prospects.
We might also do well to remember that the countries in the Middle East are dependent on one another (and the good will of the large producing nations) for food and water security. Instablibity in the key countries through which the water ways like the Nile flow, is bad news for those in parched territory particularly when it is remembered that the world surveys of water resources typically rate as ‘extreme risk,’ with countries in the Middle East and North African (MENA) nations as being most at risk. One survey I read recently (“The Water Stress Index”: produced by Maplecroft) placed the following in order as being most vulnerable: Bahrain (1), Qatar (2), Kuwait (3) Saudi Arabia (4) Libya (5), the disputed territory of Western Sahara (6), Yemen (7), Israel (8), Djibouti (9) and Jordan (10) topping the ranking. Similarly food where much of the food comes from outside the country is dependent on political stability and economic good heath for continued supply. The Arab Spring may well be helping the voice of the people be heard, but only the wealthy and secure can afford the luxury of placing democracy ahead of the means to live. Looking further afield, the free market may be highly valued by the wealthy exporters of food but the lack of control mechanisms on the current highly volatile world food prices is a huge price to pay in terms of what happens to food supply for the vulnerable.
As predicted in my first post at the beginning of the Arab Spring, post revolution euphoria is clearly premature. While it is true that some of the Governments in the region have started to take more notice of the voice of the people, it is far from clear that the first signs of growth show sign of promise.