Paying the Price of Arab Revolt
Will “revolution tourism” bring dollars to Egypt?
The continuing unrest in the Middle East and North Africa will lead to higher commodity prices and disruption to economic growth for many countries in the region, the IMF said in its April 2011 Regional Economic Outlook for the Middle East, North Africa, Afghanistan and Pakistan (MENAP), released on 27 April 2011.
While oil exporters will enjoy a windfall, a difficult economic year looms for oil-importing states, the IMF predicts.
The report comes in the wake of a joint call for urgent support for Middle East economies by the World Bank and the IMF, who warn that political upheavals in the region could throw the global economic recovery off track.
Eventual Growth After Initial Disruption?
In the short term, many Middle East and North Africa (MENA) countries face multiple pressures caused by growing unemployment, rising commodity prices and disrupted economic activity.
But in the long run, "the uprisings could give a boost to the economies in the region by setting a more inclusive growth agenda, improving governance, and providing greater and more equal opportunity for its young and growing population," Masood Ahmed, Director of the IMF’s Middle East and Central Asia Department, said at a press conference in Dubai to launch the report.
"The immediate challenge facing oil-importing countries in the Middle East is to maintain social cohesion and macroeconomic stability in the face of multiple pressures," he added.
Oil, Food Prices Major Factors Affecting Growth
"Two major factors are driving the current scenario: the unrest in the region and ensuing uncertainty, and the surge in global fuel and food prices," says the IMF.
The IMF report projects overall growth in the MENAP region at 3.9%.
The economies of the oil-exporting countries - Algeria, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, Sudan, the United Arab Emirates and Yemen - are expected to expand by 4.9%, mostly through higher oil prices and oil production, although those projections exclude Libya.
The combined external current account balance for regional oil exporters is expected to more than double to $380 billion in 2011.Continued on the next page