Published 23:25 IST, October 28th 2019
Social unrest hindered economic growth in Arab countries: IMF report
Social tensions and constant upheavals have hindered economic growth and gave way to unemployment in Arab countries, said the International Monetary Fund.
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Social tensions and constant upheavals have hindered economic growth and gave way to unemployment in Arab countries, said the International Monetary Fund (IMF) on Monday. The IMF said that since 2010 several incidents of violent protests were reported in regions of Arab countries which eventually turned into destructive civil wars in Syria, Yemen and Libya. The wars had major consequences and impact on the people and contributed to unemployment and slow economic growth. These situations are only getting worse with time.
Unrest in Arab countries led to slow economic growth
In a report published by the regional economic outlook, the IMF said that the unrest is, in turn, contributing to slower growth in the Middle East and North Africa (MENA) region, alongside global trade tensions, oil price volatility, and a disorderly Brexit process. The IMF reported that Arab Nations including Iran witnessed 0.1% growth in 2019 as compared to 1.1% last year. The report gave its forecast for the Arab Nations like Saudi Arabia, Iran and the United Arab Emirates which are ranked with the highest GDP in the region. IMF reported that forecast is dependent on several global factors and might suffer a downside.
Rate of unemployment exceeds 25-30%
Jihad Azour, the IMF’s director for the Middle East and Central Asia said, “The level of growth that countries in the region are having is below what is needed to address unemployment." In an interview with a news agency, Azour also said, “We are in a region where the rate of unemployment at the youth level exceeds 25-30% and this requires growth to be higher by 1-2% in order to make a dent in joblessness."
Demands of change in political system led to economic stagnation
As per the statistics mentioned in the report, “Unemployment averages 11% throughout the region versus 7% across other emerging market and developing economies”, further mentioning “Women and young people are particularly likely to be out of work, with more than 18% of women... without jobs in 2018.”
In a new series of protests in countries like Sudan, Iraq, Lebanon, and Algeria, people have asked for economic reforms and strict action against incidents of corruption. Due to constant protests demanding change in political systems, countries like Lebanon have witnessed economic stagnation over the past few years. Azour said, “the government has to act firmly and swiftly in order to address those imbalances, bring confidence back by addressing the fiscal situation, and lower expenditure."
Reportedly, the IMF also said that public debt levels were very high in many Arab countries — exceeding 85% of gross domestic product (GDP) on average, with rates of more than 150% in Lebanon and Sudan. "There is an increase in the public debt levels in the Arab countries affecting the economies. Having built over many years, the cost of public debt burdens has become sizeable, preventing investments critical to the region’s long-term economic future,” it said
15:51 IST, October 28th 2019