Anybody closely following the movement of funds to and from the Arab world will have noticed a number of disturbing phenomena:
Firstly, more than one third of investments from Arab Spring states are no longer being invested domestically, rather these funds are being invested abroad, whether we are talking about in foreign banks or foreign investment funds.
Secondly, direct investment in Arab Spring states decreased by two-thirds over the past two years. These states are now primarily relying on funds from citizens living abroad or loans, grants and aid from foreign countries or international institutions.
Thirdly, the Arab tourism sector has been strongly affected, particularly in countries that are experiencing political tensions and security instability, like Egypt, Lebanon, Syria and Tunisia. The income from tourism is essential for these countries and approximately 40 percent of the local population benefit from the tourism industry, whether directly or indirectly.
Fourth, many business owners in these countries are now prepared not just to freeze their operations or stop their expansion plans, but rather to completely get out of the labour market altogether.
The present situation in many of these states has seen investors being prepared to sell their factories, companies and shares at as much as a 50 percent discount in return for immediate and up-front payment, on the condition that these payments are made outside of the country. This is because the central banks in the Arab Spring states are imposing heavy taxes on money transfers abroad.
As for real estate, on the surface the real estate market seems to have remained level, however when it comes to the stage of serious negotiations it becomes clear that we are in a “buyer’s market”, rather than a “seller’s market”. In addition, the dollar is a big incentive when it comes to this.
I am well aware of what can be described as many people having no choice but to sell off their shares or real estate in the recent period, and this is something that has no basis in logic or religion.
Therefore the Arab Spring has led to an economic autumn!