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From Spring to Autumn and Winter - ASHARQ AL-AWSAT English Archive
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It seems that talk about the” Arab Spring”, and the freedom revolutions that came with it in different Arab countries, also necessitates talk about the “Arab Winter”, or the painful economic realities on the ground. There is now growing talk about the need to prepare a new “Marshall Plan” for the Arab world, in order to deal with the consequences and results of the Arab Spring. The “Marshall Plan”, as it has become known, was the proposal put forth by the U.S. Secretary of State in 1948, in order to relieve and rescue Europe after World War II, and provide large financial incentives to promote the economy. The volume of financial support at the time was around US$13 billion, directed to develop industry and agriculture, reduce trade barriers between countries, and foster political coordination. The plan worked with great success, and after only a matter of years in 1952, all countries involved in the “Marshall Plan” had economies recording positive growth at a rate of 35 per cent above pre war levels. This was the European boom.

In today’s rates, if we translated the US$13 billion into its present value, the affected Arab region would require US$670 billion. Of course, none of the 8 major global economies are talking of numbers such as this, rather they are talking today about an amount of approximately US$30 billion, in addition to the US$10 billion and US$4 billion pledged respectively by Qatar and Saudi Arabia to Egypt. There are many urgent and necessary requirements, and these needs vary according to the negative state of the sector or country concerned. In Libya, for example, there is an alarming need for the reconstruction of entire cities destroyed by military bombardments, such as Misrata, Az Zintan, Zawiya and Zliten. Likewise, there is a need for the expansion and reform of hospitals, refineries and government buildings. Yet what makes Libya’s task somewhat easier is the existence of private funds reserved for the state in different international banks around the world, in addition to Libyan oil revenues as the sector is expected to return to production and exportation by 2012.

In Egypt the needs are different, and they relate to support for basic food commodities due to high prices and generally low incomes, as a result of the worrying stagnation of the tourism industry and its services, which has led to tremendous pressure being put upon foreign exchange reserves, and substantial withdrawals being made. Egypt “refused” to respond to a funding offer from the World Bank and the IMF, because of public pressure to reject such a proposal. This comes as a result of years of an abnormal relationship between Egypt’s former regime and the two financial institutions.

Yemen is another country which has very urgent developmental demands, relating to the improvement of infrastructure and reducing unemployment. The same applies to Tunisia, where the rate of unemployment has reached a worrying stage, whilst the level of tourism is yet to improve, which was always the most important element of national income for the economy there.

Syria, where the regime is breathing its last breath, will soon be another candidate to receive economic support. It urgently needs to develop all its sectors without exception, after the current regime prohibited the country from a normal life and normal economy. Unemployment remains the most serious concern in the Arab world and is concentrated mainly in the youth sector, with unemployment in this category reaching 40 per cent in Jordan, Lebanon, Morocco and Tunisia, and even up to 60 per cent in Egypt and Syria. Without doubt this is a catastrophic rise. Likewise the rise in food prices is astronomical, which means that there is a serious flaw in the concept of food security in the economies of Arab countries. In addition to this, spending on infrastructure in the economy of Arab countries amounts to barely 5 percent of total public revenue, while emerging economies are spending an average of 15 per cent. This explains the deterioration of airports, roads, ports, public buildings, schools and hospitals in the Arab world. Economic growth has barely reached 3 per cent in the best of circumstances, although oil prices continue to rise over US$100 per barrel, and oil is still the most powerful engine for the region’s economy. However, the economic challenge is extremely worrying, and if we do not become aware of this then spring will turn into a very long autumn and winter.

Hussein Shobokshi

Hussein Shobokshi

Hussein Shobokshi is a businessman and prominent columnist. Mr. Shobokshi hosts the weekly current affairs program Al-Takreer on Al-Arabiya, and in 1995 he was chosen as one of the "Global Leaders for Tomorrow" by the World Economic Forum. He received his BA in Political Science and Management from the University of Tulsa.

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