The the privileged role of the Egyptian Army in

The Arab Spring came to live in early 2001
significantly changed the political arena of the MENA and North
Africa region. The countries that had revolutions are Tunisia,
Egypt, Libya, Yemen, Syria and Bahrain. These countries are the
main Arab Spring countries which had the
major protest against their regimes, but there are others that had
small and controlled protests or their governments acted too early to
suppress it such as Jordan, Morocco, Saudi Arabia and
Kuwait. This paper will mainly discuss the countries that affected the
economy critically. A hope was given to Arabs to begin a
democratic transition and economic welfare from
the Arab Spring. The political factor was the main motivator of
these uprisings to have more political freedom, and economic issues were
equally important factors. The dangerous mixture of corruption, widening
income and wealth inequality and high unemployment in undemocratic
regimes of MENA and North Africa region created popular
uprisings. The people of these countries thus anticipated that
their leaders will immediately solve their economic
and political demands. Unlikely, politics was the major issue,
not the economy that been made as a secondary issue in the previous three
years. The governments were tackling political issues as their primary
policy that should be solved to maintain their stability then they turn their
attention to the economic issues. In fact the governments of Arab
transition countries lately acknowledged
that political stability are connected
to economy, thus it’s hopeless to
have political stability without
stable economy. Before the revolutions some Arab states were trying
to liberalise their economy and privatising their public sector and discussed
it with IMF and WB. For example, Egypt under
President Hosni Mubarak perused by the IMF and World
Bank to liberalise the economy. Moreover, IMF and similar
institutions advised Egypt to fight high levels
of corruption and stop food subsidies, but Egypt did not
answer IMF call. The problem
with Mubarak’s corruption was that his family and friends are
involved heavily in this corruption of the state, so he will not
fight it as the IMF advised him to
do. Egypt during Mubarak was achieving great economic
growth but there are high gap of inequality between the poor and the reach
people (Majbouri, M, 2017). Another problem was the preservation of
the privileged role of the Egyptian Army in the economy, which control a large
part of the government and work for his interest. For example, the retired
military officers can take important chairs in state corporate sector and
companies (Malloch-Brown, 2011). The reasons behind
the Arab Spring are mostly in the lack of jobs and equability of
economic growth distribution in the Arab world. The Business
elite that have close ties with Arab governments grab the lion’s
share of the GDP of the state for their own interest. As a result it’s not
a surprise that these economies are in the same trail as the
political system (Malloch-Brown, 2011). It is difficult to see how,
not including privatisation of weekly run state projects and
decreasing of too large public sector, these can be interrupted and fail
to end inequality, reducing poverty and employment, thus in
the end this will lead to revolts. The economy of
Egypt is a
rentier state economy. Rentier state economy means
that the state is dependent on non-renewable sources, or
service; such as, oil, gas, tourism and minerals. These resources
cannot be renewed or created again, thus this is another problem
for Egypt or the Arab states which had
revolts. Egypt and Tunisia were heavily dependent
on tourism for both of them and gas production and exportation for Egypt. In Egypt in
2010 the profits from tourism estimated to 12.50 USD billion but
during 2011 it decreased to 8.7 Billion and in
2016 it decreased to 3.80 USD billion. This huge
drop created high unemployment rates (Salih, 2013)The Impact of the
Arab spring in Arab world’s economies:

Unfortunately, the Economies of the Arab Spring did not
go well as the people wanted. The Arab countries started to import more
from outside, no Foreign Direct Investment came to these states because of the
political and economic instability and the more public-sector jobs were
created. Thus effectively all Arab Springs’s economies have
floundered over the past years since 2011, living both high rates of
unemployment and low economic growth. A combination of domestic and
external shocks established an ideal bomb and notably left the economies in
poorer shape than before 2011 Uprisings (Khan, 2014). Arab Spring
countries challenged political disorder and social instability that reduced the
security situation and made interior and foreign investors to flee to safer
places to invest in. The consequence of higher oil prices outcome in
severe fiscal and external inequality. Furthermore, the financial crisis
in Europe led to austerity in Italy, Spain, Portugal and Greece, thus it meant
less demand for exports, a decreasing in tourism receipt, less Foreign Direct
Investment (FDI) and drop in jobs payment. So, with all of this
mixture led indirectly to a bad situation of Arab world’s
economies. All of these elements led to pessimistic
economy. The growth of real domestic product (GDP) fell harshly
in 2011 in the Arab spring states except Morocco. In the largest economy
in MENA and North Africa region which is Egypt that has $250 billion,
its growth decreased to fewer than 2 percent comparing its GDP in
2010 which was 5 percent. The Jordanian Image was the same; with
6 percent GDP per year fell to 2.6 in 2011. Tunisia, Libya and
Yemen faced worse case with negative growth rates, which never happen usually
in third world countries. The civil war in Libya made it
special case, which made Libya decrease its oil production from
1.7 million barrels per day in 2010 to fewer than 0.5
million barrels per day in 2011, in addition the sanctions
of the UN that froze foreign assets made the economy’s function
worse. Thus, due to the fall down in oil production,
led to fall in real GDP with shocking 62 percent. Moreover,
the real GDP of Tunisia decreased from 4.5 percent to
2 percent and the inflation rate to 3.5 percent. The growth
of the real GDP of Yemen was the same as Tunisia during from
2000-10 but in 2011 it had a negative GDP with
12 percent. The 2 years after the revolutions Arab Spring states’
experienced stable growth rates, nevertheless at a low level. The oil
production in Libya becomes much stronger than expectations with real GDP
increased by over 100 percent in 2012 but, in 2013 it decreased again by 5
percent in 2013 as disruption from strikes and political instability came back
again. By excluding Libya, Arab Spring states growth was about
3 percent from 2012 to 2013. However, this low level of growth
is not enough to attract FDI and creating more jobs. Even though
that one of the major causes of the Arab Spring is unemployment, but the
image deteriorated in all six countries from 2011 to 2012. However, with
the exception of Morocco official statistics showed
that unemployment levels got doubled. Thirteen percent was the
amount of unemployment in Egypt in 2012 and became 35 percent in
Yemen. These high unemployment rates are without any doubt a critical
issue, extremely more disruptive is that unemployment between youth will double
or triple the unemployment rates (Jones, 2012). Despite the fact that
Morocco has viewed better real GDP performance than other Arab
Spring’s countries, unemployment rates were
more than 9 percent between youths and it been
approximately around 30 percent. Somehow, except in Yemen and Egypt,
the controlling of inflation, was the thing that saved them from
recessions in Arab Spring’s countries (Khan, 2014). On the other
hand, average annual rates of 8 percent with inflation in these countries,
governments have to be aware of exchange between growth and
inflation. However, it’s likely to achieve a growth flow throughout the
outgrowth macroeconomic policies, but as inflation increases it will directly
have an opposite effect on growth (Khan, 2013). The countries that
are in the danger zone are Yemen and Egypt. The decreasing in tourism and
workers payment with inflation have led to a loss of international reserves and
an expanding of foreign recent account deficits. However, Yemen and Egypt
handled to hold the recent account deficit under 3 percent of
GDP; otherwise, Libya’s benefit of oil high prices and maintained large
surplus. Moreover, in Jordan it has a running budget defect of more than
10 percent of GDP, for Morocco and Tunisia seems to be in the same
level. As a consequence,
the Arab Spring states excluding Libya, estimated lost 30
billion USD in international reserves since the beginning of 2011 to
finish with 55 billion USD in late
2013. The Arab Spring states’ financial deficit
raised as revenue downed with the decreasing in their own economies and
as states obligated with increasingly financial policies to
deal with the populations wants to reduce economic hardship. The wages of
the public sector increased in all Arab transition
countries. The wages increased by 77 percent from 2011 to
2013. Moreover, subsides on food and energy took from the
state’s budget. The International Monetary Fund (IMF) declared
that nearly half of the world’s energy subsidies are in the MENA region
with $2 trillion (“Energy Subsidy Reform – Lessons and
Implications”, 2013). In Libya it takes 14 percent of its
GDP, in Egypt 9 percent, in Morocco 6 percent, and in Yemen its
9 percent. 

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