2013年-世界发展银行全球_MENA_Monitor___Economic_Pressures_Mount_4页_831kb

MENA Knowledge and Learning - Quick Notes Series

Number 97 | May 2013

Core Content Summary

The MENA Monitor: Economic Pressures Mount report outlines the economic challenges and outlook for the Middle East and North Africa (MENA) region in 2013, highlighting the impact of the Arab Spring and ongoing political instability on economic growth and development.

Main Economic Outlook

• Regional Growth Deceleration:
  • MENA regional growth is expected to slow to 3.8% in 2013 from 6.1% in 2012.
  • This slowdown reflects a return to more sustainable growth in oil-exporting countries, which had grown at an extremely high rate in 2012 due to strong oil prices and production.
  • Libya saw a sharp rebound after the 2011 production collapse, but its growth is expected to continue to be volatile.
  • In oil-importing countries, economic activity is expected to expand faster than in 2012, though this is contingent on political stability and reform progress.

Key Challenges and Risks

1. Political Instability and Policy Uncertainty

• Political transitions in the region have led to fragmented governance, sectarian tensions, and delayed reforms.
• Syria's violence has spilled over into neighboring countries, including Lebanon and Jordan, affecting their security and economic growth.
• In Egypt, the new Constitution was approved by a small majority with low voter turnout, leading to challenges in implementing election laws and delaying parliamentary elections.
• Tunisia's political instability has delayed the drafting of a constitution and the scheduling of national elections.
• Libya's constitution drafting has also been delayed, though the interim government is working to improve security and public institutions.

2. Macroeconomic Imbalances

• Fiscal deficits have worsened significantly in oil-importing transition economies (Egypt, Tunisia, Yemen) due to increased public spending on wages, subsidies, and pensions.
• Current account positions are deteriorating, and government debt as a share of GDP has increased by 4-12 percentage points.
• Yemen's fiscal deficit reached 6% of GDP, while Jordan saw the fastest increase in debt-to-GDP ratio in the region (12 percentage points over 2010–2012).
• Egypt has increasingly relied on short-term domestic debt, with interest payments rising by 33% in the second half of 2012.
• Credit ratings have declined, with Standard & Poor's downgrading Egypt's long-term rating to the same level as Greece, leading to sovereign bond spreads rising to 700 basis points over US Treasuries.

3. External Economic Pressures

• Net exports and investment flows have declined since 2011, worsening the external positions of developing MENA countries.
• Egypt has seen a significant drop in foreign reserves, now standing at less than 3 months of imports, with half in illiquid form.
• Lebanon's external position improved due to capital inflows and wider domestic-international spreads.
• Yemen's current account deficit narrowed due to a $2 billion Saudi grant, leading to gross reserves increasing to $5.6 billion (equivalent to slightly less than 6 months of imports).
• Currencies in oil-importing North Africa have weakened, with the Egyptian pound depreciating by 10% against the US$ since December 2012.

Impact on Employment and Poverty

• The employment situation has worsened in Egypt and Tunisia, with unemployment rates increasing by 4 percentage points since the Arab Spring.
• Tourism-related sectors, such as hospitality, air transport, and retail trade, were hit particularly hard in Egypt.
• Manufacturing and construction also declined significantly.
• Agriculture, the largest employer, also contributed to the growth slowdown.
• Poverty rates in Egypt increased from 22.0% in 2008/09 to 25.2% in 2010/11, and likely further since.
• Inequality has risen, with a sharp increase in income equality aversion across all income groups.
• Household welfare in Egypt has not improved in real terms between 2000 and 2008, despite high economic growth.

Potential for Recovery and Reform

• Infrastructure investment could support job creation. The World Bank estimates that meeting annual infrastructure needs could generate 2.5 million jobs in the region.
• Fiscal consolidation and political stability are critical for recovery in oil-importing countries.
• Morocco has seen a shift in budget allocation, spending more on subsidies (6.6% of GDP) than on public investment (5.8% of GDP).
• Yemen is expected to see accelerated growth if the national dialogue leads to a stable government and reforms.
• Twin deficits (current account and fiscal) must be addressed to improve macroeconomic stability, boost investor and consumer confidence, and stimulate the private sector.

Conclusion

The MENA region faces significant economic and political challenges in 2013, with growth slowing and macroeconomic imbalances growing. The Arab Spring has disrupted economic activity, particularly in Egypt and Tunisia, where unemployment and poverty have risen sharply. While some countries like Yemen and Lebanon have seen limited improvements, fiscal and political reforms are essential for long-term sustainable growth and recovery. External financing remains crucial for many post-revolutionary oil-importing countries.

Contact Information

• Gerard A. Byam, Director, Strategy and Operations, MENA Region, the World Bank
• Regional Quick Notes Team: Omer Karasapan, and Roby Fields
• Tel: (202) 473 8177

Note: The MNA Quick Notes are intended to summarize lessons learned from MNA and other Bank Knowledge and Learning activities. The Notes do not necessarily reflect the views of the World Bank, its Board, or its member countries.