Logo of Phnom Penh Post newspaper Phnom Penh Post - IMF: Unemployment fuelling unrest in many Arab countries

IMF: Unemployment fuelling unrest in many Arab countries

Content image - Phnom Penh Post
Violent protests have broken out in several Arab countries since early 2010 and turned into bloody civil wars, including in Yemen. MOHAMMED HUWAIS/AFP

IMF: Unemployment fuelling unrest in many Arab countries

Unemployment and sluggish economic growth are fuelling social tension and popular protests in several Arab countries, the International Monetary Fund (IMF) said on Monday.

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 said in a report on the regional economic outlook.

Earlier this month it lowered the 2019 forecast for the region – taking in the Arab nations and Iran – to a meagre 0.1 per cent from 1.1 per cent last year.

The IMF slashed its outlook for the region’s three largest economies – Saudi Arabia, Iran and the UAE.

The risks around the forecast of earlier this month “are skewed to the downside and are highly dependent on global factors,” the IMF said in its report on Monday.

“The level of growth that countries in the region are having is below what is needed to address unemployment,” said IMF Middle East and Central Asia director Jihad Azour.

“We are in a region where the rate of unemployment at the youth level exceeds 25-30 per cent and this requires growth to be higher by one to two per cent” to make a dent in joblessness, Azour told AFP in an interview.

The IMF report said that the high unemployment was worsening social tensions in Arab countries.

“Unemployment averages 11 per cent throughout the region versus seven per cent across other emerging market and developing economies,” it said.

“Women and young people are particularly likely to be out of work, with more than 18 per cent of women . . . without jobs in 2018.”

Violent protests have broken out in several Arab countries since early 2010 and turned into bloody civil wars in Syria, Yemen and Libya.

A new wave of demonstrations erupted over the last year in Algeria, Sudan, Iraq and Lebanon, typically demanding economic reforms and action against corruption.

In Lebanon, where protesters have brought the country to a standstill with demands for a full overhaul of the political system, the economy grew at a very slow pace over the past few years, Azour noted.

“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,” he said.

The IMF also said that public debt levels were very high in many Arab countries – exceeding 85 per cent of gross domestic product on average, with rates of more than 150 per cent in Lebanon and Sudan.

“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.

Iran flounders

The IMF said Iran, which is subject to crippling US sanctions, has entered a steep economic recession and faces a battle against spiralling inflationary pressures.

The Islamic republic’s economy is projected to contract by 9.5 per cent this year after posting negative growth of 4.8 per cent last year.

Iranian authorities must align “the exchange rate close to the market rate and also reform the financial sector . . . and try to address some of the implications of the high level of inflation”, Azour said.

As a result of the sanctions, Tehran is believed to be exporting only around 500,000 barrels per day of crude, down from over two million bpd before the sanctions.

The IMF said the oil-rich Gulf Cooperation Council (GCC) states, led by Saudi Arabia, are expected to grow by just 0.7 per cent this year from 2.0 per cent last year due to lower oil prices and output.

“GCC economies need to diversify and grow out of oil and this requires them to accelerate the reforms that have been started in the last four to five years,” Azour said.

MOST VIEWED

  • No more Africa travel ban but new rules for arrivals

    The Ministry of Health has decided to lift the ban on travellers from or who have travelled through 10 African countries and instead issued a set of standard operating procedures to manage passenger arrivals at Cambodia’s international airports. The 10 African countries are Botswana, Eswatini, Lesotho,

  • Prince Norodom Ranariddh passes away at 77

    Prince Norodom Ranariddh, the second son of the late King Father Norodom Sihanouk and former First Prime Minister of Cambodia, has passed away in France at the age of 77. “Samdech Krom Preah Norodom Ranariddh has passed away this morning in France just after 9am Paris-time,”

  • Cambodia purchases 4 million Molnupiravir tablets

    Cambodia has arranged for the purchase of four million US-made Molnupiravir pills – enough to treat 100,000 Covid-19 patients – even though the current rate of daily infections in Cambodia remains low. The medicine will be distributed to state hospitals, pharmacies and private clinics, according to the Samdech

  • Rise in planned flights lifts travel hopes

    Six airlines have applied to resume flights in December, while two others have put in for additional flights and routes, according to State Secretariat of Civil Aviation (SSCA) head Mao Havannall on November 29. These account for 43 new weekly domestic and international flights in December, up 16

  • Is Cambodia’s travel sector in for another cheerless holiday season?

    The travel and tourism sector was heaving back to life as borders started to reopen, promising a festive vibe for the holidays and New Year. But Omicron and other Covid-related issues are threatening to close the year on a bleak note ‘Seems [like] Covid-19 won’

  • PM blasts Vietnam general over Covid claims

    Prime Minister Hun Sen on December 6 expressed dismay after Vietnamese general Hoang Xuan Chien, formerly in charge of Vietnam’s border defences, claimed that Cambodia was a source of Covid-19 transmissions to the country. Speaking at the opening ceremony for National Road 11 connecting Prey Veng