São Paulo – The deputy managing director at the International Monetary Fund (IMF), Nemat Shafik, stated in her last article in the institution’s blog, published on Friday (18), that the countries of the Middle East and North Africa need to live an “economic spring”. According to the executive, the nations in the region must diversify their economies, invest in infrastructure, generate jobs and seek growth. She said that she was impressed, in a recent visit, on hearing almost all people speak about politics, but almost nobody about economics, which she considers “a worry”.
According to Shafik, the situation is the most serious, though not limited to, the countries that do not produce oil. According to her, among these nations, almost all economic indices are heading in the wrong direction. “Growth halved, unemployment rose, reserves came under pressure and deficits ballooned as governments responded to social pressures by increasing spending on wages and generalized subsidies,” said the executive.
She recalls that in the 90s, the main European economies made use of the economic moment to help the European countries that were living a transition and stated that many Arab countries also need to live changes. At the moment, different from that time, there is no foreign credit available. “New governments across the region are keen to respond to the demand for jobs and justice that brought them to power but are quickly faced with the hard reality of limited resources and powerful vested interests.”
She also said that the talks that should be in the agendas of leaders in the region do not figure among the priorities of governments. She asks, for example, how to reduce the volume of subsidies granted to the poorest to make it possible to free funds for investment in education and infrastructure, and what governments have been doing to guarantee minimum quality levels to the poor. She also asks what measures have been adopted to allow the private initiative to create between 50 million and 75 million over the next ten years. “Unfortunately, there is not yet any real discourse about these issues,” she finished off.
The executive warns to the concern with Arab youths. According to Shafik, they are concerned with the business environment, with the access they have to education and jobs and with the transparency adopted by local governments. “This visit to the region has made me more convinced that without an ‘Economic Spring’ to accompany the ‘Arab Spring’ and the important political transitions taking place in the Arab region, we risk failure on both fronts.”
*Translated by Mark Ament
