Unemployment fuelling unrest, says IMF
GENEVA: Unemployment and sluggish economic growth are fuelling social tension and popular protests in several Arab countries, the International Monetary Fund said yesterday.
The unrest is, in turn, contributing to slower growth in the Middle East and North Africa 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% from 1.1% last year.
The IMF slashed its outlook for the region’s three largest economies — Saudi Arabia, Iran and the United Arab Emirates.
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.
“The level of growth that countries in the region are having is below what is needed to address unemployment,” said Jihad Azour, the IMF’s director for the Middle East and Central Asia.
“We are in a region where the rate of unemployment at the youth level exceeds 25%-30% and this requires growth to be higher by 1-2%” in order to make a dent in joblessness, Mr Azour said in an interview.
The IMF report said that the high unemployment was worsening social tensions in Arab countries.
“Unemployment averages 11% throughout the region versus seven percent 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% of womenc ... 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 are demanding a full overhaul of the political system, the economy grew at a very slow pace over the past few years, Mr 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% of GDP on average, with rates of more than 150% in Lebanon and Sudan.