IMF invites Arab nations to tackle public ‘frustration’

The International Monetary Fund is holding a two-day regional conference from Monday in Morocco with a message of reform amid growing “frustration” among the population of some Arab states.

“Rising social tensions and protests in several countries across the Middle East and North Africa are a clear indication that the aspirations of the people of the region, for opportunity, prosperity and equity, remain unfulfilled,” said Jihad Azour, director of the IMF’s Middle East and Central Asia department.

“Reforms are the key to address the fundamental problems that have plagued so many countries of the region for so long: low growth, high unemployment and corruption,” he wrote in an analysis ahead of the conference in Marrakesh.

Unemployment in the Middle East and North Africa (MENA) region ranks among the highest in the world, with a jobless figure of more than 50 per cent, largely due to the low participation of women in the workforce in conservative Arab countries.

 In Marrakesh, government officials, business leaders and civil society figures will hear the IMF’s priorities: to fight corruption, create jobs for the young, bring more women into economic life and boost the private sector.

The IMF said: “Frustration runs high over the lack of job opportunities and access to affordable, high-quality public services.” “With over 60 per cent of its population under the age of 30, the region desperately needs higher growth and more jobs,” it said, adding that around 5.5 million young people will join the job market each year over the next five years.

In a region at the centre of the 2011 Arab Spring uprisings, born largely out of economic hardship and discontent among the young, reforms have proved a delicate balancing act.

To benefit from IMF loans, countries such as Tunisia, Egypt and Jordan have had to reduce their budget deficits, resulting in cost of living rises for their citizens.

An austerity budget in Tunisia, along with increases in VAT, sent demonstrators out onto the streets in early January.

“The frustration the Tunisian people are feeling is understandable,” said IMF spokesman Gerry Rice, speaking on the seventh anniversary of the Tunisian uprising that launched the Arab Spring.

However, he defended the institution against the “outdated” view that it is the IMF itself that causes the suffering.

“Speaking for the IMF, we do not want austerity. We do want well-designed, well-implemented, socially balanced reforms,” he said.

Egypt, whose economy was also hit hard in the turbulence of its own uprising, in 2016 launched a reform programme in exchange for a US$12 billion IMF loan.

It has since floated its currency against the dollar, triggering sharp price rises.

Jordan on Saturday increased the price of bread by up to 100 per cent after lifting subsidies on the staple in a bid to redress its debt-riddled economy.

Past price hikes have sparked riots in the cash-strapped country, which has a public debt of some US$35 billion, equivalent to 90 percent of its gross domestic product.

In 2016, Jordan secured a US$723-million three-year credit line from the IMF to support economic and financial reforms.

The Business Times

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