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IMF urges Arab states to tackle economic ‘frustration’ ahead of Morocco conference

Tunisia : demontration against austerity budget

Source : The New Arab

The International Monetary Fund [IMF] has urged Arab states to tackle growing “frustration” among their populations ahead of a two-day regional conference from Monday in Morocco with a message of reform.

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 percent, largely due to the low participation of women in the workforce in conservative Arab countries.

“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.

Government officials, civil society figures, and business leaders will hear the IMF’s priorities of fighting corruption, creating jobs for the young, boosting the private sector, and bringing more women into the workforce.

“Frustration runs high over the lack of job opportunities and access to affordable, high-quality public services,” the IMF said.

“With over 60 percent of its population under the age of 30, the region desperately needs higher growth and more jobs,” it added, noting that around 5.5 million young people will join the job market each year over the next five years.

‘Understandable’ frustration

Reforms in Arab states have proved a delicate balancing act with countries seeking to benefit from IMF loans having to reduce 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However, he defended the institution against the “outdated” view that it is the IMF itself that causes the suffering.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 $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 percent 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 $35 billion, equivalent to 90 percent of its gross domestic product.

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

 

Tags: Tunisia, austerity, IMF

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