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The Price You Pay: Cost of “Arab Spring” more than $55 billion
Though the oil price spike has helped the major regional producers, the unrest in most parts of the Middle East has really hit the fiscal balance of those states.
October 16, 2011 10:08 by Reuters
The uprisings that swept the Middle East this year have cost the most affected countries more than $55 billion, a new report says, but the resulting high oil prices have strengthened other producing countries.
A statistical analysis of International Monetary Fund (IMF) data by political risk consultancy Geopolicity showed that countries that had seen the bloodiest confrontations –Libya and Syria – were bearing the economic brunt, followed by Egypt, Tunisia, Bahrain and Yemen.
Between them, those states saw $20.6 billion wiped off their gross domestic product and public finances eroded by another $35.3 billion as revenues slumped and costs rose.
But as the major oil producers such as the United Arab Emirates, Saudi Arabia and Kuwait avoided significant unrest –often through increasing handouts as oil prices rose –they saw their GDP grow. Oil prices rocketed from around $90 a barrel of Brent crude at the start of the year to just short of $130 in May before retreating to around $113 now.
“As a result, the overall impact of the ‘Arab Spring’ across the Arab realm has been mixed but positive in aggregate terms,” the report estimated, saying overall the year to September saw some $38.9 billion added to regional productivity.
Libya looks to have been the worst affected, with economic activity across the country –including oil exports –halted at an estimated cost to GDP of $7.7 billion, or more than 28 percent. Total costs to the fiscal balance were estimated at $6.5 billion, roughly 29 percent of gross domestic product.
In Egypt, nine months of turmoil eroded some 4.2 percent of gross domestic product with public expenditure rising to $5.5 billion just as public revenues fell by $75 million.
HANDOUTS NOT REFORM?
In Syria, where protests have continued throughout the year in the face of a bloody crackdown, the impact is hard to model but early indications suggested a total cost to the Syrian economy of some $6 billion or 4.5 percent of GDP.
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