(MENAFN - Arab Times)
DUBAI, Dec 14: During the first session of the Arab Strategy Forum, held in Dubai, Dr Natalia Tamirisa of the International Monetary Fund says the regional economic landscape in 2017 is likely to vary widely across Arab countries. She noted that 'there would be discussions around regional economic predictions, conflicts and oil prices, all of which constitute drivers for these countries.' Dr Tamirisa grouped the Arab countries into three categories: countries experiencing conflict, such as Syria, Iraq, Yemen and Libya; oil-exporting countries, such as the Gulf Cooperation Council countries and Algeria; and oil-importing countries, such as Egypt, Tunisia, Lebanon, and Morocco. Dr Tamirisa explained the grave difficulties faced by these countries because of conflict zones. Around 90 million people are suffering from deteriorating economies, while neighbouring countries are forced to bear the additional economic and social burdens of refugee migration.
She pointed out that this burden should be shouldered by the global community, and not solely by these neighbouring countries. Priority must be given to saving human lives and providing economic necessities, a responsibility for the whole world, she noted, and not just this region. The IMF stated that the agreement between OPEC members and non-member oil-producing countries has resulted in a rise in oil prices, although these are not expected to return to the 100 per barrel prices, but rather will fl uctuate between 50-60 per barrel.
Oil-producing countries — GCC countries and Algeria — will see a drop in oil prices and may have to face the possibility of economic stagnation in the medium term. This will require budget adjustments and more concerted efforts toward economic diversification.
Dr Tamirisa also indicated that measures which oil-producing countries have been implementing, such as costcutting and budget-ratinalisation could have negative implications. Governments should consider developing sectors such as tourism, industry and transport, among others. Many have made significant progress by decreasing subsidies for electricity and fuel and launching projects aimed at economic diversification, a feat not easily attained, and one which requires spending reform.
Oil-importing countries like Egypt, Lebanon, Tunisia and Morocco should take advantage of low oil prices to implement integral economic reforms, noted Dr Tamirisa.
Egypt and Tunisia have already seen promising progress, but Tunisia and Lebanon still need to lower their public debt, implement additional economic reform and empower the private sector. She further recommended that Tunisia and Lebanon create more job opportunities for youth to avert a potential rise in unemployment, if economic diversification is not implemented. Studies already indicate that one in 4 young people in these two countries will be out of work, if the economic situation persists.
Dr Tamirisa called for Egypt and Morocco to continue supporting the economic reform underway, and expects economic growth in the coming year to be low, with little tangible improvement to living conditions and job opportunities. This is why, she noted, the private sector needs to be empowered to contribute, and diversification measures should be put in place to address unemployment.
Dr Tamirisa concluded by saying that 'GDP growth in oil-exporting countries will be slower than that in developing countries, and they will face many challenges in the coming year, but these countries must provide the light at the end of the darkened tunnel. We need 2017 to be a year of economic reform and planning in order to further development and create new opportunities for young Arab men and women'.