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Zach Jergan

Arab Spring Economic Indicator

Macro

2/17/12

Economic Indicators Arab Spring

                I want to start off by thoroughly describing what the Arab Spring is.  The Arab Spring is a revolutionary movement that spread like wildfire throughout the Arab world.  To date there have been some form of revolution in 17 different Arab countries.  The impact left by the Arab Spring has not only changed political outlooks but economic ones as well.  The things that I am going to look over are how some economic indicators were affected in the region by looking at three different countries in particular: Tunisia, Bahrain, and Yemen.  These economic indicators should give a good feel of what the outlook is like on the entire region and how damaging it has been.

Let’s go through these alphabetically, starting with Bahrain.  According to a table found on zawya.com the cost to GDP in billions of U.S. dollars was $0.39(“Arab Spring losses” October 16, 2011).  The costs to personal finance were $0.69.  This all accumulated to a total loss of 1.09 billion U.S. dollars.  On top of the decline of GDP and personal finance, the last collected unemployment rate I could find on The World Factbook was 15% in 2005.  This number might not seem extreme; however looking deeper into the numbers it said that 44% of the workers in Bahrain are non-national workers.  This is a very large number and can be attributing to the high unemployment rate.  Looking at industrial production it is important to see what industries are prominent in Bahrain.  The leading industries are petroleum processing and refining, aluminum smelting, Islamic and offshore banking, and ship repairing.  The most recent statistics about industrial production were from 2010 and Bahrain has a growth of 1.5%.  This is misleading because the Arab Spring happened in December of that year.  Bahrain’s Retail Report forecasts that the country’s retail sales will grow from an expected $2.18 billion in 2011 to $2.90 billion by 2015(“Bahrain Retail Report Q2 2011” April 15, 2011).  This is all based on the assumption that the political situation remains stable.  Looking at the GDP per capita of Bahrain and seeing that during the Arab Spring it has only dropped from $27,500 to $27,300 in 2011(“World Factbook, Bahrain” February 8, 2012).  This is a strong sign that although the Arab Spring may have hurt the personal income a little it did not affect it significantly.

The second country I chose to look at was Tunisia.  Tunisia has had no real growth rate from 2010 to 2011(“World Factbook, Tunisia” February 8, 2012).  Tunisia’s GDP per capita in 2011 was $9,500 and ranked 112^th in the world.  The GDP seems to have been affected by the Arab Offspring because its GDP dropped $100.  This directly affected the real personal income of the people of Tunisia because they had less money to spend.  Another economic indicator that I looked at was unemployment.  Tunisia’s unemployment rate rose 3% from 2010 to 2011(“World Factbook, Tunisia” February 8, 2012).  This number seems to have a direct correlation with the Arab Spring and has pushed Tunisia to 151^st in the world in unemployment. Another statistic that Tunisia was ranked 151^st in was industrial production growth rate.  This rate came in at 0%.  This might not seem alarming but it means that there was no growth at all in the industrial sector, which is not good for a struggling country like Tunisia.  Another economic factor I found was that Tunisia had a -8.5% budget deficit of GDP in 2011(“World Factbook, Tunisia” February 8, 2012).  This is just another illustration of the Arab Spring and how it is affecting the economic sector of Tunisia. A leading world producer of phosphates, Tunisia’s annual production of phosphates reached a new high in 2008. Shopping malls and local supermarkets only account for 20% of the country’s retail trade, which remains dominated by the local corner shop. (“Industry & Retail Tunisia 2010”)

The final country that I am looking at is Yemen.  In 2011 the GDP per capita in 2011 was only $2,500.  This ranked Yemen 177^th in the world.  The GDP per capita dropped nearly 7.5% from 2010(“World Factbook, Yemen” February 8, 2012).  This is a significant drop from one year to another and the reasoning may have been due to the Arab Spring.  The drop in GDP per capita would have definitely affected the real personal income in Yemen because there was less money to be used.  Another economic indicator that I looked at was economic growth rate.  The growth for 2011 in Yemen was -2.5%.  This is another factor suggesting the impact of the Arab Spring hurt the economic sector severely.  On a positive note the industrial production rate in Yemen went up 9% in 2010, which put them 13^th in the world.  However, the Arab Spring took place in December and effects of it were probably not felt in the industrial sector until the following year.  Although Yemen suffered some losses in 2011, it is expected that the country will recover relatively and forecast real GDP growth of 2.4% in 2012 (“Oman and Yemen Business Forecast Report Q4 2011” September 23, 2011).  This is all dependent on the stability of the government that has been stirred up by the Arab Spring.

After gathering all of this information I can firmly say that Arab Spring has definitely affected the political and economic structures in all of the countries involved.  The demonstrations affected the political sector, which then had a negative effect on the economic sector.  All of the information provided shows the negative outcomes, at least economically, of the Arab Spring.

References

Central Intelligence Agency, “The World Factbook, Yemen.” Last modified February 8, 2012. Accessed February 16, 2012. https://www.cia.gov/library/publications/the-world-factbook/geos/ym.html.

Central Intelligence Agency, “The World Factbook, Bahrain.” Last modified February 8, 2012. Accessed February 16, 2012. https://www.cia.gov/library/publications/the-world-factbook/geos/ba.html.

Central Intelligence Agency, “The World Factbook, Tunisia.” Last modified February 8, 2012. Accessed February 16, 2012. https://www.cia.gov/library/publications/the-world-factbook/geos/ba.html.

Market Research, “Bahrain Retail Report Q2 2011.” Last modified April 15, 2011. Accessed February 16, 2012. http://www.marketresearch.com/Business-Monitor-International-v304/Bahrain-Retail-Q2-6275196/.

Market Research, “Oman and Yemen Business Forecast Report Q4 2011.” Last modified September 23, 2011. Accessed February 16, 2012. http://www.marketresearch.com/Business-Monitor-International-v304/Oman-Yemen-Business-Forecast-Q4-6611166/.

Zawya, “Arab Spring losses.” Last modified October 16, 2011. Accessed February 16, 2012. http://www.zawya.com/story.cfm/sidZAWYA20111016064955/Arab_Spring_losses.

Oxford Business Group, “Industry & Retail Tunisia 2010.” Accessed February 16, 2012. http://www.oxfordbusinessgroup.com/product/industry-retail-12.

Steve Hagen

Arab Spring Economic Content

                The Arab Spring is an uprising of demonstrations and protests in Tunisia, Algeria, Egypt, Yemen, Bahrain, Libya, and Syria, as well as a few other countries in the area that began late 2010.  This uprising has caused a lot of damage to many of these countries politically and economically.  I will examine the economic content involved in a few of these countries, particularly Egypt, Libya, and Syria throughout the uprising, and observe economic indicators to see how much of an impact the Arab Spring has had on these countries.

                While many lives have been lost during the violent Arab Spring, there have also been many economic losses as well.  Since the beginning of the demonstrations and protests, there have been over $51 billion in total costs for Egypt, Libya, and Syria (“Arab Spring Losses”).  Of this debt, approximately $18 billion were costs to GDP and around $33 were costs to public finance in these countries.  However, these numbers only illustrate part of the economic problems in Egypt, Libya, and Syria.  To truly understand the crisis in these Arab countries we must observe the following four economic indicators: unemployment rate, real personal income, retail sales, and industrial production.

                CIA – The World Factbook estimates the unemployment rate in Egypt to currently be 12.2%.  This is up approximately 3.2% from the estimated 9% unemployment rate just a year ago.  This shows the devastating effect that the Arab Spring has had on Egypt’s unemployment rate.  The same source also estimates the unemployment rate in Syria to be about 8.1%.  This is not a very big difference from the 8.3% unemployment rate in Syria from a year ago, so the Arab Spring has not had much of an impact on unemployment rate in Syria.  Compared to the previous two countries, Libya has a very high unemployment rate.  It is estimated to be about 30% (“Libya — Revolution and Aftermath”).  This high unemployment rate is clearly related to the economic problems that the Arab Spring has caused.

                While real personal income data may be tough to find for these countries, GDP per capita according to CIA – The World Factbook gives a good estimation of a person’s income per year.  In Egypt, it is estimated that the GDP per capita is $6,500 for 2011.  This is the same as the GDP per capita in Egypt for 2010.  Given a 13.3% inflation rate in Egypt in 2011 (CIA – The World Factbook), the fact that the GDP per capita stayed the same for this two year span shows that the Arab Spring hurt personal income in Egypt.  In Libya, the GDP per capita dropped from $14,100 in 2010 to $0 in 2011.  Due to the political effects of Muammar Gaddafi, his radical ideas and actions had a direct correlation with the GDP per capita in Libya.  In Syria, the GDP per capita decreased from $5,200 in 2010 to $5,100 in 2011.  Similar to Egypt, a 7% inflation rate makes this decrease seem much more severe. 

                The Arab Spring has hurt Egypt in terms of retail sales.  In the first two months of 2011, approximately $1 billion were lost in retail sales due to the Arab Spring (“Egypt Retail Report Q4 2011”).  BBC News suggests that Libya similarly had major losses in retail sales in 2011 due to the demonstrations and violence brought by the Arab Spring, majorly because of decreases in tourism (Smale).  BBC News also suggests that Syria had losses in retail sales.  This was in large part because of losses in tourism due to the protests going on in Syria.  This also hurt tourism in neighboring countries such as Lebanon (“Syrian Protests”).  

                Finally, the Arab Spring has had dramatic effects on industrial production in these three countries.  The industrial production growth rate is 5.7% in Egypt (CIA – The World Factbook).  This is relatively high compared to many other countries throughout the world.  Due to the Arab Spring, Syria has a low level of industrial productivity (state.gov).  Similar to Syria, Libya is also experiencing troubles with industrial growth due to the uprising of the Arab Spring.  These repressed results show a direct relationship between the Arab Spring and a decrease in industrial production in Syria and Libya.

                In conclusion, the Arab Spring has had many harsh effects and few positive effects on the nations involved in this uprising.  By use of the four provided economic indicators, we can reasonably justify the struggles in these countries, especially Egypt, Libya, and Syria. 

 

Bibliography

“Arab Spring Losses.” Zawya. Accessed February 16, 2012. Last modified October 16, 2011. http://www.zawya.com/story.cfm/sidZAWYA20111016064955/Arab_Spring_losses. Central Intelligence Agency. The World

                Factbook. Accessed February 16, 2012. Last modified December 30, 2011. https://www.cia.gov/index.html.

“Egypt Retail Report Q4 2011.” ResearchAndMarkets. Accessed February 16, 2012. Last modified October 2011. http://www.researchandmarkets.com/research/44e074/egypt_retail_repor.

“Libya — Revolution and Aftermath.” The New York Times. Accessed February 16, 2012. Last modified February 9, 2012. http://topics.nytimes.com/top/news/international/countriesandterritories/libya/index.html.

Smale, Will. “Arab Nations Aim to Win Back Tourists.” BBC News. Accessed February 16, 2012. Last modified November 9, 2011. http://www.bbc.co.uk/news/business-15651730.

“Syrian Protests Hit Lebanon Tourism.” BBC News. Accessed February 16, 2012. Last modified October 2, 2011. http://www.bbc.co.uk/news/15145225.

U.S. Department of State. Accessed February 16, 2012. Last modified February 2012. http://www.state.gov/.