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| Violent protests have broken out in several Arab countries since early 2010 and turned into bloody civil wars, including in Yemen (AFP Photo/MOHAMMED HUWAIS) |
Dubai (AFP) - Unemployment and sluggish economic growth are fuelling social tension and popular protests in several Arab countries, the International Monetary Fund said Monday.
The unrest
is in turn contributing to slower growth in the Middle East and North Africa
(MENA) region, alongside global trade tensions, oil price volatility and a
disorderly Brexit process, the IMF said in a report on the regional economic
outlook.
Earlier
this month it lowered the 2019 forecast for the region -- taking in the Arab
nations and Iran -- to a meagre 0.1 percent from 1.1 percent last year.
The IMF
slashed its outlook for the region's three largest economies -- Saudi Arabia,
Iran and the United Arab Emirates.
The risks
around the forecast of earlier this month "are skewed to the downside and
are highly dependent on global factors," the IMF said in its report on
Monday.
"The
level of growth that countries in the region are having is below what is needed
to address unemployment," said Jihad Azour, the IMF's director for the
Middle East and Central Asia.
"We
are in a region where the rate of unemployment at the youth level exceeds 25-30
percent and this requires growth to be higher by 1-2 percent" in order to
make a dent in joblessness, Azour told AFP in an interview.
The IMF report said that the high unemployment was worsening social tensions in Arab countries.
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| A new wave of demonstrations erupted over the last year in Algeria (pictured) Sudan, Iraq and Lebanon, typically demanding economic reforms and action against corruption (AFP Photo/RYAD KRAMDI) |
The IMF report said that the high unemployment was worsening social tensions in Arab countries.
"Unemployment
averages 11 percent throughout the region versus seven percent across other
emerging market and developing economies," it said.
"Women
and young people are particularly likely to be out of work, with more than 18
percent of women... without jobs in 2018."
Violent
protests have broken out in several Arab countries since early 2010 and turned
into bloody civil wars in Syria, Yemen and Libya.
A new wave
of demonstrations erupted over the last year in Algeria, Sudan, Iraq and
Lebanon, typically demanding economic reforms and action against corruption.
In Lebanon,
where protesters have brought the country to a standstill with demands for a
full overhaul of the political system, the economy grew at a very slow pace
over the past few years, Azour noted.
"The
government has to act firmly and swiftly in order to address those imbalances,
bring confidence back by addressing the fiscal situation, and lower
expenditure," he said.
The IMF
also said that public debt levels were very high in many Arab countries --
exceeding 85 percent of gross domestic product (GDP) on average, with rates of
more than 150 percent in Lebanon and Sudan.
"Having
built over many years, the cost of public debt burdens has become sizeable,
preventing investments critical to the region's long-term economic
future," it said.
Iran flounders
Iran flounders
The IMF
said that Iran, which is subject to crippling US sanctions, has entered a steep
economic recession and faces a battle against spiralling inflationary
pressures.
The Islamic
republic's economy is projected to contract by 9.5 percent this year after
posting negative growth of 4.8 percent in 2018.
Iranian
authorities must align "the exchange rate close to the market rate and
also reform the financial sector... and try to address some of the implications
of the high level of inflation," Azour said.
As a result
of the sanctions, Tehran is believed to be exporting only around 500,000
barrels per day of crude, down from over two million bpd before the sanctions.
The IMF
said that oil-rich Gulf Cooperation Council (GCC) states, led by Saudi Arabia,
are expected to grow by just 0.7 percent this year from 2.0 percent in 2018 due
to lower oil prices and output.
"GCC
economies need to diversify and grow out of oil and this requires them to
accelerate the reforms that have been started in the last four to five
years," Azour said.


















