In general, allof the countries of the ArabSpring have taken an economichit, to some degree, from theconsequences of the drasticreduction in production andforeign direct investment (FDI),the collapse of tourism, andthe upward surge of interna-tional prices on raw materials.All the governments haveintervened to dampen unreststemming from the highercosts of food by increasing public wages and subsidiesfor food and fuel. Govern-ments have broken with the oldauthoritarian regimes; they arenow in an inevitable transitionphase away from high youthunemployment, crony capi-
talism, an inefcient welfare
state, and even food shortages.This policy brief examines thesituations in Tunisia, Libya, andEgypt, among others.
Mediterranean Policy Program—Series on the Region and the Economic Crisis
Economic and Trade Relations betweenNorth Africa and the Leading Players in theMediterranean Basin:What can be Expected after the Arab Spring
by Maria Rosaria Carli and Luca Forte
1744 R Street NWWashington, DC 20009T 1 202 683 2650F 1 202 265 1662E email@example.com
Prepared in Partnership with Paralleli Euromediterranean Institute (Turin) March 2012
Differences between the ArabSpring Countries
Starting in early 2011, popularprotests in the Middle Eastern andNorth Arican (MENA) countriesled to the overthrow o regimes inunisia and Egypt, civil war in Libya,revolts in Bahrain, Syria, and Yemen,and protests in Algeria, Iraq, Jordan,Morocco, and Oman, as well as otherprotests scattered in other Middle Eastcountries.All o these countries are in a periodo transition that could lead to democ-racy aer years under repressiveregimes that ran inecient economies.But at rst glance, there is little incommon in the major economic indi-cators o the countries involved in theArab Spring. While all these countrieshad positive growth rates, the annualper capita GDP in each ranged romaround $10,000 in Egypt, Algeria,and unisia to less than $5,000 inMorocco. Tis growth was jeopar-dized as a consequence o the revolts,
* Maria Rosaria Carli is senior researcher at the Instute for Studies on Mediterranean Sociees of Naonal Research Council(CNR-ISSM) and former director of the Instute for Research on the Mediterranean Economy of the Italian Naonal ResearchCouncil. Luca Forte is head of the Mediterranean Economy and Territorial Stascs division at SRM (Economic ResearchCenter for Southern Italy and the Mediterranean Area).
as was to be expected; it could not beotherwise, considering that most o theeconomic resources o these countriesare derived rom the export o hydro-carbons, tourism, and oreign invest-ments, sectors that are naturally hit by an unclear political situation.No country on the southern shore o the Mediterranean had help rom theInternational Monetary Fund (IMF)prior to the Arab Spring. Aer therevolts began, however, many interna-tional institutions provided support tothe economies o these countries, notonly loans rom the IMF, but also aidrom the World Bank and assistancerom the European Bank or Recon-struction and Development (EBRD)and European Investment Bank (EIB).Tis aid should help repair the damagecaused by the decline in tourism andinvestment and the “hemorrhaging” o capital, which also compromised thelevels o currency reserves.