Arab Spring costs the most affected countries $55bn

THE uprisings that swept the Middle East this year have cost the most affected countries more than $55 billion (€40bn), 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 $20.6bn wiped off their gross domestic product and public finances eroded by another $35.3bn as revenues slumped and costs rose.

But as 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 $38.9bn 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 $7.7bn, or more than 28%. Total costs to the fiscal balance were estimated at $6.5bn, roughly 29% of gross domestic product.

In Egypt, nine months of turmoil eroded some 4.2% of gross domestic product with public expenditure rising to $5.5bn just as public revenues fell by $75 million.

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 $6bn or 4.5% of GDP.

The report said the number of Yemenis below the poverty line was expected to be pushed above 15% as a result of currency falls and protracted unrest. Total cost to the economy was estimated at 6.3% of GDP, with the fiscal balance deteriorating by $858m, 44.9% of GDP.

Tunisia, where the protests began in late 2010, lost some $2.0bn from its GDP, roughly 5.2% with negative impacts across most sectors of the economy including tourism, mining, phosphates and fishing.

Saudi Arabia’s newly instituted handouts and wider public investment programme, the report estimated, amounted to some $30bn. But increased oil prices and production boosted GDP by more than $5bn and pushed up public revenues by $60.9bn.

In Bahrain, oil helped cushion the impact of weeks of protest, with the fall in GDP relatively low.