Long Term Positive Prospects
The World Bank released a report on Tuesday saying that despite the short-term downward movement of Middle Eastern and Northern African economies, in the long run the world can expect to see positive movement in that region.
The report is the World Bank’s regional economic update for May 2011 for the area which is more and more frequently being referred to as MENA. According to the report:
“The medium-run growth prospects are likely to improve” for Middle Eastern and North African nations, whose broader geographical region is often referred to as MENA, “especially if the political changes are associated with more open and accountable governance and more rapid reforms.”
The report also stated that the MENA countries, by the end of 2010, had already mostly risen out of the global financial crisis that had typified many economies across the world. Before the political crisis overtook the region economic predictions stated that the area would most likely fully recover from the financial crisis sometime during 2011.
Revolution Interfered with Economic Recovery
In early 2011 however a series of unexpected events took place; unrest, uprisings and revolution shook the region, causing regime changes in powerful countries such as Egypt and Tunisia. The pro-democracy demonstrations spread further to Bahrain, Libya, Syria and Yemen, leaving economic turmoil in their wake, and a great change in attitude.
Change is Good
The World Bank report asserts that often change is for the better.
A “better rule of law will promote competition, and political stability will attract investment, facilitating more rapid growth in a sustainable way,” the World Bank report said.
Now it is up to the various countries to install governments with credibility and a commitment to reform as quickly as possible.
In the short term, the report states, it is “inevitable that investment will be delayed and economic challenges will emerge.” But previous crisis have shown that these problems are almost always limited in nature, with growth slowing for about one year after which it returns to and even surpasses the previous levels.