Arab spring or summer of discontent?

6 Min Read

By John Defterios

Protests have rekindled in Cairo’s Tahrir Square on a grand scale. Hundreds were injured and expressed their frustration at what they see at the snail’s pace of change after the Arab uprisings that started in Tunis six months ago.

It is a good time to take stock at the half year point since Mohamed Bouazizi, the fruit seller lit himself on fire unable to see a way out of poverty. After taking to the streets and putting their lives on the line, expectations are rightly sky high in search of change. But what we are witnessing now is a dangerous reality gap of what protestors expect and what governments have been able to deliver.

Mustapha Kamel Nabli, governor of the Central Bank of Tunisia, says that reality gap has widened and he is urging regional and global investors to speed into action to assist in this effort.

“If we do not act now we will see failure after the success of the uprising,” said Nabli during a World Economic Forum webinar with government and business leaders. He underlined the absolute collapse in tourism receipts taking one and a half billion dollars out of the economy this year. Libyans fleeing the fighting have crossed the border in search of security in Tunisia, adding another layer of challenges to a population of just 10 and a half million people.

In Tunisia, we hear very little about the day-to-day struggle to sew together the fabric of society torn apart after the Arab Spring. Headline economic numbers looked promising — 5 percent per year for a decade — but they masked real discontent in the bottom rungs of society. Now the challenge is pushing through political reforms, while improving conditions and cutting red tape to attract foreign direct investment.

Unemployment, already in the double digits, will rise even faster in this period of transition according to Masood Ahmed who is the Director of the Middle East and Central Asia for the IMF. While policy makers and businessmen were looking for stability at all cost, Ahmed suggests there was almost “too much emphasis on stability in the past” and as result the Middle East was bypassed for Asia which offers faster growth and more open economies. Ahmed is suggesting that each country has to build a consensus for reform to define what kind of economy the entire population is looking for.

During our 90 minutes on-line, we talked of the need to create another 75 million jobs by the end of the decade, but as Abudulaziz Al Ghurair, chief executive of Mashreq Bank of the UAE noted, “five to ten years is not acceptable anymore.” There is intense pressure by the people to cut down the layers of bureaucracy, but he believes there is “patience if they see a transparent system.”

The knee jerk reaction by those with oil revenues in the region, the Persian Gulf States, has been to spend their way out of trouble. Traditionally, government has been the primary employer with an oversized role in society. Danny Truell of the giant Wellcome Trust of the United Kingdom observed that the strategy should be altered, “Governments need to create the perfect playing field, but should not serve as referees themselves.”

After the G8 Summit in Deauville, there has been a great deal of discussion about a partnership between the Gulf States, the European Union, the IMF and the industrialized countries; $20 billion was earmarked initially. The Group Chief Executive of the National Bank of Kuwait, Ibrahim Dabdoub said the concept of an Arab Marshall Fund, in the spirit of the fund created to rebuild Europe after World War II, would be excellent.

There has been some trepidation about picking the correct vehicle in which to channel funds to those in need after the uprisings. A suggestion included the Arab Development Bank, while G8 members in Deauville pointed to the European Bank for Reconstruction and Development (EBRD), which could refocus efforts on North Africa after the rebuilding of Eastern Europe, is nearly complete.

Nabli, the Central Banker from Tunisia, raised the key question and returned to the need for near term urgency. “Is it right for us to finance this on our own?” The answer is no, but getting fast answers in the form of funding and the right structure are the challenges.

In the absence of near terms solutions, the struggle by the people continues in Syria, Yemen, Bahrain, Tunisia and again in Cairo’s Tahrir Square.

John Defterios is CNN’s anchor for Marketplace Middle East. For more information go to


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