Cost of Arab Spring swells close to $56 billion

In line with the mounting death tolls of the Arab Spring uprisings, the financial after-effects of the revolts have also racked up a hefty sum for the region, a recent study has revealed.

The total cost of the uprisings is approaching $56 billion, an analysis by political risk consultancy Geopolicity estimated, measuring the fiscal impacts of the revolts in Libya, Egypt, Tunisia, Syria, Yemen and Bahrain.

“The Arab Spring has so far cost the worst-hit countries some $55.84 billion in 2011 alone, excluding losses to human life, infrastructure damage and business and foreign and direct investment losses,” the report said.

The figure, measured as a combination of costs to GDP and to public finances, showed that Syria incurred the worst losses, at $27.3 billion.

The unrest, which began at the start of 2011 in Tunisia, saw the North African country lose $2.5 billion. Following this, Egypt’s revolt has led to $9.8 billion in losses, while Libya’s losses have amounted to $14.2 billion.

“Libya, Egypt and Syria have so far paid the highest price, both human and economic,” the report concluded, after the United Nations said last week that the death toll in Syria had reached 3,000 since the protests first erupted, in mid-March. The civilian death toll in Libya, meanwhile, has not been collectively tallied by reliable sources, but is thought to have exceeded Syria’s numbers.

On the other hand, the economic activity of Gulf Arab states tell a different story. Unlike Libya, which has incurred an 84 percent plunge in public spending, Saudi Arabia’s economy witnessed a $5 billion boost, with Kuwait’s economy growing by $1 billion to date. The report said these countries had fiscally “benefited from the disruption in other Middle East and North African countries.”

A prime reason behind this has been oil, which was cut off from important Arab exporters such as Libya.

“Oil exporters emerged the winners and oil importers losers during the volatile period,” the report said.

“The wider Arab realm, in particular the UAE, Saudi Arabia, Qatar and Kuwait, have seen significant increases in GDP over the same period, because they have not been affected by uprisings and their economies are more progressive and growth oriented.”

Saudi Arabia’s attempt to avert the political disruption with newly instituted public spending handouts and a wider public investment program, which the report estimates at $30 billion, has worked well for kingdom’s economy.
Still, the disrupted “Arab Spring countries” continue to pull down MENA’s regional economy.

By grouping GDP figures belonging to the 22 MENA states, the Arab world was estimated to be worth at least $2.8 trillion in May, 2011; in comparison Germany, with a population much smaller than the MENA region, has a GDP of $2.9 trillion.

But public handouts and a reliance on oil are not the best solutions for the region’s fiscal downturn. A better solution, the report said, was much broader international support through the G20 or United Nations aimed at much wider reform.