Go Finance Reporting in WASHINGTON - World Bank said the unrest in the Middle East and North Africa can suppress the economic growth of the Arab countries. This is due to the higher costs incurred by the two oil-rich region.
World Bank Chief Economist Justin Lin said, research economist in a number of lending institutions that showed that economic output in the Middle East and North Africa decreased.
"Our estimates show that the impact on countries like Egypt and Tunisia could be down about three percent of gross domestic product growth (GDP) was," Lin said while delivering the latest World Bank report related to the Middle East conflict and development in Washington Sunday (04/10/2011).
The economic outlook in January, the World Bank projected the economic growth in the region this year grew 4.3 percent, up from the previous year which only 3.3 percent. He added that besides two countries, specifically for the Middle East and North Africa, the impact of the riots could reduce economic growth of 2.4 percent. Nevertheless, the overall violence in the oil-rich countries will not have much impact because of the size of its economy is not great when compared to a global scale.
"However, for the price of oil, oil supply, is significantly affected. If viewed from that, we can feel a greater impact, "said Lin.
According to Lin, what the World Bank related to the Middle East economy is made after a look at issues of conflict, security, and its impact on economic health and poverty. "This report is based on our view of what is happening in the Middle East and North Africa in the past two months," he said.
He added that the conflict in Arab countries is also related to security issues that do not enter the conventional agenda for the World Bank and international development agencies. However, the problem is strongly linked to development. In the report entitled World Development Report, the World Bank also states that for other areas of high growth alone is not sufficient in reducing poverty and unemployment if there is conflict and violence.
To that end, the World Bank's emphasis on the need for access to employment, security, and justice as a key to prevent the recurrence of political violence and crime. "High unemployment and inequality can combine the weaknesses and the capacity of government on the issue of corruption, accountability, and human rights violations," said Sarah Cliffe, lead author of a World Bank report yesterday.
As is known, in recent months the political situation in several Arab countries following the fluctuating demands of the leaders of his country retreat. This condition initially in starting in Tunisia, then spread to Egypt, Jordan, Yemen, Syria, Bahrain, and Libya in North Africa. Cliffe pointed out, the growth rate in Tunisia and Egypt are on average over five percent each year is enough to reduce poverty.
Unfortunately the two countries failed to take advantage of these opportunities so that corruption and unemployment resulted in protests that led to the overthrow of power. "If we want to break the cycle of violence, the state should develop the practice more transparent, legitimate followed by the support of national institutions capable of providing the needs for citizens, including employment," added Bank World Bank President Robert Zoellick.
The report also confirms that in countries which used to the conflict, the government must solve its own problems by forming coalitions with civil society, politics, business, and consumers. (GoFinance)
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