IMF: Arab world needs 'economic spring'

Deputy Managing Director at the International Monetary Fund (IMF) Nemat Shafik stated that the countries of the Middle East and North Africa need to live an "economic spring", based on generating more jobs, reducing deficits and seeking growth of their economies. In her last article in the institution’s blog published on the IMF website, Shafik said that the nations in the region must diversify their economies, invest in infrastructure, generate jobs and seek growth. She said that she was impressed, in a recent visit, on hearing almost all people speak about politics, but almost nobody about economics, which she considers "a worry". According to Shafik, the situation is the most serious, though not limited to, the countries that do not produce oil. According to her, among these nations, almost all economic indices are heading in the wrong direction. "Growth halved, unemployment rose, reserves came under pressure and deficits ballooned as governments responded to social pressures by increasing spending on wages and generalized subsidies," said the executive. She said: "New governments across the region are keen to respond to the demand for jobs and justice that brought them to power but are quickly faced with the hard reality of limited resources and powerful vested interests." She also said that the talks that should be in the agendas of leaders in the region do not figure among the priorities of governments. She asks, for example, how to reduce the volume of subsidies granted to the poorest to make it possible to free funds for investment in education and infrastructure, and what governments have been doing to guarantee minimum quality levels to the poor.