This “Arab Spring,” is turning into one big rotten present to the rest of the world. Yes, some dictators were brought down —to be replaced by a totalitarian strain of Islam that will only be worse for the citizens of those countries, rather than better. You can’t claim any of these countries were moving down the road to openness and massive new achievements, but a takeover by the Muslim Brotherhood isn’t likely to be helpful.
I’ve been warning for months that Egypt, Syria, Tunisia and other Arab oil-importing countries face a total economic meltdown (see Food and failed Arab states, Feb 2, and The hunger to come in Egypt, May 10). Now the International Monetary Fund (IMF) has confirmed my warnings. The leaders of the industrial nations waited until last weekend’s Group of Eight (G-8) summit to respond, and at the initiative of United States President Barack Obama proposed what sounds like a massive aid program but probably consists mainly of refurbishing old programs. The egg has splattered, and all of Obumpty’s horses and men can’t mend it.
The numbers thrown out by the IMF are stupefying. “In the current baseline scenario,” wrote the IMF on May 27, “the external financing needs of the region’s oil importers is projected to exceed $160 billion during 2011-13.” That’s almost three years’ worth of Egypt’s total annual imports as of 2010. As of 2010, the combined current account deficit (that is, external financing needs) of Egypt, Syria, Yemen, Morocco and Tunisia was about $15 billion a year.
What the IMF says, in effect, is that the oil-poor Arab economies – especially Egypt – are not only broke, but dysfunctional, incapable of earning more than a small fraction of their import bill. The disappearance of tourism is an important part of the problem, but shortages of fuel and other essentials have had cascading effects throughout these economies.
“In the next 18 months,” the IMF added, “a greater part of these financing needs will need to be met from the international community because of more cautious market sentiments during the uncertain transition.”
But a solution is at hand, of course. Just listen to this Egyptian Cleric discuss why Egypt is having all these financial problems.
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