July 6th, 2011
10:23 AM GMT
(CNN) - Protests have rekindled in Cairo’s Tahrir Square on a grand scale. Hundreds are expressing their frustration at what they see as a snail’s pace of change after the Arab uprisings that began in Tunis six months ago.
Now is a good time to take stock since Mohamed Bouazizi, the fruit seller, lit himself on fire as he was unable to see a way out of poverty. Protestors took to the streets, putting their lives on the line, and expectations were high that change would follow. But we are witnessing 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 the recovery 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, which has taken $1.5 billion out of the economy this year.
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 look promising - 5% per year for a decade - but they mask real discontent in the bottom rungs of society. Now the challenge is to push 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, director of the Middle East and Central Asia for the IMF. While policy makers and businessmen have been looking for stability at all costs, Ahmed suggests there has been almost “too much emphasis on stability in the past.” As a result, the Middle East was bypassed for Asia which offers faster growth and more open economies.
During our 90 minutes online, we talked of the need to create another 75 million jobs by the end of the decade. However as Abudulaziz Al Ghurair, Chief Executive of Mashreq Bank of the UAE notes, “five to 10 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 was a great deal of discussion about a partnership between the Gulf States, the European Union, the IMF and the industrialized countries. Initially, a sum of $20 billion was earmarked.
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 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-term solutions, the struggle by the people continues in Syria, Yemen, Bahrain, Tunisia –and again in Cairo’s Tahrir Square.
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