Economic Trends in the ESCWA Region 2011- 2012
During a press briefing to highlight the main findings of the “Survey of Economic and Social Development in the ESCWA Region 2011-2012,” held this morning at the U.N. House in Beirut, Mr. Abdullah Al-Dardari, Director of Economic Development and Globalization Division (EDGD) said that all-time high oil revenue amidst the Arab Spring resulted in growth polarization between major oil exporters and the rest of the ESCWA region. He also said that the Survey points out that the channels of positive spillover from major oil producers to the other countries in the region were severed due to a deteriorating risk perception in the after math of the internal conflicts and political instability prevailing in some countries of the ESCWA region.
Al-Dardari added that the Survey assesses that the external economic environment has been generally favorable for the ESCWA region in 2011 mainly due to the fact that both oil production and revenue marked an all-time high, pointing out that ESCWA estimates the total crude oil production of the ESCWA region in total at 20.4 million barrels per day (of which 16.3 million barrels per day for GCC countries) for 2011, and it forecasts the production level to rise moderately to 20.9 million barrels per day (of which 17.2 million barrels per day for GCC countries) for 2012. He also said that ESCWA projects crude oil prices are likely to stay at a high range in 2012, but will decline moderately to $100 per barrel in 2012 (yearly average/OPEC Reference Basket price).
The EDGD Director also pointed out that intra-regional trade, investment and tourism all decreased. The decline in intra-regional flow of funds was also reflected in the stagnation of foreign reserves accumulation. Thus the region’s resilience against the global financial crisis of 2008-2009, as evidenced by the accumulation of foreign reserves during that period, disappeared in 2011. More countries in the region, particularly Egypt, the Sudan, the Syrian Arab Republic and Yemen, have become vulnerable to a balance-of-payments crisis.
Regarding GDP growth performance for 2011, Al-Dardari said that the Survey estimates the average GDP growth rate for 2011 for the ESCWA region at 5.1 percent. It has moderately declined from 5.7 percent in 2010. GCC countries are estimated to mark an increased average GDP growth rate at 6.3 percent in 2011, compared to 5.7percent in 2010. Iraq is estimated to maintain a higher GDP growth rate at 9.6 percent in 2011. The average for the rest of the ESCWA region (Egypt, Jordan, Lebanon, Occupied Palestinian Territory, the Sudan, the Syrian Arab Republic and Yemen) is estimated at 0.8 percent in 2011, compared to 5.3 percent in 2010. Moreover, this split in GDP growth trends between both sub-regional groups is forecasted to continue in 2012 as the projected growth rate stands at 4.5 percent for GCC countries, 10.5 percent for Iraq and only 0.6 percent for the rest of the ESCWA region (i.e. excluding GCC countries and Iraq).
Al-Dardari concluded saying that the report emphasizes that this growth polarization deepens already uncertain prospects of the region's economic and social development noting that the unemployment rate of the ESCWA region remains at the highest level world-wide. The Survey concludes that the use of “regional leverage” by articulating regional cooperation frameworks for Arab regional integration is crucial to tackle pressing issues for a constructive economic and social transition of the region.
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