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Egypt

After Arab Spring, The Price Of Revolution Is Slow Economic Growth

Egypt and Tunisia began 2011 with a revolutionary bang. But over the course of the year their respective economies have gone flat. Leaders from the Arab Spring countries know that stoking economic growth may be the best chance to make democracy last for t

A recent protest in Cairo over university fees (Gigi Ibrahim)
A recent protest in Cairo over university fees (Gigi Ibrahim)

Nine months after the first buds of the so-called "Arab Spring" blossomed, the two countries that led the uprising – Egypt and Tunisia – are facing a painful economic reality. Tourism, one of the most significant sources of income, has collapsed. Several other sectors have failed to take off. Did anyone calculate the price for freedom?

Egypt"s economy expanded a solid 5.1% in 2010. But so far this year, growth is just 1.2%, with the post-revolutionary slowdown expected to extend through 2012. The International Monetary Fund (IMF) forecasts growth of just 1.8% for next year.

The situation in Tunisia is similar. Growth is expected to be at a standstill in 2011, but could bounce back next year – to 3.9%. The exception to the rule is Iraq, whose economy is rising from the ashes after being devastated by the drawn-out war. The IMF forecasts growth in Iraq at about 9.6% in 2011 and 12.6% in 2012.

What can countries involved in the Arab Spring do to get their economies on the right track? Leaders from Egypt, Tunisia and elsewhere addressed that very question during a recent series of meetings of the World Bank Group and the International Monetary Fund in Washington.

During a seminar organized by the IMF entitled " Beyond the Arab Spring: Restoring Economic Confidence, Meeting Social Needs," Tunisian Finance Minister Ayed Jalloul noted just how far-reaching the challenge was. "As of now, the government is the country's main employer," he said. "It's high time people launched their own projects. It means that the government must act with the utmost transparency. Otherwise Tunisians could start doubting the fundamental values of democracy. "

Mr. Jalloul said measures are being taken to encourage entrepreneurship and help students once they leave university. In Tunisia, unemployment among recent graduates is roughly 40%. "A full 85% percent of Tunisia's industrial production comes from small and medium-sized companies. They are the ones we should be helping," he said.

Shaukat Tarin, advisor to the chairman of Silkbank Ltd. in Pakistan, deems it a priority for the governments of Arab countries to balance their budgets and to create the conditions for the private sector to supply both credit and capital risk insurance. "My country's main problem is its lack of financial assets," said Jalloul.

Will the U.S. keep its promises ?

Ahmed Galal, the Egyptian director of the Economic Research Forum in Giza, expressed serious concerns about the new government's ability to institute vast macroeconomic reforms. "Our transitional government lacks the legitimacy," he warned. "We are currently rewriting the Constitution. Our priority is to ensure fair political leadership that relies on institutions working within a check-and-balance system. "

Internationally speaking, countries in the West and Middle East have promised to help the Arab Spring countries with up to $38 billion in loans issued by international development banks. But it's hard to know if the banks will keep their promises.

As for the United States, President Barack Obama had given his word that he would forgive $1 billion off the Egyptian debt. A Senate commission has just adjusted this help downwards, limiting it to $500 million.

The U.S. Congress has become more hesitant when it comes to assisting countries that were affected by the Arab Spring, particularly because they fear American financial assistance could end up benefiting Islamist movements. President Obama seems to feel differently. Last month, he appointed a diplomat, William Taylor, to handle the aid destined for Arab countries.

Read the original article in French

Photo - Gigi Ibrahim

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FOCUS: Russia-Ukraine War

The Real Purpose Of The Moscow Drone Strike? A Decoy For Ukraine's Counterattack

Putin is hesitant to mobilize troops for political reasons. And the Ukrainian military command is well aware that the key to a successful offensive lies in creating new front lines, where Russia will have to relocate troops from Ukraine and thus weaken the existing front.

The Real Purpose Of The Moscow Drone Strike? A Decoy For Ukraine's Counterattack

Police officers stand in front of an apartment block hit by a drone in Moscow.

Anna Akage

-Analysis-

On the night of May 30, military drones attacked the Russian capital. There were no casualties – just broken windows and minor damage to homes. Ukraine claims it had nothing to do with the attack, and it is instead the frenzied artificial intelligence of military machines that do not understand why they are sent to Kyiv.

While the Ukrainian president’s office jokes that someone in Russia has again been smoking somewhere they shouldn’t, analysts are placing bets on the real reasons for the Moscow strikes. Many believe that Kyiv's real military target can by no means be the capital of Russia itself: it is too far from the front and too well defended – and strikes on Russia, at least with Western weapons, run counter to Ukraine’s agreements with allies, who have said that their weapons cannot be used to attack inside Russia.

If the goal is not directly military, maybe it is psychological: to scare the residents of the capital, who live in a parallel reality and have no idea how life feels for Ukrainian civilians. Forcing people to live with this reality could push the Kremlin to retreat, or at least make concessions and negotiate with Kyiv. If neither sanctions nor the elite could sober Vladimir Putin up, could angry Muscovites?

But neither Russia's military command nor its political leadership depends on the opinion of citizens. And there are enough special forces in Moscow to crush any mass protest.

Laying bare Russian President Vladimir Putin’s inability to guarantee his country's security, in front of Russia’s remaining international partners or among the country’s elites, is also an unlikely goal. The Russian army has already seen such embarrassing failures that a few drone strikes on the Kremlin can’t possibly change how Putin is seen as a leader, or Russia as a state. So why would Kyiv launch attacks on Moscow?

Let's go back to the date of the shelling: May 29 is Kyiv Day, a holiday in the Ukrainian capital. It was also the 16th attack on Kyiv in May alone, unprecedented in its scale, even compared to the winter months when Russia had still hoped to cut off Ukrainian electricity and leave Kyiv residents, or even the whole country, freezing in the dark.

The backdrop: the Ukrainian counter-offensive to liberate the occupied territories, which is in the works, if not already launched.

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