Analysts Examine Arab World Finances, Missing Aid
The Financial Times released a special report entitled “Arab World: Banking and Finance,” with key articles on Bahrain, Egypt, Lebanon, Saudi Arabia, UAE, and Qatar. Simeon Kerr wrote on Bahrain, noting the country is still recovering from unrest that saw bankers caught in tear gas clouds and police clashes with protesters. A decline in foreign deposits of roughly six percent in the second quarter of 2012 was noted, compared with the same period last year. However, the Bahrain argues it has managed to grow its finance sector since last year.
Egypt is “far from being an attractive financial center for a variety of reasons,” said Wael Ziada, head of research at ER\FG-Hermes. Ziada mentioned, “Egypt needs to improve the ease of doing business, lessen bureaucracy and foster innovation and efficient legislative authorities.” In the article, Amira Salah-Ahmed noted the Egyptian stock market fell after the 2011 uprising, but has recovered 5o percent of its value in 2012.
Abigail Fielding-Smith noted the financial sector in Lebanon was left relatively unscathed by the uprisings in the Arab region. Although profits have slowed, they are continuing to be posted, while deposits and loans are increasing. However, the central bank governor, Riad Salameh, said in an interview that events in Syria were affecting the Lebanese economy and banking sector. Chief economist at Byblos Bank, Nassib Ghobril, expects current trends to continue “until we see a positive shock politically that would raise investor and consumer confidence.”
Meanwhile, in special report released in the New York Times, Sara Hamdan said many international donors, who were quick to pledge aid to Arab Spring countries to help reconstruct their economies, have not delivered what they promised. “The need for external financing is definitely more urgent now,” said Trevor Cullinan, a director at Standard & Poor’s in Dubai. Although countries around the world continue to pledge financial aid, the flow of aid has been slower and smaller than anticipated.