Governments in the Arab world have long subsidized the price of energy. This gives citizens throughout the region access to cheap petrol and diesel, and electricity supplied at below-market rates. But what has been the real impact of subsidies, and do they justify the huge financial burden they place on national budgets? This is a critical question in the Middle East and North Africa (MENA), as the region represents a disproportionate share of the world’s energy subsidies.
Last week, I had the honor of receiving one of the World Bank's FY15 Big Data Innovation Challenge awards for a proposal developed with a team of researchers from within and outside of the Bank. To give you a snapshot of the project, let me recount a familiar story which you may not have thought about for a while. On December 17th, 2010, a Tunisian fruit vendor named Mohammed Bouazizi took a can of gasoline and set himself on fire in front of the local governor's office. Bouazizi’s actions resulted from having his fruit cart confiscated by local police and his frustration at not obtaining an audience with the local governor; his death sparked what we now know as the "Arab Spring." With no other means of voicing discontent and lack of trust, citizens can embrace extreme forms of protest against institutions and governments that quickly escalate.
If you think the summers in the Middle East and North Africa (MENA) region are hot—think again. Summers are likely to become much warmer. Global temperatures are rising; the question now is by how much and what the impact of them will be. People in the region already face very high summer temperatures—and these could get worse. Compared to the rest of the world, the MENA region will suffer disproportionally from extreme heat.
As Tunisia approaches the country’s Presidential elections on November 23, the ‘Arab Spring’ birthplace has a lot to be proud of, having safely wrapped up its first Parliamentary elections since the new constitution was ratified. However, election observers indicate that, as expected, the youth, the revolution’s driving force, remain reluctant to cast their vote.
Hopes are high for Tunisia’s economy to improve after Tunisians voted for a new parliament in October. Pre-election polls consistently highlighted that the economy was the foremost preoccupation of Tunisians. Yet, political debates in the run up to the elections largely ignored longstanding economic problems.
Absurdly complex regulations divide the Tunisian economy between a protected “onshore” sector that sells to Tunisian consumers and a competitive “offshore” sector that exports, mostly to Europe. "It's pointless trying to understand the logic of it - there is no logic," says Belhassen Gherab, head of Aramys, one of Tunisia's largest textile and clothing groups. He gives an example: "Suppose I have a machine that breaks down because one small circuit board needs replacing. If I'm an offshore company, I call up DHL and have it delivered within 24 hours. If I'm an onshore business, I'll have to bring it in through customs. I may be waiting 30 days, with my entire production halted, just for that one circuit board."
The unit that monitors the productivity of Tunisian public institutions and enterprises recently published an aggregate report on the performance of public institutions and enterprises from 2010 to 2012. It is worth paying attention to because the report is both the first of its kind since 2007, and the first to be published on the website of Tunisia’s Prime Minister.
On October 26, Tunisians go to the polls for the first time under their new constitution to elect 217 new parliamentarians to govern their small Mediterranean country for the next five years. Besides the hectic political campaigning, though, another struggle is going on: the gender push.
On a Friday morning in December of 2011, Mohamed Bouazizi, a 26-year-old street vendor, started his day to sell fruits and vegetables from his cart in Sidi Bouzid, Tunisia. But he didn’t have a permit to sell and a policewoman asked him to hand over his cart. He refused. She slapped him.
Bouazizi then walked straight to a government building and set himself on fire. In Tunisia, “dignity is more important than bread,” said his sister. That same day, protests began, quickly spreading via mobile and internet. Soon demonstrations were everywhere in the country. About a month later, the president of Tunisia fled.
Tunisia inspired many in the Middle East to speak up and protest. We know this phenomenon as the Arab Spring. These protesters, mostly young, challenged their governments in at least 20 countries.
Throughout history, young people have used protests to hold governments accountable. Now, their roles in governments are front and center. Today’s youth are poised for greatness: not only are they the largest demographic in the world but they're also the most connected and educated generation.
In any developing country, you’ll hear politicians and government officials talk about foreign investment as a solution, a priority and a need. In other words, it is essential for economic growth and more jobs. Tunisia is no exception. Ever since the 2011 revolution there has been a lot of talk about tackling unemployment by encouraging foreign investments.
The Middle East and North Africa region has a large diaspora. According to the latest United Nations estimates, 11 million citizens from the MENA countries lived abroad in 2013. Many of the members of this group hold prominent positions in their adopted countries. They have the potential to contribute to the development of industries in their countries of origin. Executives in multinationals can influence the choice of locations abroad in increasingly defragmented supply-chains. This is especially relevant for members of the diaspora. Seddik Belyamani, originally from Morocco, was Boeing's top airplane salesman, and was instrumental in converting an initial push-back by Boeing’s executives into an interest and a first mover investment in Morocco.