The Arab Spring drained more than US$8.6 billion (Dh31.58bn) in bank deposits from Egypt and Libya in the first three months of the year, according to the Bank for International Settlements.
Video:Investors pull $8.6 billion from 'Arab Spring' countries
Gregor Hunter looks at the capital flight from countries such as Egypt.
Watch this video in full screen
International banks reported sharp rises in deposits from the two countries during the period, a trend that the international banking organisation attributed to political upheaval diverting funds away from Egypt and Libya.
"These developments most likely reflected domestic funds being moved out of the two countries as a result of the elevated levels of political and economic uncertainty," the report said.
Capital flight occurs when investors withdraw large amounts of money from a country.
Egypt, the most developed banking market in North Africa, lost $6.4bn to the outflow during the period.
Deposits by Libyans in international banks increased by $2.2bn during the period, while Tunisia, where the government of Zine El Abidine Ben Ali was toppled in early January, suffered capital flight of $29m during the quarter. During the same period, international bank deposits from UAE residents increased by 23 per cent to $17bn. The report attributed this to a surge in local wealth created by soaring oil prices.
Oil prices rose sharply after high-grade Libyan crude was removed from world markets as a result of the country's revolution. Brent crude futures rose 24.3 per cent to finish the first quarter at $117.25.
The increase in deposits among international banks in the UAE could reflect capital flight from countries where revolutions have taken place to the safety of the Emirates, which has not witnessed political unrest, said Jaap Meijer, a financial analyst at AlembicHC.
"It may be that people have more money in the UAE," he said. "Or they might be having some hot money from other markets."
However, bank deposits in the UAE have sunk since their peak in April, decreasing 1.3 per cent to Dh1.11 trillion, according to the latest data from the Central Bank.
"It could be monthly noise, but it could be that when stability returned in other markets, the UAE loses a little bit its safe haven position," Mr Meijer said.
However, the reduction since April could reflect people withdrawing money from bank accounts to go on holiday, Mr Meijer added.
ghunter@thenational.ae
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May 2017
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September 2021
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October 2021
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December 2024
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May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
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August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
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Global state-owned investor ranking by size
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Norway
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If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
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3. More tax audits
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4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
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6. Further transfer pricing enforcement
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Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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