Arab Spring bad for region's economies says UN report

Wave of pro-democracy uprisings across the Middle East and North Africa is stalling economic growth in countries affected, says report on progress towards achieving the UN¿s anti-poverty targets.

NEW YORK // The wave of pro-democracy uprisings across the Middle East and North Africa is stalling economic growth and threatens to reverse gains made over recent years against poverty, hunger and inequality, the UN warns.

The non-oil producing countries of North Africa are "particularly affected" by the political upheaval, according to an annual report on progress towards achieving the UN's anti-poverty targets, the so-called millennium development goals.

"The consequences may slow down some of the development progress in the region over the next few years, especially if no aid is given to the hardest-hit countries, such as Egypt," the UN said in a statement accompanying the report.

Protests are also hurting the economies of Yemen, Syria and Bahrain and "may make it even harder" to reduce the proportion of people living on less than US$1.25 a day - the global benchmark poverty level - until "stability is restored", it said.

Francesca Perucci, a UN statistician, said the long-term economic fallout from the Arab Spring remained to be seen.

Democratic governments are better at stimulating economic growth, she said. Long-term projects to improve sanitation, health care and literacy rates are rolled out over years and are not likely to be affected by protests.

"If the crisis is resolved, it will probably have an outcome that leads to stronger democracy, better people-participation and progress will continue or even accelerate," she said. "So I wouldn't put it so negatively on the people who are out on the street trying to achieve something better for their lives."

Protesters have taken to the streets from Morocco to Yemen in the past six months to demand more political rights and complain about financial hardship and youth unemployment rates that exceeded 25 per cent in some areas.

The turmoil has caused a "temporary stagnation" in economic activity as shops and factories close their doors and revenues from trade and tourism dry up, the UN warns, threatening to derail progress against joblessness and poverty.

Ms Perucci said the protests will "slow down or stall" market growth and create short-term spikes in unemployment that reduce the amount of money the poorest people can spend on food, housing and other basics.

This month, Mthuli Ncube, the chief economist of the Africa Development Bank, said North Africa's economic growth will plummet to 0.7 per cent this year from 4.7 per cent last year.

The International Monetary Fund says North Africa's non-oil producers have been hit by reduced trade and investment flows and an exodus of migrants from Libya.

The 72-page report was released yesterday, almost six months after the removal of the Tunisian President Zine el Abidine Ben Ali and presents data from before the Arab uprisings began in January. It updates the global progress, begun in 2000, towards empowering women, overcoming hunger and halving the number of those living in poverty.