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arab spring


V. Shankar, CEO, Standard Chartered Bank, Europe, Middle East, Africa and Americas


“The key requirement right now for countries in transition is to carefully manage the expectations of the general population and keep them anchored”.


A common theme among all emerging


a rise of around $25 a barrel since 2008, and it is close to present spot oil prices. “In terms of a global slowdown, if


there is a reduction in oil prices, that would naturally translate into budgetary consequences for Bahrain as it would for other countries.” The fiscal break-even oil price could


represent a worry for those MENA countries affected by political transition and seeking the anticipated substantial financing from the cash rich Gulf. The UAE, for example, now has a fiscal break-even oil price of around $80 a barrel and this is a massive leap of $60 in just three years and if oil prices tumble for an extended period, as they may well do in a severe global downturn, the country may become less inclined to channel investment to needy regional partners at a time when it would need to tap into its own reserves. Irrespective of the potential for


investment from the likes of the GCC, the key requirement right now for countries in transition is to carefully manage the expectations of the general population and keep them anchored. Masood Ahmed explained that a big challenge moving forwards is to balance “social cohesion on the one hand with maintaining macro-economic stability on the other”.


72 / DECEMBER 2011


markets in the region, whether in transition or not, is the need to generate employment opportunities. The expansion of the private sector and effective infrastructure development projects can be ways of doing this but Dr. Saidi sees a huge task ahead. “We have countries in which 60 per


cent of the population is below 25 years of age and the unemployment rate is reaching 30-40 per cent and at the same time we know that we need to be creating some 80 million jobs over the next decade. That’s about as many as we’ve created since the 1950s.” One of the panellists at the IMF launch, V. Shankar, the CEO of Standard Chartered


Bank, Europe, Middle East, Africa and Americas said “quick, precipitate action” was needed in the countries in transition to placate the population – and this effectively meant job creation. “It is nice to talk about diversification,


improving governance and all the good things you need to do, improving education, improving healthcare. But remember all of that is long-term stuff. It is going to take 15-20 years for the benefits of all that to actually come through to the vast majority of the population.” For Shankar, if the new governments of the nations in transition do not provide these “quick wins”, then the Arab spring could rapidly become a “winter of discontent”.


Oil importing nations, such as Syria, will be hoping the GCC can offer genuine assistance.


GETTy iMAGEs


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