Azerbaijan, Baku, Feb. 18 / Trend A.Badalova /
The wider economic and political reforms will be needed soon across Middle East if more serious unrest is to be avoided in the future, analysts of one of British leading consulting companies for economic research Capital Economics said.
According to the report of Capital Economics, the risk of 'regime change' in other Arab countries remains low for now, but varies across the region. In the cash-rich GCC (Gulf Cooperation Council) the risks are lowest, with the possible exception of Bahrain, as governments are able to spend their way out of any potential unrest. This is not the case everywhere, the report said. Other countries have taken short-term economic and political measures, such as price subsidies, which are likely to reduce the risks. These measures may calm protests for now, or at least reduce the scale of protest.
After nearly three weeks of mass protests in Egypt, that killed and injured hundreds of people, President Hosni Mubarak resigned on February 11. The power is now in the hands of the Supreme Council of the Armed Forces, headed by Defense Minister Mohamed Hussain Tantawi, Mubarak's personal friend.
Since early February, the unrest have also broken out in Algeria, Jordan, Lebanon. Bahrain is the latest Arab country to see violence erupt amid protests that have been sweeping the region. The protests in the Kingdom of Bahrain reached the capital of Manama on Feb. 15. After Bahrain, the protests immediately began in Libya.
Capital Economics' analysts expect no significant changes in economic policy of Egypt over the next six months. Economically, the country's interim leaders will focus on returning to "business as usual" for the time being, analysts said.
According to British analysts, in Egypt the near term economic prospects remain poor.
The impact of falls in tourism revenues, foreign investments and worker remittances will hit the economy hard, analysts said. These three sectors together accounted for more than 13 percent of GDP in 2010.
Analysts expect the economic growth in the country will suffer this year and the scale will depend on political developments that are yet uncertain. They expect that GDP will grow no more than 3 percenta this year.