As per a senior International Monetary Fund official announced that, The MENA (Middle Eastern and North African) policy makers require for enduring around an accommodative fiscal as well as monetary procedures, while nations can swiftly fast-track their economic recovery momentum from the COVID-19 Pandemic through investment via greener infrastructure, technology as well as digitalization.
Jihad Azour, the director of the Middle East and Central Asia department at the IMF stated that the recovery across nations is uneven as well as hinges on the vaccination roll out, suppression measures as well as capacity for nations for limiting the scarring from the Pandemic.
Mr Azour also announced that “We see certain improvements in some of the fundamentals like oil price, the level of low interest rates, some countries bouncing back, but the fog of uncertainties of the second and third wave of the pandemic … are casting a shadow on this year. “We need to accelerate the recovery because to regain the levels of Pre-Covid we need still more effort. We will not regain this before 2022 and we don’t want to have a lost decade whereby we will be slower with reforms and slower in recovery.”
The economies of the Mena territory are projected to nurture 3.1 percent this year post diminishing 3.8 percent in 2020. Nations that have fast-tracked the vaccination could benefit from an additional 0.3 or 0.4 percent evolution this year. Those behind it could lose 0.3 percent or 0.5 percent.
For an illustration, Mr Azour stated that despite the roadblocks Palestinians faced in the initial wave of the pandemic and the second, their economy, which bank on largely on donor aid, accomplished the initial wave “in a relatively good way.”
Mr Azour stated that 2021 is a year where the territory finds itself in a “race between the virus and the vaccine, and a recovery … will hinge on three important factors; access to vaccines in terms of inoculation, the strength of the policy response; fiscal monetary all that has been deployed over the last few months and the impact of the global economy on the region, on the oil price, and the global outlook on interest rates.”
Iran, which has the largest number of Covid-19 infections in the territory at over 1.4 million, may witness an economic recovery of between 3 to 3.3 percent expansion in 2021, after diminishing 5.7 percent the previous year.
Lebanon whose economy remains tight-lipped 25 percent in 2020, might witness an additional shrinkage of 9 percent this year by dependent on the capacity of forming a cabinet and executing desirable reforms, as it encounters the pandemic, Mr Azour said.
Central banks across the Arab League have rolled out a batch of financial measures to provide liquidity, provision banks and comfort the debt apprehensions for borrowers, by dipping interest rates and capital reserves necessities of lenders, as administrations provided fiscal stimulus to bolster the influence of the pandemic on economies.
“Countries that still have fiscal space need to target further and focus on where the issues are in 2021. The capacity of countries to provide additional support explains the disparities that we see in terms of recovery,” Mr Azour said.
“Nations who have lower level of debt are in better shape. Those who have restricted or no fiscal space need to re-allocate their resources and readdress expenditure on the priorities and requirement to be much more proactive in their policy making.”
As per the International Labour Organization, while vaccinations are core to get going evolution and revitalizing economies, sustained fiscal and economic provision is perilous to preventing socio-economic disparities from widening, protecting businesses and mitigating rising unemployment. Arab Nations are anticipated to have the comparable of one million fewer full-time jobs this year, related to pre-crisis levels.
The Covid-19 pandemic which leaned the global economy the preceding year into the nastiest recession since the 1930s witnessed the governments and central banks globally discharge more than $12 trillion in fiscal and economic impetus to steady financial markets, provision their economies and guard jobs.
While banks in the MENA territory are well benefitted from with a good level of productivity and central banks have taken the essential measures, the expanding health crisis means “there will be a risk of increase in non-performing loans,” Mr Azour said. “This is why in terms of policy recommendations, countries that have the capacity, should extend the measures.”
He said technology was influential in subjecting an access for those in the informal sector in nations like Morocco or Egypt. In Morocco, mobile technology was utilized to provide admittance for direct sustenance for more than 5 million families. The binding of technology in GCC nations was notable and simplified good remote education and telemedicine.
The pandemic “showed that investment in good quality infrastructure paid off. Technology is not only to provide a platform for business, but also a platform for enablers; education, access to good quality remote education, access to healthcare, all these elements proved to be very important”, he stated.
“Those trends are going to accelerate and are going to divide communities and countries. This is why we are calling for a focus on accelerating these trends in order to close the gap between those who recover fast and those lagging.”
“Those are important elements and will play a big role in the future. The fact that countries of the GCC have invested in 5G, this is a very good step forward,” Mr Azour said. “Technology will help fast-track the recovery but also condense the gaps between social groups and aid in the inclusion of women and the youth. Technology is also successful to be very imperative for nations in terms of being able to contribute in the value chain.”
