Weak economic growth in Europe had a negative impact on exports The volume of exports from the Arab region has been highly volatile in the past few years. Annual exports increased by 4.6 in 2012, mainly driven by high oil prices and exports from GCC countries. The volume of exports from Mashreq countries and LDCs dropped significantly in 2011 and 2012. The decline of LDC exports was mainly due to conflict in the Sudan, while in Mashreq countries, it stemmed from instability in Egypt and the Syrian Arab Republic. In 2010 and 2011, calls for protectionism due to economic recession in the developed world did not restrict market access for Arab countries. Nevertheless, weak economic growth in Europe, a main trading partner for most Arab countries, did have a negative impact on their exports. The region’s current account balance as a percentage of GDP was positive in the last five years, mainly as a result of surpluses in oilexporting countries. In 2011, the current account balance reached 13.9 per cent, but it declined to 13.5 per cent in 2012, largely driven by GCC countries (figure I-53). In contrast, Mashreq countries and LDCs have alarmingly large and increasing current account deficits.
Target Address the special needs of the least developed countries Although official development assistance to the Arab region is increasingly untied, it is still low and volatile Official development assistance (ODA) allocations are far below the levels required to address the special needs of Arab countries, particularly LDCs. Total ODA to the Arab region (excepting GCC countries), measured by constant 2010 US$, had significantly decreased from US$19.1 billion in 1990 to US$11.8 billion in 2011 (figure I-54). LDCs had registered a small increase of ODA allocations, mainly due to a substantial increase in support to the Sudan. However, other LDCs experienced stagnation and even decline, for some. Mashreq countries also saw a decline, despite continued significant commitments to Iraq and Palestine. ODA in the Arab region is marked by high volatility. Sudden spikes are almost always conflict-related and/or due to political stances of donors. Examples include Egypt in 1990, Iraq after 2002, and Lebanon and Palestine after 2007. Such fluctuations are far less noticeable in Maghreb countries, but this trend may have changed starting 2012 due to political transitions in Tunisia and Libya.
FIGURE I-53 Current account balance, percentage of GDP 30 25 20 15 10 5 0 -5 -10 -15
2008 Maghreb
2009 GCC
2010 LDCs
Mashreq
2011
2012
Arab region
Source: IMF, 2012c.
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