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Economic Brief - Promoting crisis-resilient growth in North Africa

13-Nov-2014

Key messages

• The Arab Spring was an internally generated crisis, the result of two interwoven processes relating to the patterns of growth and crisis resilience in the region. While North African countries enjoyed moderately high growth between 2003 and 2010, notwithstanding the two crises (food and financial) that hit the region during that period, growth was not inclusive and benefits were not shared broadly across sectors or widely across groups. While North African governments took steps to strengthen crisis resilience at macroeconomic level, they generally failed to protect small businesses and poor households.

• Hence, instead of promoting crisis-resilient growth, North African government policies have been producing growth-inhibiting crises. The Arab Spring caused more damage to North African countries’ growth trajectories and fiscal capacities than the two previous crises combined. The internally generated crisis also weakened sectors that had previously appeared resilient to external shocks – suggesting that crisis resilience is not possible over the long term unless inclusive growth is a part of the overall strategy.

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