Due to changes in the global economy, oil exporters, especially those in the Middle East, must diversify into other industries in order to survive, states CNBC in a recent article. This is nothing new, but is becoming more urgent.
Countries such as the United Arab Emirates have began changes long time ago. Dubai, for example, has become not only a financial center, but a tourist destination as well. Now, Egypt is looking to make changes. Recently, International Monetary Fund’s leader, Christine Lagarde, praised Egypt for making significant progress with economic reforms. Ms. Lagarde admitted that it will take time before these structural changes take effect and make things better, but they still are needed.
Egyptian economy is now growing at 5 percent a year, a vast improvement from a deep crisis after the Arab Spring. Due to political turmoil and terrorist attacks, tourism has dropped, affecting many people. Back in 2016, IFM provided a $12 billion bailout to the country. There are other encouraging signs. Inflation peaked at 35 percent last July, but is expected to drop to 12 percent this year.
Still, there are many unresolved problems. The country’s population of 90 million continues to rise, making it difficult for the economy to give jobs to all young people. And that can lead to more unrest.
There are encouraging signs from other countries in the region, too. For example, Morocco has been doing fine lately when it comes to economic growth and stability.