Arab Index shows anger over sinking economies, poverty and inflation

Arab Index shows anger over sinking economies, poverty and inflation
A comprehensive new index has shown that inhabitants of the Arab world see poor economic conditions as the most important challenge facing their countries.
6 min read
03 January, 2023
People across MENA countries appear to be growing increasingly frustrated with how their governments are dealing with their economic crises [Getty/archive]

Citizens of the Arab world are becoming increasingly worried about their socioeconomic situation and feel their governments are not doing enough to improve living conditions and their economies, a study has found.

In its 2022 report released on Tuesday, the Arab Center for Research and Policy Studies (ACRPS) surveyed the citizens of 14 Arab countries from the Gulf, Levant, and North Africa, asking them their views on issues ranging from political activism, economics, society, religion, social media use, and more.

The study found that 52 percent of citizens interviewed believed their countries were generally heading in the "wrong direction" compared to 42 percent who gave a positive answer.

This has left millions of families reliant on handouts and forced to sell properties due to a lack of support from governments.

People were unhappy with the course of events in their countries citing different reasons, mainly the state of the economy, political instability, and poor governance. 

Political stability, good governance, or an improvement in their countries' safety, security, or economic situation were the main reasons given by those who responded positively.

Only five percent said they had a sense of optimism for the future.

The only three countries where more than 50 percent of respondents said they saw their countries going in the "right direction" were the Gulf states of Qatar, Saudi Arabia, and Kuwait.

Only three percent of Lebanese respondents gave a positive answer, the lowest among all 14 countries.

Lebanon has been in the midst of its worst-ever financial and economic crisis for the past three years, with its currency losing around 95 percent of its value and a large percentage of its population slipping into poverty. 

Depositors’ savings are frozen in the country's banks, which have imposed strict regulations on how much money people can withdraw. 

The situation has been exacerbated by an acute energy crisis as well as the massive explosion at the Port of Beirut on 4 August 2020, which killed more than 200 people, injured thousands, and caused wide-scale destruction.

The country has also not had a president or a fully functioning cabinet since the start of November due to political bickering among the sectarian ruling class.

On their countries' socioeconomic situation, only 25 percent of respondents told ACRPS that their families’ income was enough to both afford necessities and put savings away.

The biggest share of respondents – 42 percent – said that their families were able to cover basic needs, but did not have enough money to save, while 28 percent stated that their families were in need and did not have enough money to cover their expenses.

A quarter of respondents said that their income was more than they needed in 2022, compared to 27 percent in 2019/2020. Another 28 percent said they did not have enough money in 2022, compared to 26 percent in 2019/2020.

Only seven percent of Gulf respondents said that their incomes were not enough to cover expenses, compared to 47 percent in the Levant, an area that includes Lebanon, Jordan, Palestine, and war-torn Syria.

Relentless inflation has struck economies in the Middle East and North Africa in 2022, leaving the poor and middle-class exposed and vulnerable to price shocks. 

Food prices across the region have spiked massively as global energy supplies respond to Russia's invasion of Ukraine, and climate change continues to affect crop yields throughout the region.

The study showed that 33 percent of families in need turned to acquaintances, friends, and relatives for financial help. Sixteen percent of them rely on aid from friends and family, while 13 percent depend on loans from banking and financial institutions.

Aid from charities was the main source of income for families, according to 18 percent of respondents, while 10 percent resorted to selling their properties.

ACRPS said this showed that social solidarity with those in need remained greater than the work of charitable institutions in vulnerable societies.

Overall, 83 percent of respondents in Qatar – which recently hosted the 2022 FIFA World Cup – said the economic situation in their country was "very good," compared to two percent each in Iraq, Jordan and Palestine.

Only one percent of respondents in Algeria, Tunisia, Sudan and Lebanon thought the economy in their countries was "very good."

Tunisia is reeling under a difficult economic crisis and increased political tensions, forcing many to make the dangerous migrant boat voyage to Europe by sea.

Sudan, one of the world's poorest countries, has also suffered from instability and a dire economic crisis for years, especially since the military coup in October 2021.

Studying the priorities of people across these Arab countries, the study showed that the majority of respondents want to see governments handle their economies better and improve their economic situations.

Stating that unemployment, inflation, and poverty were the most important challenges facing their countries, 60 percent of overall respondents said the economy was their top priority.

Another 16 percent said their priority was improving government performance in poor public services, financial and administrative corruption, and democracy.

Safety, security, and political stability was the main concern of 12 percent of respondents.

A desire to migrate had increased from 22 percent in 2019/2020, to 28 percent in 2022.

The region with the biggest share of respondents who said they wished to leave their countries were from the Levant, with 41 percent, while in Egypt and Sudan it was 36 percent.

A currency crisis and rising inflation is leaving Egyptians uncertain about the future.

The country’s economy has been hit hard by the coronavirus pandemic, years of punishing government austerity measures, and the fallout from the Russian invasion of Ukraine. Egypt is the world's largest wheat importer, and most of its imports come from Russia and Ukraine.

Many Egyptians are sceptical that a new International Monetary Fund (IMF) package will benefit them at all.

Another 28 percent from the North Africa region - Morocco, Algeria, Tunisia and Mauritania - said they wished to emigrate, compared to only six percent in the Gulf.

Seven percent of respondents voiced concerns about a lack of stability in general.

The remaining respondents gave no answers.