Arab spring and economic challenges : an analysis of Bahrain, Egypt, Jordan and Tunisia.

Abstract

The series of protests and demonstrations across the Middle East and North Africa which became known as the Arab spring, spread uncertainty in the economic and financial sphere, destabilizing non-solid economies even further. Bahrain, Egypt, Jordan and Tunisia were all affected by this phenomenon but each country handled it differently. This paper treats the financial economic background of those four Arab countries affected by the recent turmoil and gives specific recommendations. The pillars of my analysis will cover different economic and financial aspects in our four countries. I will start with the pre-cursors to capital market development where I will talk about the ease to conduct business. I will also analyze foreign direct investment by providing a background and a benchmark for Arab countries followed by a specific analysis for our four countries of interest. I will deal further with publicly traded corporations, the banking sector and its governance where I will study firm performance and RandD levels followed by an analysis of the banking system size, performance, riskiness and governance. The last chapter talks about major political events of the Arab spring and links them to the 2011 stock exchange and market performance of our four countries of interest. I will provide a micro-analysis followed by relevant specific recommendations in harmony with each of the Bahraini, Egyptian, Jordanian and Tunisian financial economic background.