As the political landscape is reformed in parts of the Mena region, financiers and bankers are wondering whether the changes will be a force for good or otherwise. There is no easy answer.
Middle East and North Africa region faces mixed fortunes
Sulaiman al Mazroui, an executive with the UAE's banking champion Emirates NBD, is quick to point out the significance of the turmoil engulfing parts of the Middle East.
"We are witnessing the biggest changes in the region since the decline of the Ottoman empire," Mr al Mazroui told an audience last week at Dubai's Capital Club.
In the space of a couple of months, old certainties about the Arab world have been swept away, along with some of the rulers who have dominated the region for decades.
But the bankers and financiers at the Capital Club wanted to hear more about the economic and financial repercussions of the changes. Above all, the audience wanted an answer to one big question: will the transformation of the region's political landscape be a force for good or otherwise for the region's economies?
There is no clear-cut answer. Some believe the changes will liberate the economies of the Mena region and usher in a new age of dynamism and entrepreneurialism. Others see a period of chaos and instability that can only damage financial markets and commercial order.
Still others believe the rest of the world will slow the flow of foreign investment on which many economies in the region depend.
Already there have been signs that is happening. Tarek el Refai, an Egyptian banker with the US bank BNY Mellon, has years of experience in the region. Mr el Refai estimates some US$16 billion (Dh58.76bn) of foreign capital has left Egypt since the start of the turmoil.
"We don't see any great influx of investment into the region in the short term", he says.
A recent study by HSBC Middle East underlined the repercussions for the wider Mena region.
"Foreign capital flows are likely to be very weak," said the report by the bank's economic team, based in Dubai. "Access to international debt and equity markets is likely to be curtailed until a convincing new order has been established and foreign direct investment plans are likely to be out on hold."
For Egypt, the most populous state in the Mena region, which suffered severe disruption in the period leading up to the resignation of the former president Hosni Mubarak, the challenges were highlighted when the Cairo stock exchange reopened after a long closure. The index fell like a stone on the first day as mainly foreigners pulled out of Egyptian investment.
Coupled with a threat to the country's vital tourism industry, which earns it billions of dollars in hard currency every year, that makes for a depressing picture, at least in the short term. As for the long term, Mr el Refai believes there are some encouraging signs.
"The stock market has gained around 5 per cent average [a day] since the first big falls, which shows the fundamentals of Egypt's economy are unchanged," he says.
"The market is deep and remittances [from expatriate workers in other Mena states] and tourism will endure. Already, things are getting back to normal."
In Tunisia, the country that sparked the "Arab Spring" when its president Zine el Abidine Ben Ali was forced from power in January, the transition to stability has been more or less orderly.
Dr Jamal Zarrouk, a Tunisian banker who heads economic research for the Arab Monetary Fund, says the economy is recovering from the problems of the early days. "We are moving slowly towards a form of parliamentary democracy and the economy is moving away from disarray and stoppages," Dr Zarrouk says. "The speed of that recovery will depend very much on the elections in July."
In Libya, the transition to democracy is still uncertain and laden with dangers. The country under Muammar Qaddafi was a major oil exporter, but he maintained a largely "closed" financial system that did not encourage foreign investment.
Hatim Gheriani, a Libyan executive with HSBC and the former chief investment officer of the Libyan Investment Authority, remains optimistic about the long-term prospects.
"The removal of Qaddafi will be like an exorcism for the economy. Money can work miracles, and we have plenty of oil money, if it is properly used," Mr Gheriani says.
Nonetheless, the professional economists are sceptical that Mena economies will bounce back, at least in the short term.
"We find it hard to imagine the region can simply return to the status quo," the HSBC report said. "The events of the first quarter of 2011 will have lasting negative economic consequences. Even in the more politically stable countries of the region, we expect more sluggish private-sector growth performances as perceptions of regional political risk arise, reducing confidence among lenders, investors, tourists and consumers alike."
There is a danger, HSBC warned, that the divide between the oil producers and non-oil producers will widen and exacerbate the asymmetric economic development of the Mena region.
"For the region's oil producers, higher prices and production will keep them in surplus even as they expand [state] spending, mitigating the impact of this lower private sector growth," the report said.
"For the non-oil producers, rising commodity prices will exacerbate already weak fiscal positions, potentially crowding out the private sector and keeping unemployment levels elevated."
The economic fall-out of the unprecedented political situation in the region will not be evenly spread.
"The economic impact of recent events will vary from state to state and promises of increases in spending will support domestic demand. As a consequence, we have cut our forecasts for 2011 non-oil growth in virtually every Mena state, and cut our projections for the economies that have been most directly affected by as much as 6 percentage points," said HSBC, downgrading Egypt and Bahrain significantly.
The message is the Arab Spring will reduce the overall size of the economic cake in the region, even if some countries, mainly oil-producing Gulf states such as the UAE and trading centres such as Dubai, manage to carve out a bigger slice.