x Abu Dhabi, UAEWednesday 26 July 2017

Investment can build a bridge for North Africa

The international community has agonised about military intervention in Libya. The difference in Egypt and Tunisia is that targeted economic intervention at this stage could avert a disaster down the road.

Next to every speaker's soapbox in Cairo's Tahrir Square, there is a table offering flags, ribbons and pictures of martyrs of the recent protests. These days, patriotism sells in Egypt, but precious little else does. The country is not only celebrating its newfound freedom, its empty hotels and travel agencies also warn of an impending economic crisis.

As throngs of protesters flooded Egypt and Tunisia's streets over the past month, tourists flooded out. This has not been good news for an industry worth $12 billion (Dh44 billion). In Tunisia, hotels have also remained empty due to unrest - a bad sign for its own $3 billion industry. Local businesses are shuttered, Egypt's stock market remains closed and unemployment levels are rising.

How can the outside world help? In neighbouring Libya, the international community, and western nations in particular, have agonised over possible military intervention.

A different kind of intervention should be a much easier decision in Egypt and Tunisia. Targeted investment and aid to boost employment and stave off business closures could avert a disaster down the road. At the GCC summit in Abu Dhabi today, we hope that foreign ministers are considering what the Gulf can do to help.

These revolutions have only in part been motivated by economic conditions, but at this delicate juncture, worsening standards of living or an economic crisis could trigger further turmoil. Egypt and Tunisia need a period of stability to enact constitutional and political reform, a process that could too easily be derailed by unrest.

Humanitarian organisations and government aid - such as the UAE's relief project on the borders of Libya - have an immediate role to play, to ensure adequate food supplies if nothing else. But North Africa's friends should look further. It will take political stability for economies to get on track and, in the meantime, keeping people employed and earning an income will be a key determinant of stability.

After hesitating to interfere, France pledged economic aid to Tunisia in January to help its transitional government. If distributed responsibly, the aid could help to absorb some of the 60,000 Tunisians who entered the job market last year.

Most private investors will be waiting for stability before taking a risk. The difference for countries with an interest in North Africa is that their investment could help decide whether there is stability or not. Hopefully, tourists will be returning to North Africa in the near future, but investors may have to go first.