Economists’ continued concerns about the political and economic health of the region has seen it lose 0.9 points this year, with Syria’s implosion the largest score driver.
For now, the MENA region retains comparative stability in the eyes of economists, given the tumultuous events that overtook the region in 2011. The MENA region’s average score of 48.6 is 3.5 points above Latin America, despite a larger score decline, and 1.3 points above Central and Eastern Europe, whose score declined at a greater rate in 1H 2012. Yet while the region’s oil producers remain insulated from the worsening global outlook, declining economists’ scores point to concern that the area as a whole is not immune from external factors, and that individual states remain vulnerable to domestic issues.
Conflict-riven Syria has seen by far the biggest economic decline. Syria has suffered the largest score deterioration in the ECR survey since January, suffering a 6.8 point drop in its overall score, and a 12-place displacement in the rankings, to 153rd globally. The country has exchanged places with Libya, where sentiment has improved since the overthrow of the Gaddafi regime, and the resumption of oil production.
By contrast, economic scores for five of the six Gulf Cooperation Council members – Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates; Oman the exception is unchanged – have improved as the recycling of oil and gas revenues and the perception of stronger banking systems insulate the region from eurozone contagion. The comparative economic strengths of Iraq and Israel are also reflected in improved scores.
Iran, Syria and Yemen have the weakest economies, weighed down by domestic concerns and reduced exports. If all three are removed from the equation, the MENA region would boast an economic score of 61.8, better than the eurozone.