Countries in the Middle East and North Africa (MENA) have long endured economic deficiencies, political corruption, and social grievances that ultimately led to the Arab Uprisings in 2011. Long-term structural challenges, compounded by the COVID-19 pandemic and the war in Ukraine, have led to financial, political, and socio-economic crises of unprecedented gravity in the MENA region. These crises are exacerbated by the daunting prospects of stability and development and the lack of credible medium- to long-term visions for addressing the structural weaknesses of MENA economies. The Political Economy Program will analyze the different crises afflicting the region, examine the politics of austerity and inequality, and review the adjustment and transformation challenges many economies are facing. The program will also examine the geopolitical consequences of economic and financial crises and the increasing use of economic instruments, such as investments, trade, and energy, as regional policy tools.
President Kais Saied has won a second term in office, but his country is facing a host of problems that necessitate urgent reforms, above all preventing the possibility of a financial meltdown.
Tunisia’s extensive social expenditure has proven to be both unfair and inefficient, further worsening the country’s financial problems. However, this substantial spending has allowed Saied’s regime to buy time and keep the country afloat until the elections. Now that the elections are over, persisting with this approach risks fueling a vicious cycle that could lead to social instability.
To halt its slide toward bankruptcy, Tunisia needs to restore the independence of its central bank and send a very strong signal of reforms to international investors and financial institutions.
Unless Tunisia undertakes much deeper structural change, Saied’s modus vivendi with big business will lead to increasing economic gridlock.
The kingdom’s trajectory in the last quarter century has been characterized by an ambitious modernization program, greater sustainability, and entry into global value chains, despite socioeconomic challenges.
Suyash Rai discusses how coalition politics can benefit the Indian economy by fostering credible commitments, enabling policy learning, and allowing state-level experiments. He emphasizes that while coalition politics has its advantages, economic outcomes depend on active citizen involvement.
The Gulf Cooperation Council has shifted its energy export focus to Asia, particularly India and China. This is part of a broader shift as GCC members look to expand their geopolitical alliances away from the West.
The Middle East and North Africa is characterized by inequalities, and this will have profound consequences for economic growth, social cohesion, and, ultimately, political stability in the region.
Since 2011, Tunisia has been heading for a macroeconomic crisis—large deficits, shrinking fiscal space, and difficult negotiations with the IMF. In this election year, policymakers face high stakes: A hard economic adjustment risks sociopolitical crisis, but without correction, the country faces a future economic meltdown.
The Middle East and North Africa have been hit by food, energy, and debt crises that have exacerbated structural economic weaknesses of low- and middle-incomes countries, particularly Egypt, Tunisia, and Lebanon.
