AMMAN - Despite economic pains that ravaged the Arab world following popular protests that swept three autocratic leaders from power, hopes are running high for a major economic boom in the region following the unrest.
"The Arab Spring accelerated a trend which was already happening: the leveling of the landscape in a very dramatic way," Mustafa Abdel-Wadood, chief executive of Dubai-based Abraaj Capital, told Reuters.
"It triggered a sense of accountability. People don't accept the use of political influence as they used to," added Abdel-Wadood, whose company is the Middle East's largest private equity firm with over $6 billion (3 billion pound) under management.
The Arab world has been hit by popular protests that swept the leaders of Tunisia, Egypt and Libya from power.
The unrest has brought down many businesses and caused thousands of people to lose their jobs.
Mazen Dajani, chief executive of Jordan's CTI Group, says his company, one of the world's largest shippers of cement, was badly hurt by the political turmoil.
"The Arab Spring turned the company from profit to loss for the first time in almost 10 years," said Dajani, 46, a member of an influential Jordanian-Palestinian merchant family.
He said CTI's shipments to Egypt plunged during the uprising against Hosni Mubarak early last year and have yet to recover.
The company's deliveries to Yemen were disrupted by unrest there while trade with Libya is still suspended despite the end of last year's civil war.
The company is projecting only about 12 to 14 percent of its business will come from the Arab world in 2012, compared with at least 30 percent in normal times.
Estimates from the International Monetary Fund suggest the six Arab countries which experienced the most serious unrest - Bahrain, Egypt, Libya, Syria, Tunisia and Yemen - lost around $50 billion in output last year, or 11 percent of their combined 2010 output.
Egypt may have lost some $10 billion, while the IMF estimates Libya's economic output halved to $35 billion.
Every other Arab economy in North Africa and the eastern Mediterranean was affected to some degree.
Despite the gloom, many businesses aspire to a major economic boom after the political turmoil.
"I see it and feel the breeze of change when I talk to fellow bankers and businessmen," Adnan Ahmed Yousif, chief executive of Bahrain-based Al Baraka Banking Group, an Islamic banking conglomerate with operations across North Africa, told Reuters.
Yousif, also chairman of the Beirut-based Union of Arab Bankers, said the Arab Spring had only a "marginal" impact on his firm's earnings last year.
He detects a new dynamism in many economies in the Arab world, where about 60 percent of the 350 million people are under 25.
In Tunisia, a new government elected in October is spending to create jobs and opening areas of the economy to fresh investment, Yousif said.
Last month, Tunisia's parliament approved a 7.5 percent rise in spending in the government's 2012 budget from the previous year.
Ousted president Zine Al-Abidine Ben Ali's extended family owned big interests in sectors such as telecoms, news media and banking, crowding out potential competitors; that network is now being dismantled, which may create new opportunities.
Yousif said Baraka has applied to open two new branches in Tunisia, which would bring its total number of branches there to 12.
In Egypt and other countries, bankers have become freer to lend without political interference, Yousif said.
Libya is moving towards easing curbs on privately owned banks, after years of tight restrictions.
New opportunities for Islamic banking are opening up in countries including Morocco and Oman.
"I expect the role of a private sector which was once stifled by governments to grow in the years to come, as change brings more competition and openness," Yousif said.
But this hoped-for economic boom faces major challenges.
Two of the Arab world's biggest economic problems - high youth unemployment and an unequal distribution of wealth - sparked the protests and have not improved.
According to a United Nations report in 2009, Arab countries would need to generate 51 million new jobs by 2020 to absorb new entrants to the labor force.
Youth unemployment in the region averages more than 23 percent, the International Labour Organization says.
Erik Berglof, chief economist at the EBRD, says the need to generate huge numbers of jobs makes the Arab world's situation more difficult in some ways than the challenges which the former Soviet bloc faced two decades ago.
"There was a more even distribution of wealth in Soviet economies and unemployment was not so high," said Berglof, whose bank was set up to help finance and advise ex-Soviet economies and is now expanding its mission to aid Arab states.
"They never faced such problems to the same degree."
Arab governments are now talking of the need for an "inclusive" model of economic growth that would create jobs and allow more people to share in prosperity.
This might include better education, greater state investment in transport and health care, and more progressive tax systems.
But Berglof believes that this would remain empty talk until political and economic stability returned."Governments are trying to plug all the holes and somehow to stop the bleeding. It's all about stabilization right now."
Reproduced with permission from OnIslam.net