Why is Morocco the outlier in Gallup’s poll? Morocco is more confident about its economic future than ANY other MENA neighbor! Gallup released a poll last week looking at economic confidence across the Middle East and North Africa in 2013 — what we nicknamed the pita-consuming region. Gallup results showed that MENA respondents showed declining economic confidence in the MENA region with a score of -33 points for 2013. MENA’s 2012 respondents scored -17 points in its economic confidence, thereby showing a decline of 16 points in Economic Confidence Index in the Middle East. (Algeria was not included in the sample–probably due to difficulty in gathering data given its government restrictions.) Lebanon showed the lowest level of economic confidence with a score of -71 points. In contrast, Morocco showed a score of 20 points. As all other MENA countries reflected ‘below zero’ economic confidence, Morocco remained steadfast in its economic outlook–for whatever reason.
Only EU Is Less Confident than MENA Region– Minus GCC Countries
After the European Union (-36 points), MENA (-33 points) showed the least amount of economic confidence. Gallup measures economic confidence as the following:
Gallup calculates the Economic Confidence Index by adding the percentage of people rating current economic conditions ([“excellent” + “good”] minus “poor”) to the percentage saying the economy is (“getting better” minus “getting worse”), and then dividing that sum by two. The Economic Confidence Index has a maximum value of +100 and a minimum value of -100. Values above zero indicate a more positive than negative view of the economy, values below zero indicate net-negative views, and zero indicates that positive and negative views are equal.
The greatest decline in economic confidence was in Egypt: scoring -70 points in 2013, a 40 point drop from -30 points in 2012. What explains the declining economic confidence? Security discomfort? Uncertainty about subsidy reform? Declining FDI, which results from disruptive policing efforts? Some factors affect certain countries more than others.
Economic Confidence Declined Because of Subsidy Reductions?
MENA is too diverse across its set countries to truly feel surprised about any type of general statement of confidence–especially if you argue that a single indicator of confidence cannot represent the non-homogenous MENA region because oil-producing countries skew the results of economic realities. It’s important to note: Gallup considered the impact of GCC member nation’s realities and did not include them in the economic confidence index for the region. Both middle-income (Tunisia, Jordan, Lebanon Libya and Egypt) and upper-income countries (Bahrain and Kuwait for example) experience different realities and may point to why they are less confident than last year. Specifically, middle-income countries, like Tunisia, have undertaken wide-scale subsidy reductions in contrast to wealthier countries’, which have the luxury of maintaining fuel and bread subsidies without implementing tax regimes.
Tunisia’s planned subsidy reforms and public spending cuts should help reduce the budget deficit by 1.5 billion dinars or $927 million in 2014. Tunisian Prime Minister Mehdi Jomaa
Subsidy culture aside, some feel like certain cultural experiences speak to certain countries and not others. Or even if you feel that certain countries belong to the region versus others, what does economic confidence really mean if each country is starting off from a richer endowment? Advanced, industrialized economies, like Israel, are included in the Gallup poll. But, Israel is the only MENA country that receives economic aid.
True, you could argue that the regional security situation negatively impacted over 6 MENA countries in 2013, which is why economic confidence declined across the board–expect in Morocco. Syria’s war produced huge spillover effects by producing over 1.5 million refugees for Turkey, Lebanon, Jordan, Egypt and Iraq. But not for Morocco. Geographically, Morocco is the furthest away from the Syrian conflict (and now the ISIS escalation in Iraq). So Morocco’s positive economic outlook is not tainted by either the Syrian spillover or the Gaza blockade.
More importantly, if you does want to focus on the overall “declining economic confidence in the Middle East” why the heck is Morocco the outlier in this MENA poll? Based on PITAPOLICY’s June visit to Morocco, certain positive developments may explain why Moroccans show more economic confidence:
1) Fully operational, newly constructed metro system operating in Rabat. More mobility, more access to economic outlets.
2) More publicity on King Mohammed IV’s increased support for economic and agricultural assistance to African countries. Can’t tell you how many times Qayyum turned on Moroccan news to see coverage on Morocco’s Africa’s assistance–counted two stories each night for a week.
3) Optimism that political trajectory of Morocco is more stable than neighboring revolutions in Tunisia, Libya Egypt, and Yemen.