Economic recovery in the Arab countries will be difficult to achieve amid the raging wars and conflicts in some states, Joseph Torbey, the president of the World Union of Arab Bankers, told participants at a conference in Amman.
“The economic cost from wars and fighting is very big and this puts us in front of challenges and should prompt us to apply pressure to end the existing conflicts and rebuild political, economic and social institutions,” Torbey said in his speech in the Arab Economic Forum, which was held in the Jordanian capital.
The event was organized by the Union of Arab Banks.
Citing some figures released by the World Bank, Torbey said that the cost of the “so-called Arab Spring” has exceeded $834 billion over the past six years. He added that among the countries that were affected by the Arab Spring were Egypt, Syria, Tunisia, Libya, Bahrain, Jordan, Yemen and Lebanon.
Torbey said these conflicts had caused the displacement of more than 14 million people.
“In Syria, the cost of conflict is around $700 billion up to 2016. This war has left quarter of a million dead and 5 million refugees who are living outside Syria,” he added.
He stressed that Lebanon and Jordan are most affected by the size of the Syrian refugee influx.
“Against this backdrop and in the face of these challenges, we must redraw the course of Arab development. This should be done through the improvement of the investment climate, buttressing economic freedom and upholding the rule of the law. Of course this also requires stable political environment that protects society and preserves civil liberties,” Torbey said.
He also touched on the role of Arab banks in shaping the economies of the region.
“The Arab banking sector represents the springboard of the economy and plays a leading role in stimulating various economic sectors through perpetual financing,” Torbey said.
He added that the combined assets of all Arab banks in 2016 reached $3.4 trillion, representing 140 percent of the GDP of the Arab states.
“This shows the great contributions the Arab banks are making in financing the Arab economies despite the drop in the price of oil as well as the security, economic and social turmoil in a number of Arab states that were fragmented by the wars,” Torbey said.
However, Torbey said liquidity in Arab banks could diminish in light of expected slow growth in deposits and fall in asset quality. He added that the drop in the surpluses of Arab governments was among the reasons that have affected liquidity in the markets.
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