Monetary Policy Since Arab Spring Revolutions: Whether it Achieved its Goals (Review and Analysis for Selected Countries)

By the end of 2010, political instability swept through some Arab countries, dubbed the Arab Spring Revolutions (ASRs). Those revolutions changed some countries’ internal political and economic systems, such as Tunisia in January 2011, Egypt in February 2011, Libya in October 2011, Yemen in December 2017, Algeria in March 2019, and Sudan in April 2019. ASRs called for improving the citizens’ standard of living by achieving the ultimate goals of monetary policies represented in reducing inflation, increasing real GDP growth, decreasing unemployment, minimizing government debt, sustaining the current account surplus, raising the levels of GDP per capita, and improving HDI. This paper reviews and analyzes the performance of monetary policy in those countries in 2010-2020 to see if their spring revolutions resulted in achieving their economic goals. The study concluded that the selected countries could not reach the ultimate goals of monetary policy, as the financial indicators achieved during the study period were below the target levels. The inflation rates fluctuated between 2.0% and 163%, the real GDP growth ranged between 66.7% and 124.7%, the unemployment rates reached approximately a double-digit range between 8.3% and 26.8%, the HDI ranged between 47% and 0.80, government debt to GDP ranged between 7.6% and 262.5%, the current account balance (except for Libya and Algeria) achieved a continuous deficit ranged between 0.5 billion USD and 19.8 billion USD, and maximum levels of GDP per capita achieved in 2020 were 3587 USD, 3323 USD, 3281 USD, 3263 USD, 775 USD, and 620 USD for Egypt, Tunisia, Libya, Algeria, Sudan, and Yemen respectively. The study recommends political decision-makers and policymakers in central banks pay more attention to achieving political stability, as it is a prerequisite for achieving economic stability. Moreover, it is difficult for monetary policy to achieve the ultimate goals that the ASRs called for in light of the ongoing internal instability.