The New Levant

Report: 1 to 11 July 2021

This report is also available in Arabic.

Iraq, Jordan, and Egypt announce the formation a new initiative called the “New Levant”, signaling deeper economic and military ties among the three members. Source: Arab News.

Throughout the past decades, Middle Eastern nations had attempted to form alliances that would guarantee economic cooperation and security. However, foreign intervention has paralyzed any attempt to form a unified alliance. For these powers, it is better to have a fractured Middle East rather than a unified one- a divided region is easier to handle. Very recently however, Jordan, Egypt and Iraq came together to bolster ties and build a common regional vision amid changing geopolitical realities. The initiative dubbed as “The New Levant” is a promising idea that can add a degree of stability in a turbulent area.

The socio-economic situation

Egypt

Corona cases, deaths and recovered are distributed as follows:

-283,102 corona confirmed cases

-218,412 recovered

-16,396 deaths

The “New Levant” alliance, based primarily on the economic and investment dimensions, and political and security aspects.

Egypt, throughout the past years, has been cultivating its bilateral ties with several countries, and has therefore succeeded in attracting billions of dollars in terms of investment. On the regional front, Egypt is aiming to develop its economic relationships with Jordan and Iraq; especially with the latter which represents a market with so much potential. Likewise, Iraq has about $490 million invested in Egypt. As such, the three opened a “New Levant” alliance, based primarily on the economic and investment dimensions. Energy and electrical interconnection projects top the list of economic interests between the three countries, while Baghdad and Cairo support the Jordanian role in the region to fight terrorism. Internationally speaking, Poland and Russia seem intent on expanding their footprints in Egypt; Egypt’s Suez Canal Economic Zone (SCZone) and its Polish counterpart have signed an agreement for the creation of a Polish industrial zone in Egyptian town Ain Sokhana, while Russia’s industrial zone in Egypt proceeds. The Polish economic zone in Egypt will leverage a space ranging between 400,000 and 1,000,000 square meters while Russia has approximately 1,000,000 of a total 5,250,000 square meters.

As a result, Egypt’s economy will continue to grow in the short and long term, as investments continue to pour in.  As such, the European Bank for Reconstruction and Development (EBRD) expects the Egyptian economy to grow by 4.2 percent in 2021, and 5.2 percent in 2022. It is important to note that Egypt’s economy was one of the best performing economies worldwide during the pandemic. That’s why it was able to transition to the recovery phase comparatively, with greater ease. 

Jordan

Corona cases, deaths and recovered are distributed as follows:

-756,923 corona confirmed cases

-739,948 recovered

-9,836 deaths

The Capital of Jordan, Amman. Photo credit World Bank Group.

Apart from the new tripartite deal with Iraq and Egypt, the European Bank for Reconstruction and Development forecasted growth by 1.5% for 2021. This is positive news for a nation that had been facing economic contraction during and before the pandemic. As for 2022, growth is also expected to increase to 2.2 per cent, as the Kingdom advances reforms and global tourism resumes. However, Jordan’s hopes seem to rest on its tourism industry during a time the corona pandemic is not over and a new deadlier strain is spreading. As such, Jordan is going to need its reform enacted and implemented, to adapt to any looming threat.  Luckily, there are plans underway for green and digital transitions that would make the use of resources more efficient.

Iraq

Corona cases, deaths and recovered are distributed as follows:

-1,438,511 corona confirmed cases

-1,313,552 recovered

-17,592 deaths

Officials sign the agreement on solar energy production on June 24, 2021. Photo: Ministry of Oil.

To tackle Iraq’s overreliance on fossil fuels, the Iraqi Ministry of Electricity signed a contract with the UAE to produce solar energy. Such a deal, made with the UAE-based Masdar company, will allow the generation of 2000 megawatts of electricity through solar energy projects in central and southern Iraq. Suha Al-Najjar, the head of the National Investment Authority, revealed Iraq’s plans to sign more contracts of a similar nature. According to her, the government’s main intention is to replace 20-25 percent of energy produced by fossil fuels, or 10 to 12 kilowatts, with clean energy in the long run. Already, the government had allocated certain designated areas to be used as such. Now, investments in renewable energy have started to pour in. Unfortunately, Iraq’s electricity needs have been growing by the year at a pace that such projects, for the time being, cannot produce enough energy for the growing population. As such, it is planning to build a number of power plants that run on gas and oil, in the coming years. Also in motion, are plans for the construction of 8 Nuclear power plants by 2030.

Lebanon

Corona cases, deaths and recovered are distributed as follows:

-547,811 corona confirmed cases

-534,296 recovered

-7,875 deaths

Soldiers stand guard in the southern Lebanese town of Qlaile on 14 May 2021 (AFP).

Sinking deeper into the abys, there seems to be no way out for this small contested country. Still there is no government in place and signs of mutany, orchastrated by public employees, started to appear. Fuel shortage is getting worse prompting long lines of cars to wait at fuel stations. This resulted in social tensions and clashes between citizens just for a few drops of oil to keep their motors running. Even members of different government security agencies started shooting at one another after a fist brawl took place. The country is indeed falling apart as the laws of jungle and Darwin’s survival of the fittest are what’s governing.

Caretaker Prime Minister Hassan Diab, via a televised address with foreign embassadors and expats, warned of a ‘social explosion’ of some type, within days. Whether or not the PM is being melodramatic or not, his words are mere reverberations of what’s being said all over the country.   

Luckily, Lebanon has still some partners that would arrive to its aid. For instance, Qatar recently declared that it will be providing food aid for the Lebanese Army. As good as this may sound and as much gracious and generous Qatar can be, this demonstrates how dire the situation is and how crippled the country is: it cannot even feed its own army.

Palestine

Corona cases, deaths and recovered are distributed as follows:

-315,160 corona confirmed cases

-309,910 recovered

-3,582 deaths

A Palestinian boy waves the Qatari and Palestinian flags on February 8, 2021 [SAID KHATIB/AFP via Getty Images].

Due to the pandemic that had crippled the country and the armed escalation between Israel and Palestinian militants, unemployment rose to grave heights. Earlier this year, the World Bank confirmed more than 66,000 Palestinian employees lost their jobs last year amid the coronavirus pandemic, leading to an increase in the unemployment rate which reached 27.8 per cent. Moreover, the Israeli onslaught on Gaza destroyed much of the enclave's infrastructure including health and educational facilities, roads, residential buildings, as well as power generation and water supplies, thus forcing many businesses to shut down. As a result, poverty, hunger, and homelessness proliferated across Gaza, prompting humanitarian agencies and partner countries to intervene. Qatar Charity was one of those which decided to help. It hired more than 50,000 Palestinian graduates and creatives remote jobs through its 'Taqat' initiative. The aim is to employ the largest number of Palestinians improve the economic situation of Palestinian families and strengthen the role of creative youth in need of work.

Syria

Corona cases, deaths and recovered are distributed as follows:

-25,785 corona confirmed cases

-21,884 recovered

-1,898 deaths

Syrians stand in a queue to buy bread in the town of Binnish in Syria’s northwestern province of Idlib on 11 January 2020 (AFP/File photo).

As Lebanon nose-dives straight into the Abys, Syria’s fate is still unknown. What is certain however, a looming humanitarian catastrophe is coming. After ten years of conflict, the number of people in need across Syria are at their highest ever levels, growing 20% in the last year alone. Damascus is still considered the most unlivable city in the world in an index compiled by the Economist Intelligence Unit. In the North West, there are 2.8 million people (81%) in need of humanitarian assistance that can only be reached through cross-border activities. In the North East, the figure stands at 61% and child malnutrition is rising.

At the government level, Syria is still unable to reinvent the economy after it had lost about 226 billion US dollars (USD) between 2011 and 2016- twice the country’s total gross domestic product (GDP). Russia and Iran have been assisting Syria with 7 billion and 23 billion USD respectively, however, it would take a lot more than that to put things back together. Currently, China is planning on increasing its influence in Syria through investment. Yet, the war is still not over and the volatility of the situation, may cause Chinese investors to proceed slowly and cautiously. Nevertheless, the whole news can indeed grease up the cogs of the Syrian economy to start working again, and give Syria access to highly needed foreign currency which it can use for reconstruction.

Cyprus

Corona cases, deaths and recovered are distributed as follows:

-84,272 corona confirmed cases

-73,263 recovered

-380 deaths

People enjoy the sea and the beach in the southeast resort of Ayia Napa in the east Mediterranean island of Cyprus, Sunday, May 16, 2021. (AP Photo/Petros Karadjias).

The European Centre of Disease Control (ECDC) recently placed Cyprus in the red category, one step short of the deep red category which is deemed dangerous. As such, the ECDC’s move crushed all Cypriot’s hopes of a prosperous summer full with incoming cash-laden foreigners. Industry leaders such as hotel owners were very upset by the declaration. They blamed what is happening on the unwillingness of some citizens to take the vaccine and the unforgivable act of contracting the virus and not reporting so.

Despite the ECDC’s declaration, the EU Commission claimed that the Cypriot GDP is estimated to grow by 4.3% in 2021 upgrading its previous projection over a 3.1% growth rate due to the better-than-expected performance in the third quarter of the year. Nevertheless, Cyprus must be cautious of the incoming ‘Delta’ variant of Covid-19 which is spreading faster than any strain.

Communication and Public Relations Department