Facing all the Challenges
Report: November 2022
As global inflation impacts the world economy, the Middle East is trying to face all the external pressures using new policy. Photo credit: Mena Fn.
With talking-heads hinting of a looming global recession in the next year, the Middle East is struggling to cope with the external changes. In addition to all the challenges that each of the countries has, they are being forced to come up with solutions that can guarantee a future. Faced with climate change, overpopulation, unemployment and other related hurdles, ME nations are being tested to their very limit.
1- The Socio-Economic Situation
Egypt
IMF believes Egypt’s economy is on the right track. Photo credit: Arab News.
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 515,431
Deaths: 24,798
As of 13 November 2022, a total of 100,554,948 vaccine doses have been administered.
IMF believes Egypt’s economy is on the right track. Photo credit: Arab News.
After granting a new loan to Egypt, the country can look forward to positive represcussions for its economy. The recently reached agreement which entitles Egypt to obtain a 3 billion USD loan will bundle up with other two packages to amount to a total of 9 billion USD. This financing program will require Egypt to adopt reforms to its financial sector. Egypt’s central bank claimed it is aiming to intensify economic reforms and to use an exchange rate determined by the supply and demand of the market. According to Fakhry El-Feky, head of the parliamentary committee for planning and budget, the agreement will not reduce people’s income but will lead to a reduction in the inflation rate, provided that a monetary policy is applied. Moreover, it will allow the economy to absorb the damage resulting from the Russian-Ukrainian war and the pandemic. If things go according to plan, Egypt’s economy will reap the rewards of the fund. After all, the IMF does not simply give money without the careful reviews and studies of the economy.
Despite the IMF’s confidence in the Egyptian economy, there are still crippeling woes impailing the country. The inflation rate conitnues to climb; in april 2022 it rose above 13% for the first time since 2019 and has been rising ever since. The latest study in September 2022 revealed inflation hit 15%. As for the country’s unemployment rate it increased by 7.4% during the third quarter of 2022, up from 7.2 per cent in the second quarter of the year. Moreover, the over-dependence on Egypt’s over-inflated yet cash-strapped military to run the economy poses its own problems. For instance, in 2016 Egypt asked for funds from the IMF. Instead of using the cash to finance the economy, it spent it on military and intelligence agencies. This sent millions of its citizens into an even deeper poverty. While this has been corrected in later negotations by placing strict IMF conditions, there tends to be a general skepticism on whether the funds will be spent in the right fashion.
Jordan
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 1,746,997
Deaths: 14,122
As of 20 August 2022, a total of 10,057,975 vaccine doses have been administered.
Jordan's Finance Minister Mohamad al Ississ meets with Ali Abbas, who headed an International Monetary Fund mission to Jordan, in Amman, Jordan
Despite global economic turbulence, Jordan succeeded in achieving growth. Driven by IMF-backed structural reforms, Jordan has cushioned the economy and strengthened macro-economic stability. According to Ali-Abbas, the head of the IMF mission to Jordan, a post-covid recovery is continuing to build momentum with expected 2022 growth revised upwards to 2.7 % from a previous forecast of 2.4 %. Due to strong inflows from the revival of tourism, and inbound investments from Gulf countries, Jordan has achieved better than expected results. It has met most of the fiscal and monetary targets set by the IMF in 2020 by closing tax loopholes and maintaining $16 billion of adequate foreign currency reserves. This prompted Moody’s to upgrade the kingdom’s rating from stable to positive, as IMF-backed fiscal reforms were "producing the best results". Now the kingdom can look forward to a bright year ahead, especially with the establishment of the largest investment fund. This fund will have a large capital of JD257 million and will pump funds into companies by 2023. Developing the fund demonstrates Jordanian banks’ commitment in supporting the local economy and furthering development. According to Chairman of the Jordan Capital and Investment Fund Management Company Hani Qadi, the fund will help serve as an enabler to the strategic objectives of the Economic Modernization Vision.
Iraq
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 2,462,272
Deaths: 25,361
As of 6 November 2022, a total of 19,444,970 vaccine doses have been administered.
Iraq has been battered by three years of drought, low rainfall and reduced water flows along its rivers. Photo credit: www.iraqinews.com
According to a recent World Bank report, Iraq’s economy is expected to rebound by 8.7%. This is due to high oil prices which have allowed the country to improve its fiscal balance into impressive surplusses. Additionaly, it is expected that the GDP will rise at a faster rate in the near future because of higher oil production and a rebound in domestic economic activity. However, over the long run growth is anticipated to slow down as oil output is determined by a decreasing global demand. Futhermore, insecurity, political unrest, and resurgent inflationary pressures are set to have a detrimental effect on the economy, despite high oil production. Moreover, growing food security threats and proliferating poverty are exacerbated by rising food costs. The drop in purchasing power due to inflation, and water and energy shortages, would further risk social instability. Iraq’s socio-economic vulnerabilities are further exacerbated by climate change and its effets on natural resources. The country’s over-reliance on oil makes it susceptible to new economic dangers as the world moves toward a decarbonized environment, which would eventually reduce oil’s significant contribution to Iraq. Luckily, Iraq got a new government, Prime Minister, and President giving the country a chance to adopt reforms and policies that would pave the way for more economic diversity.
Lebanon
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 1,220,211
Deaths: 10,731
As of 19 October 2022, a total of 5,797,147 vaccine doses have been administered.
Lebanese Finance Minister Youssef Khalil, photo credit: The National News
While Lebanon’s economy still falters, politicians in the parliament are still unable to elect a new President. The paralysis in the political sphere echoes the reality of the country which seems to be drifting into nowhere. The local currency has lost more than 90% of its value, fluctuating to around 40,000 LBP to the dollar. The electricity crisis still grips the country as street lights remain turned off. Similarly, Lebanon’s infrastructure related to its sewage disposale system is decaying with no solution in sight. As for Lebanon’s illegal boat migration, more and more people sink to the bottom of the sea while trying to escape the deplorable situation in the country. All of this is happening under the watchful eyes of the people controling the country. Judging by how things are being handled, it is as though no one is running Lebanon.
Nevertheless, some attempts to rectify the situation are underway. Authorities are aiming to fill state coffers by raising the exchange rate for taxes, fees and customs duties. This means that Lebanon will abandon the official rate of 1,507 pounds only to introduce a higher rate in accordance with the currency’s market value. According to Caretaker Finance Minister Youssef Khalil, “We do not have any other choice. The fiscal situation has become unsustainable.” As a result, taxes and fees will be set according to a rate adopted by Sayrafa, an official platform managed by the Central Bank. The platform is currently trading at 30,000. Mr.Khalil pointed out that this move was a crucial step towards the reforms asked by the IMF to unlock 3 billion USD to ease the country’s economic woes. Unifying Lebanon’s multiple exchange rates is another step. However, some experts say that the authorities are simply adding a new exchange rate rather than unifying them. With the absence of any comprehensive reform agenda, the increase in customs duties was only going to increase prices as most of the Lebanese people depend on imports for their daily consumption.
Palestine
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 703,036
Deaths: 5,708
As of 17 October 2022, a total of 3,748,571 vaccine doses have been administered
Activists wave a Palestinian flag outside the White House, photo credit: Aawsat.
Throughout this month, Palestine has succeeded in cementing ties with its foreign partners in an attempt to bolster its own economy. From one end, its Minister of Trade and Export Khaled Osaili convened with his Algerian counterpart Kamel Rizek in hopes to improve economic relations between the two countries. During the meeting, the Algerian Minister claimed that his country is willing to grant the State of Palestine preferential treatment in trade. The two also talked about means of joint cooperation and mechanisms to raise the volume of trade between their two countries and to establish investment partnerships that would benefit their economies.
Similarly, Palestinian Minister of National Economy Khaled Essaili met with the Egyptian Ambassador to Palestine Ihab Suliman, to discuss mechanisms for strengthening economic and trade relations between the two countries. Both sides stressed on the importance of removing all obstacles in front of the private sector. Meanwhile, the Palestinian Minister unveiled Palestine’s new electronic measures that would attract foreign companies to invest in Palestine.
Lastly, Ramallah hosted the US-Palestinian Economic Dialogue (USPED) to discuss current and future areas of economic cooperation. Dialogue was launched in light of President Biden’s view of a Two-state solution and the importance of setting up an independent, sovereign, and geographically connected state of Palestine, with freedom, security and prosperity for all. Participants discussed several crucial issues regarding the advancing of economic prosperity of the Palestinian people and increasing the dynamism of the productive sectors, especially trade, industry, and renewable energy.
Syria
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 57,391
Deaths: 3,163
As of 15 October 2022, a total of 4,777,586 vaccine doses have been administered
A general view of Damascus, photo credit: Reuters.
The Syrian government passed a preliminary budget for 2023, which includes an increase in spending by 24%. Although more money will be spent in preparation for a long winter and an uncertain future, the budget includes a reduction in allocations for flour and wheat subsidies. This will severely impact citizens who are barely getting by. According to Prime Minister Hussein Arnous, the sole purpose of this budget is to implement economically feasible projects for the enhancement of production, improvement of services, and the development of the economy. Despite the increase in budget, there appears to be no rise in salaries for government employees. Therefore, most employees will retain a salary of 100,000 Syrian Pounds per month which is equivalent to 20 USD. To make matters worse, the inflation rate is at 55% as commodity prices continue to rise. Normally, any government would attempt to attract investments using a variety of ways to boost its economy and ease socioeconomic difficulties. However, the Syrian government took a decision to increase capital requirements for companies by 900%. This meant that new businesses will now have to be 9 times larger to receive a permit, thus impacting the Small- to Medium size sector (SME).
Although the situation is bleak, some positive developments did occur during this month. From one end, the government did amend its electricity law to encourage private investment by introducing more flexibility in the contracting process and granting provincial authorities more powers. This should allow more competition in the private sector thus paving the way for better consumer prices. As for Syria’s North, several microfinance institutions and lenders continue to issue new projects and programs to reduce the local population’s dependency on humanitarian aid. This should allow Syria to address the growing donor fatigue impacting the country. On a similar note, it is being reported that the number of early recovery projects being implemented inside opposition areas has increased by nine percent during the first six months of the year when compared to last year. Meanwhile, hundreds of early recovery projects have been implemented in areas controlled by the Autonomous Administration of North and East Syria.
Cyprus
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 610,023
Deaths: 1,218
As of 12 November 2022, a total of 1,831,893 vaccine doses have been administered.
Despite the economy seems to be heading towards a regression, Cyprus is still doing better than its European counterparts. Photo credit: https://www.ekathimerini.com/
The Cypriot economy, although it is doing well in comparison on European economies, is expected to slow down towards the end of the year. According to the European Commission’s Fall 2022 Economic Forecast, this is due to the continuing effects of the Russian invasion of Ukraine and the increase in energy prices. As for its public finances they will remain sound. Concerning unemployment, it is expected to decrease to 7.2% in 2022 and to remain steady in 2023 up until 2024 where it will decrease to 6.9%. As for inflation, it is projected to increase from 2.3% in 2021 to 8% in 2022, and ease to 4.2% in 2023 and 2.5% in 2024. The Finance Minister claimed that a development plan is on track and is set to continue with the 2023 budget, explaining that fiscal policies have helped the country outperform European peers. According to CyStat, GDP growth is mainly due to: Hotels and Restaurants, Transportation, Information and Communications, Trade and Arts and Entertainment. In tandem with Cyprus’s drive to attract more investments, The International Investment Funds Association declared that it will host its 36th annual conference in Cyprus next year. Its members’ assets under management exceeded $71 trillion and will be of great importance for the growth of Cyprus. The selection of the tiny Island to host the conference came after a vote of confidence in the Cypriot ecosystem of Investments which is receiving international recognition.
2- The Refugee Situation
Egypt
At the COP27 climate summit held in Sharm El Sheikh, Egypt, displaced people warned that their attempts to adapt to the changing climate are being overwhelmed by repeated extreme weather events.[1]
Jordan
The UNHCR states that there are currently 676,621 registered refugees in Jordan up until the beginning of November.
The proportion of Syrian displaced people registered within the UNHCR for November, are distributed as follows:
-201,567 in Amman Governorate (29.8 %)
-170,405 in Mafraq Governorate (25.2%)
-136,078 in Irbid Governorate (20.1%)
-99,069 in Zarqa Governorate (14.7%)
-17,841 in Balqa Governorate (2.6%)
-13,230 in Madaba Governorate (2%)
-9,094 in Jarash Governorate (1.3%)
-8,493 in Karak Governorate (1.3%)
-8,432 in Maan Governorate (1.2%)
-6,354 in Ajlun Governorate (0.9%)
-3,867 in Aqaba Governorate (0.6%)
-1,625 in Tafilah Governorate (0.2%)
A Saudi Development Fund-financed health center, operated by the United Nations Relief and Works Agency for Palestinian Refugees in the Near East (UNRWA), was inaugurated in Jordan to serve around 300,000 refugees in the Zarqa camp.[2]
To help maintain life-saving cash assistance for refugees in Jordan, the German Federal Foreign Office has committed an additional 10 million euros to the World Food Programme (WFP) in 2022, and announced 10 million euros for 2023. [3]
Iraq
The UNHCR states that there are currently 261,046 registered Syrian refugees in Iraq.
The proportion of displaced Syrian people registered within the UNHCR up until the beginning of November, are distributed as follows:
-129,417 in Erbil (49.6%)
-83,060 in Dahuk (31.8%)
-33,838 in Sulaymaniyah (13.0%)
-2,311 in Anbar (0.9%)
-12,420 in other areas (4.7%)[4]
New data shows majority of children surveyed in East Mosul are working in unsafe conditions, 95% of children missing key identification documents, and more than half of households surveyed having one or more children engaged in labor.[5]
The Government of Belgium has contributed an additional EUR 1.5 million (approximately US$ 1.49 million) to the Funding Facility for Stabilization. The critical funding will support stabilization efforts implemented by the United Nations Development Programme (UNDP) across Iraq’s five governorates: Anbar, Diyala, Kirkuk, Ninewa and Salah al-Din.[6]
Lebanon
[For the month of November, figures were not updated by the UNHCR]
Since October, the number of registered Syrian refugees in Lebanon is 825,081.
Refugees in Lebanon are distributed as follows:
-324,141 in Bekaa (39.3%)
-227,875 in North Lebanon (27.6%)
-182,979 in Beirut (22.2%)
-90,086 in South Lebanon (10.9%)[7]
According to Deputy Commissioner-General of the UN Agency for Palestine Refugees, Leni Stenseth, poverty levels among Palestine refugees in Lebanon have jumped from 70 per cent at the start of 2022 to 93 per cent now.[8]
Two Syrian children, aged four and six, were burned to death in a fire at a refugee camp in southern Lebanon, Lebanese State-run news agency NNA reports.[9]
Lebanon’s state-run National News Agency said a “voluntary return” on the Nov.5 included 330 Syrians who left from the eastern Bekaa Valley to Syria’s western Qalamoun region.[10]
Syria
The SRTF announced that under its Agriculture project, “Support Farmers for the Production of Wheat and Vegetable Crops in Northern Aleppo”, 100 MT of wheat seeds were received and have started being distributed to farmers.[11]
The Norwegian Government provided an additional NOK 51 million to support humanitarian efforts to help the Syrian population, which is in dire need of assistance.[12]
For the fourth consecutive year, Belgium is providing 2 million euros to the United Nations Mine Action Service (UNMAS) for its activities in Iraq and Syria. With this support, we offer the vulnerable among the population the opportunity to return to an active life.[13]
The number of malnourished children in North East Syria has surged by over 150% in the past six months with at least 10,000 more children now facing malnutrition than in the previous six months.[14]
The Kafar Jalis Displacement Camp in northwest Syria was attacked by cluster bombs killing nine civilians, including three children and one woman, according to the Syrian Civil Defense.[15]
Cyprus
Clashes broke out between migrants at the overcrowded Pournaras reception facility in Cyprus. According to Al Jazeera, refugees from Nigeria and from the Democratic Republic of the Congo – two of the major migrant groups on the island – threw rocks and other objects at each other, and police reported that fires started at the reception centre.[16]
Interior Minister Nicos Nouris and Bangladeshi counterpart Asaduzzaman Khan have secured an agreement on migrant returns. They agreed to speed up the return of Bangladeshi refugees and eradicate any bureaucratic procedures and difficulties.[17]
Communication and Public Relations Department
[1] UNHCR, November 18, 2022, https://www.unhcr.org/news/stories/2022/11/6377989a4/displaced-people-climate-frontlines-raise-voices-cop27.html
[2] Alarabiya, November 21, 2022, https://english.alarabiya.net/News/middle-east/2022/11/21/Saudi-financed-UNRWA-health-center-opens-in-Jordan-based-Palestinian-refugee-camp
[3] Jordan Times, Nov. 21, 2022, https://jordantimes.com/news/local/germany-commits-additional-10m-euros-wfp-2022
[4] https://data2.unhcr.org/en/situations/syria/location/5
[5] OCHA, Nov. 20, 2022, https://reliefweb.int/report/iraq/high-child-labor-rates-iraq-continue-disrupt-childrens-education-childhood-and-basic-rights-irc-warns
[6] OCHA, Nov. 16, 2022, https://reliefweb.int/report/iraq/belgium-increases-its-support-stabilization-iraq-new-eur-15-million-contribution-enar
[7] https://data2.unhcr.org/en/situations/syria/location/71
[8] Middle East Monitor, October 27, 2022, https://www.middleeastmonitor.com/20221027-un-poverty-among-palestine-refugees-in-lebanon-jumps-to-93/
[9] Ansamed, Nov 21, 2022, https://www.ansamed.info/ansamed/en/news/sections/generalnews/2022/11/21/lebanon-fire-at-syrian-refugee-camp-two-children-killed_4f1da44a-91bf-4c8a-86cb-b3f4ea9df21d.html
[10] Aawsat, Nov. 5, 2022, https://english.aawsat.com/home/article/3971016/scores-syrian-refugees-head-home-lebanon
[11] OCHA, Nov. 20, 2022, https://reliefweb.int/report/syrian-arab-republic/srtf-agriculture-project-started-distribution-100-mt-wheat-seeds-it-received-northern-aleppo-today
[12] OCHA, Nov. 19, 2022, https://reliefweb.int/report/syrian-arab-republic/norway-increases-humanitarian-support-syria-0
[13] OCHA, Nov. 19, 2022, https://reliefweb.int/report/syrian-arab-republic/belgium-supports-humanitarian-demining-iraq-and-syria-eur-2-million
[14] OCHA, Nov. 10, 2022, https://reliefweb.int/report/syrian-arab-republic/north-east-syria-child-malnutrition-increases-over-150-amid-worsening-hunger-crisis
[15] OCHA, Nov. 9, 2022, https://reliefweb.int/report/syrian-arab-republic/displacement-camp-attacked-cluster-bombs-northwest-syria-9-killed-including-3-children
[16]The Organization For World Peace, October 30, 2022, https://theowp.org/overcrowding-results-in-refugee-clashes-fires-in-cyprus/
[17] Financial Mirror, Nov. 21, 2022, https://www.financialmirror.com/2022/11/21/cyprus-bangladesh-deal-on-migrant-returns/