Middle East Socioeconomic Overview

Report: October 2023

A Palestinian boy sitting where his house used to be. Photo credit: World Food Program

1. Table of Acronyms

2. Introduction

Undeniably, the Middle East region entered a new phase due to the violent events occurring across occupied Palestine. Atrocities are threatening to expand to an unprecedented scale. Despite the calls for restraint by various international and regional actors, blood is being grotesquely spilt like never before and the intensity of the violence might exacerbate more violence in the rest of the Middle East. It is a pity how the Holy Land, where Jesus Christ was incarnated and lived, is being used to spread evil and a lust for violence. Hopefully in the coming months a ceasefire will be declared to ease the human suffering. However, knowing the key players involved in this violence, war will drag on for quite a while.

3. The Socio-Economic Situation

Egypt

The Egyptian economy took a hit during this month as the bond credit rating agency Moody’s downgraded the country’s score. This alone created a negative reaction in the Egyptian stock market. Moody’s indicated that it gave a lower score of Caa1 due to the country’s accumulating debt obligations that ateof poor standing that are subject to “very high credit risk,” per the firm’s report. Moody’s also mentioned Egypt’s persistent foreign currency shortages as well as the government’s increasingly limited policy options to rebalance the economy without exacerbating social risk. The country’s highly entrenched military establishment is weighing down on the public and private sectors in Egypt, thus impacting the countriess ability to develop the economy and enact reforms. To make matters worse, IMF Managing Director Kristalina Georgieva told Bloomberg that Egypt will “bleed” its foreign reserves if it does not devalue the pound further. Unfortunately, devaluation will eventually lead to the raising of inflation, and Egypt is already suffering from significant pressure in this regard. Already, Egypt’s annual inflation hit a record high of 39.7% in August and experts are warning that it might increase. As for the currency crisis, Egyptian banks suspended the use of Egyptian pound debit cards outside of the country in response to the foreign currency shortage. This act is similar to when Egyptian banks restricted foreign currency withdrawals in October of last year in response to the liquidity crunch.

Despite the gloomy news by the international agencies and organizations, Egypt continues to attract foreign investments at an impressive rate. What verifies such a claim is the report released by The Egyptian Financial Regulatory Authority which claimed that there was a substancial increase in the number of approvals for share issuances for new companies, a capital increase for existing companies, and amendments to nominal values. The provided data released in October was up until July 2023, revealing 1,656 approvals for share issuances, capital increases, and amendments to nominal values with a total export value of LE 207.3 billion. To keep up the pace of inbound investment Egypt is also continuing to enhance ties with other countries who are interested in implementing development projects. An example of such an endevor is the recent meeting between Mohamed Maait, the Egyptian Minister of Finance, and his German counterpart, Christian Lindner, to discuss how to enhance bilateral relations in various fields, such as economic and investment activities, financial and social policies, and development cooperation. From its end, Egypt streed the idea of strengthening cooperation in the field of green hydrogen and liquefied gas production, which would benefit both sides and support sustainable development efforts and environmentally friendly investments.

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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:

-Confirmed cases: 516,023

-Deaths: 24,830

-As of 20 May 2023, a total of 112,673,535 vaccine doses have been administered.

Jordan

According to the Coface group, a world's leading credit insurer, performance indicators of the Jordanian economy during the coming year will achieve moderate growth, as domestic growth is expected to reach 2.7% during the year 2024, in contrast to previous expectations of 2.6%. In the October 2023 report on Jordan, the group expected that tourism revenues during the coming year would rise to 30% of the gross domestic product and reach about 16 billion dollars which is a 20% increase. The expected additional increase in tourism revenues would keep the services account in surplus at about 5% of GDP. However, such figures can radically change depending on the evolving situation in neighboring Palestine. Economists said in exclusive interviews with Al-Araby Al-Jadeed that Jordan will be one of the countries most affected by the [Israeli] war on Gaza, and its repercussions will increase the longer it lasts, due to the decline in tourism demand, trade and investment. Moreover, the degree of risks for investors and businessmen increases when considering the establishment of their projects in the region. As such inbound investments are expected to decrease as the conflict continues to unfold. In the medium term, the war is expected to have negative repercussions on the prices of crude oil, gas, and shipping costs, which will raise the costs of import and export, increase the prices of fuel and food, and potentially disrupt supply chains and Jordan’s economy. According to the head of the Economy and Investment Committee in the Jordanian House of Representatives, Omar Naber, many tourist groups canceled their trips that were scheduled to Jordan and the countries of the region, due to the escalation in Gaza.

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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.

Iraq

The Central Bank of Iraq issued a memo officially ban cash withdrawals and transactions in US dollars from January 1, 2024, as it strives to limit the misuse of the country’s hard currency reserves for financial crimes and evade US sanctions on Iran. The Director General of the Investment and Transfer Department at the Central Bank of Iraq, Mazen Ahmed, said that the aim of the step is to stop the illegal use of about 50% of the amount of cash amounting to 10 billion dollars that Iraq imports annually from the Federal Reserve Board (the US central bank) in New York. This step comes as part of a broader campaign to stop the economy's dependence on the dollar, after citizens began to prefer the US currency over the dinar. Such a bold decision is in tandem with the Iraqi’s government to strenghten the trade sector by increasing the volume of trade exchange with other arab countries. As such, this ought to boost the value of the local currency especially when trade is enhanced with countries such as Saudi Arabia who heavily relies on imports from other countries. According to The Iraqi Trade Minister Atheer Al-Ghurairi, the Iraqi government will aslso support the private sector thus enabeling it to play a bigger role in economic development. This will also create the appropriate work environment and job opportunities. He also mentioned the Saudi exhibition held at the Riyadh International Convention and Exhibition Center where 24 major companies participated. The event allowed Iraq to form new partnerships with companies which it deems useful for the prosperity of the economy. Hopefully, these set of moves can allow Iraq to decrease its dependense on foreign currency.

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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:

-Confirmed cases: 2,465,545

-Deaths: 25,375

-As of 1 January 2023, a total of 19,557,364 vaccine doses have been administered.

Lebanon

An [Israeli] attack on one of the villages at the Lebanese border. Photo credit: Naharnet

As Lebanon teeters on the edge of economic collapse, military confrontations have been registered in Lebanon. As a result, panic and paranoia is spreading within Lebanese society as people rush to pharmacies for medical supplies and stores for food and necessary items. Many are fleeing the country and flights have been reduced to the country and the MEA airlines, which is Lebanon’s main airline, is relocating its planes to other countries. When it comes to the South of the country, more than 23000 people, have been displaced to safer locations in the country. However, it is in the back of every Lebanese citizen’s mind, no place is safe if an all-out conflict breaks out. Afterall, the occupation’s politicians and military leaders have repeatedly warned time and time again of ‘bombing Lebanon back to the stone age’. Rhetoric such as this is now seemingly worrying every individual residing in the country, especially when images of the barbarity and genocides are surfacing on social media. According to Nasser Saidi, a former economy minister and vice-governor of Lebanon's central bank, all indicators point that the economic situation will rapidly deteriorate as a result of the security crisis and the Gaza war. Also, he insisted that the potential destruction of its remaining infrastructure, including ports and the airport which are the economic lifeline of the country will certainly diminish the Lebanese diaspora’s ability to send funds back to their familes and deny citizens residing in the country to import products. Being a country that has a diminshed industrial capability, Lebanon relies on a variety of products from abroad to satisfy its basic needs. In other words, this spells a catasrophic situation in the event Lebanon is attacked, especially when European countries have labeled Lebanon as ‘the last destination for refugees before going to Europe’. As such, war can only lead to a larger refugee crisis.

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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:

-Confirmed cases: 1,239,904

-Deaths: 10,947

-As of 21 December 2022, a total of 5,814,699 vaccine doses have been administered.

Palestine

A picture of Gaza being incessantly bombed by IDF forces. Photo credit: cepa.org

At this point in time, attempting to discuss Palestine’s economy is useless as military operations have bottled economic activity in both Gaza and the West Bank. Military activities, for the time being are concentrated in Gaza with a risk of spillover to the West Bank is growing. As time passes by more and more of Palestine’s already-decaying infrastructure is being pounded to smithereens. To make matters worse, occupation authorities have tightened the siege around Gaza thus blocking fuel for electricity, medical supplies, food and what not. Gaza even found itself in a desperate need for coffins as the death toll had increased significantly within just a few days. The level of destruction taking place within Gaza is unprecedented and forced the IMF, who had already forecasted GDP projection of 2.2 per cent in 2024 and 1.9 per cent in 2025, to rethink its initial findings. With waning donor support, the capacity of the Palestinian economy to bounce back from shocks has also suffered. Currently, Palestinian GDP losses are estimated to exceed $500 million, or 3 per cent of the 2022 GDP. Daily loss of production in Gaza is estimated at $16 million and Gaza’s level of trade will plummet below the 12 per cent of the total Palestinian trade size in 2023. Even remittance from Palestinians who work outside their areas and which make 35% of PA’s GDP will no longer be available as occupation authorities have suspended work permits for more than 140,000 Palestinians. If prolonged, the closure may result in losses in huge amounts and spell disaster for an already ailing economy. To paint a clearer picture, workers outside their areas inject about $5.5 billion into the PA economy annually, as announced by the Palestinian Authority. As such, the level of despair in Palestinian territories will only continue to grow as the world watches.

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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:

-Confirmed cases: 703,228

-Deaths: 5,708

-As of 17 October 2022, a total of 3,748,571 vaccine doses have been administered

Syria

Even though it has been five months after the normalization with Gulf states, Syria is still in a difficult economic situation that is only getting worse. Also, there is no sign of steps towards stabilization, political reforms, or refugee return. Moreover, the economy remains undiversified and dependent on the export of oil in some areas and the production of a few scarce resources. Due to the deplorable conditions of the economy, the humanitarian situation remains to be alarming. According to the United Nations, there are 15.3 million people in urgent need of humanitarian assistance in Syria, representing 70% of the people inside the country, and 90% of Syrians are below the poverty line. Such a grim reality is driving human capital from the country as Syrians are continuously trying to migrate to European countries, even if it means at the cost of their lives. According to Economist Dr. Firas Shaabo, all sectors of the Syrian economy are witnessing the migration of their workers which is leaving a massive shortage in skilled workers. This is reflected in the quality of production which is continuously dropping and by the provision of weak services. As such, when an economy is seemingly becoming unproductive, the only hope Syrians have is humanitarian aid and remittance from Syrians living abroad. Such a fact places the country in a dangerous situation when such two contributing factors are what holding the country together. External ramifications and changes in the evolving situation in Palestine and the region, might mean utter doom for Syria.

Although the situation is not that comforting, there are rather some subtle positive developments that might work in Syria’s favor. For instance, a Syrian business delegation visited Greece and signed an agreement with the Piraeus Chamber of Commerce, one of the first such agreements at this level after more than a decade. While the details of these agreements is yet to be released, both sides view it as a positive step in reintegrating Syria in the global economy. Locally, the Syrian government inaugurated several projects in Aleppo in the electricity, housing, tourism, and grains sectors hoping to meet domestic needs. As such, this can provide additional jobs to Syrians while improving domestic production of products and services. In the Northwest part of the country, it was declared that a first ever investment conference will be held in December to attract investments to the region. Although the area is operating outside the authority of the government in Damascus, the development of the region can prove important for Syrians who do not want to immigrate to places outside Syria.

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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:

-Confirmed cases: 57,423

-Deaths: 3,163

-As of 15 January 2023, a total of 5,090,630 vaccine doses have been administered

Cyprus

In contrast to Egypt, Moody’s gave Cyprus an ‘investment-grade territory’ score allowing the island to distinguish itself from other countries in the Mediterranean. President Nikos Christodoulides lauded Moody’s score and considered this as a massive victory for the government which has been trying over the past years to create a stable fiscal system. According to him, this will translate into great opportunities for the economy as it will attract more investments and create more jobs. Sustained structural improvements in the labor market were also cited by the agency, along with a rebound in public and private investments, a continuing drop in public debt and a jump in productivity that resulted in economic growth by more than 4% between 2014-2023. What made the agency consider the island as a remarkable destination for future investments is its ability to withstand external shocks in the world. What proved this fact is Cyprus’s resilience to the effects of the COVID-19 pandemic and the Ukrainian-Russian war. Due to such a reality, total assets invested in Cyprus have surged to a record-breaking €2.9 billion, marking a significant milestone in fortifying the country’s economic expansion and diversification. On the same note, The Cyprus Investment Funds Association acknowledged the investments pouring into the country for development projects have made a substantial contribution to the economic developments. For this reason, 254 companies as reported by the Securities and Exchange Commission, demonstrated a remarkable growth of approximately 7.2% within a year. The only thing that is threatening the nation’s economy is the escalation in the region which harm its tourism sector and the pause of investments.

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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:

-Confirmed cases: 660,854

-Deaths: 1,364

-As of 10 June 2023, a total of 1,858,908 vaccine doses have been administered

4. The Humanitarian Situation

Egypt

Egypt criticized suggestion to resettle refugees from Gaza on its territory claiming that it is a breach of its sovereignty and security.
A convoy including 20 aid trucks entered the Gaza Strip from Egypt, carrying medicine and food supplies, as Palestinians run short of food, medicine and water.[1]

Jordan

The UNHCR states that there are currently 653,292 registered refugees in Jordan up until the beginning of October.

The proportion of Syrian displaced people registered within the UNHCR for October, are distributed as follows:

-193,803 in Amman Governorate (29.7 %)

-169,114 in Mafraq Governorate (25.9%)

-127,427 in Irbid Governorate (19.5%)

-96,926 in Zarqa Governorate (14.8%)

-16,822 in Balqa Governorate (2.6%)

-12,782 in Madaba Governorate (2%)

-8,505 in Jarash Governorate (1.3%)

-8,271 in Karak Governorate (1.3%)

-8,274 in Maan Governorate (1.3%)

-5,704 in Ajlun Governorate (0.9%)

-3,783 in Aqaba Governorate (0.6%)

-1,411 in Tafilah Governorate (0.2%)

-470 in other (0.1%)

The Hashemite Kingdom of Jordan announced it is donating US$ 4.3 million (3 million Jordanian Dinars) in support of UNRWA to fund its response to the unfolding tragedy in the Gaza Strip.[2]
UNICEF and Bank al Etihad have renewed their partnership for a second year to continue empowering young people in Jordan to engage in climate action both in their communities and through national and global platforms.[3]

Iraq

The UNHCR states that there are currently 298,002 registered Syrian refugees in Iraq.

The proportion of displaced Syrian people registered within the UNHCR up until the beginning of October, are distributed as follows:

-141,617 in Erbil (47.5%)

-74,056 in Dahuk (24.9%)

-38,329 in Sulaymaniyah (12.9%)

-18,199 in Ninewa (6.1%)

-15,298 in Baghdad (5.1%)

-2,095 in Kirkuk (0.7%)

-1,621 in Anbar (0.5%)

-5,004 in other areas (1.9%)[4]

The Peace Winds NGO completed the updates of the homes of 4500 Syrian refugees in Iraq.[5]
The Iraqi Observatory for Human Rights released a statement that the southern Iraqi governorate of Muthanna is experiencing a major water crisis that may later cause health, social as well as security problems. If not tackled, this will cause many residing in this poor area to migrate.[6]

Lebanon

Since the beginning of October, the number of registered Syrian refugees in Lebanon is 789,842.

Refugees in Lebanon are distributed as follows:

-302,253 in Bekaa (38.3%)

-222,239 in North Lebanon (28.1%)

-176,182 in Beirut (22.3%)

-89,168 in South Lebanon (11.3%)[7]

The World Health Organization (WHO) has expedited the delivery of critical medical supplies to Lebanon in order to be ready to respond to any potential health crisis or humanitarian crisis.[8]
To avert a crisis that will lead to more refugees, UN Special Coordinator Joanna Wronecka started intensifying efforts to protect Lebanon from a spillover of the dramatic warfare between [Israel] and Hamas in Gaza. [9]
Since October 8 there has been an increase in cross-border incidents in south Lebanon, resulting in the displacement of people both within the South and elsewhere within the country.[10]

Syria

According to Save the Children, at least 17 children are reported to have been killed, and hundreds of others injured, in five days of violence across Syria. Also an estimated 25,000 people have been newly displaced, with families and children once again being forced to flee their homes in fear.[11]
As military conflict escalated in Western Syria, protection partners have supported 470 families with transportation services to relocate, in some cases with their belongings, to safer areas.[12]
Action For Humanity and Syria Relief released a statement condemning, in the strongest terms possible, the recent escalation of violence in northwest Syria.[13]
According to NGOs observing developments across Syria, the escalation in Syria has caused tens of deaths and injuries among civilians, wide-scale destruction of vital civilian infrastructure. This has threatened access to essential services for hundreds of thousands of people, including water, electricity, and lifesaving humanitarian assistance.[14]
Northeast Syria experienced a significant increase in aerial strikes since October 4. At the time of issuance, a total of 30 strikes have been verified, impacting civilian lives and leading to major damage of critical civilian infrastructure including water stations, power stations, farms and sites in the direct vicinity of civilian villages and IDP camps.
At least six children died in an attack on a military academy in Homs yesterday that killed more than 100 people, as violence escalates across Syria, said Save the Children.[15]

Cyprus

Police in Cyprus arrested 10 individuals suspected of running a crime gang trafficking migrants, as the island saw a fresh spike in arrivals in October.
Cyprus’s Minister of Interior called on the EU to support the authorities of the Republic of Cyprus financially and with infrastructure to handle the current surge in refugees.[16]

[1] Al Jazeera, Oct 21, 2023, https://www.aljazeera.com/news/2023/10/21/rafah-border-crossing-between-gaza-egypt-opens-for-aid-trucks

[2] UNRWA, Oct 12, 2023, https://www.unrwa.org/newsroom/news-releases/jordan-donates-us-4.3-million-support-palestine-refugees-and-unrwa-operations

[3] OCHA, October 1, 2023, https://reliefweb.int/report/jordan/bank-al-etihad-and-unicef-renew-partnership-empower-young-climate-leaders-jordan-enar

[4] https://data2.unhcr.org/en/situations/syria/location/5

[5] OCHA, Oct 11, 2023, https://reliefweb.int/report/iraq/iraq-peace-winds-has-completed-updating-homes-about-4500-syrian-refugee-families

[6] OCHA, Oct 4, 2023, https://reliefweb.int/report/iraq/water-shortages-threaten-residents-muthanna-and-prompting-their-migration

[7] https://data2.unhcr.org/en/situations/syria/location/71

[8] OCHA, Oct 15, 2023, https://reliefweb.int/report/lebanon/who-delivers-medical-supplies-lebanon-violence-occupied-palestinian-territory-intensifies-enar

[9] OCHA, Oct 14, 2023, https://reliefweb.int/report/lebanon/un-special-coordinator-intensifies-efforts-protect-lebanon-regional-conflict

[10] OCHA, Oct 23, 2023, https://reliefweb.int/report/lebanon/dtm-lebanon-mobility-overview-round-3-17-october-2023

[11] OCHA, Oct. 12, 2023, https://reliefweb.int/report/syrian-arab-republic/least-17-children-killed-wave-violence-across-syria

[12] OCHA, Oct 9, 2023, https://reliefweb.int/report/syrian-arab-republic/north-west-syria-nws-protection-cluster-flash-report-1-forced-displacement-and-confinement-nws-october-5-7-2023

[13] https://reliefweb.int/report/syrian-arab-republic/action-humanity-and-syria-relief-statement-october-2023-escalation-violence-northwest-syria

[14] OCHA, Oct 6, 2023, https://reliefweb.int/report/syrian-arab-republic/aid-agencies-syria-warn-grave-impact-escalating-hostilities-across-syria

[15] OCHA, Oct 6, 2023, https://reliefweb.int/report/syrian-arab-republic/syria-urgent-calls-ceasefire-following-new-wave-violence-and-deaths-least-six-children

[16]In Cyprus, October 24, 2023, https://in-cyprus.philenews.com/local/cyprus-on-alert-after-information-about-syrian-refugees-on-the-lebanese-coast/

An All-Out Conflict?

Middle East Socioeconomic Overview

Report: October 2023

1. Table of Acronyms

2. Introduction

3. The Socio-Economic Situation

Egypt

Jordan

Iraq

Lebanon

Palestine

Syria

Cyprus

4. The Humanitarian Situation

Egypt

Jordan

Iraq

Lebanon

Syria

Cyprus

But the end is still to come

Momentum, the Weekly Newsletter from the Middle East Council of Churches

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