A More Resilient Region
Report: June 2023
Although the international economy is in bad shape, the Middle East continues to grow. Photo credit: Fair Observer
While the global economic situation is not improving, the economies of the Middle East nations are bearing the brunt. As markets are contracting and inflation continues to impact companies and citizens alike, most ME countries are either rallying up their resources or enacting reforms to adapt to the global situation. Despite this, investments continue to flow to the region in various sectors.
1- The Socio-Economic Situation
Egypt
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.
As part of the agreement, the Jordanian side will receive LNG from Egypt and pump back some of the natural gas through transborder pipelines to the African country (Shutterstock)
Despite worries that Egypt might experience a severe currency crisis similar to that of Lebanon, Egyptian President Abdel Fattah al-Sisi assured citizens that a further devaluation in the currency is not possible. Speaking at a youth conference, he made it clear that any further depreciation would harm Egyptian citizens and national security. His words come during a time Egypt is passing through an economic crisis which has left commentators speculating about possible social problems. The war in Ukraine and the disruption of energy supplies have exposed Egypt’s weakness in terms of over-reliance fuel and food imports, which have become too expensive for the country to afford. As a result of the hike in fuel and food prices, the consequential devaluation, and the inflation of other commodities, the middle and working classes are being affected the most. Egypt has experienced previous economic crises, but unfortunatly, this time its different. The IMF is not willing to support the country financially, unless Egypt agrees to implement structural reforms such as the decreasing size of the public sector and limiting the influence of the military in running things. So far, authorities have yet to heed to the remarks of the IMF. However, the authorities’ call for a national dialogue with civil society and opposition forces, reflects a desire to broaden their base of support and to address the problems impacting the economy.
Even though the economy doesn’t seem to be in good shape, there were some economic developments that can act in Egypt’s favour. Firstly, Egypt will be allocating $4.14bn for its food subsidy programme for the upcoming fiscal year beginning on July 1, up from $2.92bn This should decrease the economic burdens on working class which is struggling to make ends meet. As for the country’s investment portfolio, the country continues to attract foreign capital. For instance, Qatar's sovereign wealth fund is in talks with Egypt about potentially investing in seven historic hotels there, in what could be a landmark deal between the two countries. According to official sources, 445 billion USD are to be invested in Cairo Marriott Hotel, Steigenberger El Tahrir in Cario, Marriott Mena House at the Giza pyramids, Sofitel Legend Old Cataract in Aswan, Mövenpick Aswan, Sofitel Winter Palace in Luxor and Steigenberger Cecil Alexandria. Moreover, Egypt has signed an agreement with Jordan over the development of natural gas infrastructure. According to Egypt’s Ministry of Petroleum and Mineral Resources, the agreement aims to reduce the operational costs of LNG storage and regasification and secure gas supplies for both countries.
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.
Prime Minister Bisher Al Khasawneh presides over a meeting of the Investment Council (Petra photo)
The Department of Statistics (DoS) of Jordan recently announced the decrease of the unemployment rate by 0.9% to 21.9%, marking an incremental improvement in livelihood conditions within the country. Over the past years Jordan has been trying to reduce unemployment by attracting investment from other countries. By doing so it would provide jobs for thousands of its citizens as it cradles its drive for privatization. Jordan is hoping to impress Western investors by considering the recommendations of the IMF for further privatization. However, what is getting in the way of the process is its over-inflated public sector which is hosting large numbers of employees occupying the same position. The government has tried to solve the problem, but social structures makes the issue ever so problematic. Nevertheless, the government is continuing to enhance its investment portfolio by giving the issue top priority. For instance, the Investment Council held a meeting presided by Prime Minister Bisher Al Khasawneh, to discuss the Investment Environment Enhancement Law and its importance in balancing the investment landscape within the Ministry of Investment. As such, the attendees searched for ways to further unify investment framework, while improving the streamlining and simplification of procedures and simplify. This would eliminate the need for investors to navigate various government departments and agencies to complete their transactions. A noteworthy outcome of the meeting was the approval of the integrated investment platform (invest.jo) that adheres to international best practices and serves as a gateway to promote investment opportunities in Jordan. Already, Jordan is eyeing 2.5 billion dollars’ worth of investment from Saudi Arabia and various other countries from 2023 to 2026.
Iraq
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.
Iraqi Prime Minister Mohammed Shia Al Sudani welcomes Sheikh Tamim, Emir of Qatar, to Baghdad. AFP
With brotherly ties growing between Iraq and Qatar, the latter’s investment portfolio is expanding in Iraq. Three Qatari companies and Iraq’s National Investment Commission have agreed to develop $9.5bn worth of projects in Iraq, including the construction of a pair of powerplants that will generate a total of 2,400 megawatts. 7 billion dollars will go to managing hospitals developing two “new comprehensive cities” and building a series of new five-star hotels totalling 10,000 rooms. As for the construction of powerplants, UCC Holding and the investment commission signed a 25-year, public-private partnership linked to two power plants, which will cost $2.5bn to build. This move is ought to reduce Iraq’s reliance on energy from Iran and therefore reduce costs. As investments pile up in Iraq, a new 153 billion usd budget was rattified to accommodate the incoming wave of foreign capital. As such, the new budget covers the repairing of war-damaged infrastructure and the creation of new jobs in the public sector to handle the bureacratic concequences of the investments. It is estimated that the budget will create tens of thousands of public sector jobs as the country, which has been affected by decades of war and sectarian strife in the wake of the 2003 US military invasion, wants to improve services and rebuild war-damaged facilities. The move definetly raised morals in the country, where poverty is still at a record high number. Luckily with Iraq’s important strategic location and its improving relations with neigbouring countries including Turkey, the country’s economy is heading towards a revival.
Lebanon
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
-Confirmed cases: 1,237,556
-Deaths: 10,914
-As of 21 December 2022, a total of 5,814,699 vaccine doses have been administered.
Lebanon's 2019 financial collapse, exacerbated by the Covid-19 pandemic and the 2020 Beirut port blast, has led to a deepening economic crisis in the country (Getty Images)
During this month, Speaker of Parliament of Lebanon called all members to gather for a session that would decide the fate of the Presidency. Unfortunately, a stalemate occurred as candidates received almost similar votes from divided MPs. The session, which was broadcasted on TV, demonstrated the paralysis in the political sphere that has seeped into all other aspects of the country. Currently, Le Drian, Former French Minister for Europe and Foreign Affairs, promissed a new round of consultations with parliamentary blocks to break this deadlock. Unfortunately, history has shown interventions of this sort yield no results- Lebanese politicians are too divided and would rather keep the country at standstill for eternity. Moreover, there is an ongoing discussion about the candidacy of the Army Commander for presidency. Although he might be suitable for this role and is a favored option for several politicians, some voiced their opinion critisizing such an idea by deeming it a “breach of constitution”. During all this debate over who will sit in the Presidential Palace, attention is being diverted away from other critical issues impacting the country. Till today and every now and then, banks are ransacked by angry citizens who are trying to get their money back. As for the country’s infrastructure it is slowly deteriorating while the government fails to pave a simple road. This diminishes the credibility of the government whose role continues to contract day by day. Even during the height of the civil war, the government was able to pay public employee salaries. Due to the current situation in Lebanon, there are constant rumors that there might not be funds to cover salaries for a specific month. In essence, the country is slowly eroding away, while its citizens suffer and its politicians quarel.
Palestine
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
Palestinian economy could get much-needed boost after Israel approves Gaza Strip gas development. Photo credit: Oil&Gas.
This month, Palestinian decision makers were pleased to receive the news about the preliminary approval for the development of a gas field off the Gaza Strip. It is a much needed initiative to fill the coffers of Palestine’s cash-strapped economy. Of course, there will have to be security coordination between the Palestinian Authority, Israel, and Egypt on various levels, but the rewards of extracting gas from the field can boost the economy of all parties involved. The area is estimated to hold over 1 trillion cubic feet of natural gas, much more than is needed to power the Palestinian territories and some of which could potentially be exported. In preparation for an increase in economic activity between the two countries, Egypt is building a seaport off the coast of Port Said, renovating the Arish International Airport, and paving the long roads connecting the Gaza Strip and Cairo. Since Egypt is hoping to improve its energy security, it is aiming to increase cooperation with Palestine. However, the relationship between Palestine and Israel remains to be thorny as the latter continues to practice various forms of economic blockades and commit social and humanitarian violations. Recently, the Israeli government gave far-right Finance Minister Bezalel Smotrich practically full authority to approve planning in West Bank settlements. In other words, the decision dramatically expedited and eased the process for expanding existing West Bank settlements and retroactively legalizing some illegal outposts. As a result, tensions flared up between the Israeli government and the Palestinian Authority, especially when word about this decision came out during the same day the news about the gas field was announced.
Syria
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.
Smoke rises from a building following a reported strike on Syria's northwestern rebel-held Idlib province, on 25 June 2023 (AFP)
Despite the increase in military confrontations during this month, the Syrian government announced new projects in Deir Ez Zour that include sectors such as tourism, banking, and agriculture sectors. The motive of such a move is to boost local economy while connecting the city with the rest of Syria. Also, authorities aim to transform the city from a war-torn area to a renovated one that can attract future investments. Similarly, the authorities began investing in the wheat sector in the city of Damascus, by rehabilitating large grain silos damaged back in 2011. With Syria passing through a food crisis which was exacerbated by the depreciation of the Syrian pound and the shortage of dollars, repairing the silos will prove to be beneficial for the capital’s food security. As such, this will allow the country to store much needed grain during intense economic uncertainty. Moreover, the government is expecting this year the wheat harvest to be higher than 2022 while it expedites its actions to buy wheat from farmers. As for the banking sector, Kuwaiti investors bought stakes in one local bank. Although the share of the stake is 1%, this will pave the way the future incremental investments, especially during a time when Syria is repairing ties with the rest of the Middle East and Arab world. The government is currently eyeing its aviation sector as it predicts increased traffic at its airports. As such, further investment in the aviation sector is expected during the coming period.
Syria has a lucrative future ahead of it. However, the heightened military tensions in some parts of the country and the death of civilians are not making it much of an investment destination for many companies. The corruption existing within government bureaucracy alone is enough to repel any entity that wishes to make profit. Also, the competition system in place, is not attractive for companies who are used to operating in a free market. As such, Syria will have to rely on its Arab brethren as much as possible to upgrade its economy. It is either that or the government will have to launch a full-scale reform program that would allow companies easy access to the Syrian market. Yet knowing that Syria is home to several corrupt business men and influential war-profiteers, the issue of implementing reforms might not be much of a successful venture.
Cyprus
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
-Confirmed cases: 660,854
-Deaths: 1,364
-As of 13 May 2023, a total of 1,858,796 vaccine doses have been administered.
People enjoy the sea in southern coastal city of Larnaca, in the southeast Mediterranean island of Cyprus [AP]
According to data published by the Cyprus Statistical Service (CyStat), tourism arrivals in Cyprus reached 420,076 in May 2023, compared to 315,018 in May 2022, recording an annual increase of 33.3%. This forecasts a profitable summer season during which tourists from several European countries will be visiting the island to enjoy its various beach resorts. Despite this positive revelation, it has been reported that Cyprus has been dropping in terms of competitiveness according to the IMD World Competitiveness Centre. As such, Cyprus has dropped 5 positions in the competitiveness index falling from the 40th position to the 45th among 64 evaluated countries. The decline was due to the worsening of the four aspects that are part of the overall competitiveness assessment such as economic performance, government efficiency, business efficiency, and infrastructure. Although the country is still doing well when compared to other countries, the slowdown in its economy is attributed to reduced foreign direct investments, a deficit in the balance of payments, deterioration of trade terms, and limited goods exports. Nevertheless, this can be resolved due to the government’s tendency to carry out periodic reforms and Cyprus’s competitive tax regime, business-friendly environment, high level of education, and skilled workforce. Large private investments, digital and green transition projects, and reforms in the Recovery and Resilience Plan context will also make it easier for the government to enact additional changes.
2- The Humanitarian Situation
Egypt
The Egyptian authorities slapped a visa requirement on Sudanese refugees trying to enter the country. As a result, the UNHCR declared that it is finding it difficult to assist refugees fleeing to Egypt.[1]
Jordan
The UNHCR states that there are currently 660,022 registered refugees in Jordan up until the beginning of June.
The proportion of Syrian displaced people registered within the UNHCR for June, are distributed as follows:
-196,655 in Amman Governorate (29.8 %)
-169,049 in Mafraq Governorate (25.6%)
-129,484 in Irbid Governorate (19.6%)
-97,751 in Zarqa Governorate (14.8%)
-17,264 in Balqa Governorate (2.6%)
-13,074 in Madaba Governorate (2%)
-8,579 in Jarash Governorate (1.3%)
-8,373 in Karak Governorate (1.3%)
-8,190 in Maan Governorate (1.2%)
-5,818 in Ajlun Governorate (0.9%)
-3,817 in Aqaba Governorate (0.6%)
-1,468 in Tafilah Governorate (0.2%)
The World Bank has approved US$250 million in financing to improve the efficiency of water services in Jordan through the rehabilitation of water distribution networks, to benefit 1.6 million Jordanians and refugees.[2]
During this month, refugee deportations increased noticeably. So far, there are no figures to measure the migration phenomenon.[3]
Iraq
The UNHCR states that there are currently 291,515 registered Syrian refugees in Iraq.
The proportion of displaced Syrian people registered within the UNHCR up until the beginning of May, are distributed as follows:
-137,022 in Erbil (44.9%)
-87,884 in Dahuk (28.8%)
-38,440 in Sulaymaniyah (12.5%)
-18,232 in Ninewa (6%)
-14,059 in Baghdad (4.6%)
-1,907 in Kirkuk (0.6%)
-1,504 in Anbar (0.5%)
-6070 in other areas (1.9%)[4]
Representatives from the United Nations Office on Drugs and Crime (UNODC), the Iraqi Government, the international community, Civil Society Organizations (CSOs), Non-Governmental Organizations (NGOs), and the media gathered in Baghdad, Iraq to mark the achievements of the project “Supporting victims of terrorism within the criminal justice framework, including psychological support” in Iraq and its latest awareness raising campaign “Victims’ Voices, Silencing Terrorism.”[5]
The United Nations in Iraq, including ILO and UNICEF call on all partners to ensure enhanced social justice and step up the fight against child labor.[6]
Lebanon
Since April, the number of registered Syrian refugees in Lebanon is 805,326.
Refugees in Lebanon are distributed as follows:
-312,754 in Bekaa (38.8%)
-224,541 in North Lebanon (27.9%)
-178,651 in Beirut (22.2%)
-89,380 in South Lebanon (11.1%)[7]
Despite UN protection, increasing numbers of Syrians are being rounded up by the army and sent back to Syria[8].
Lebanese caretaker Minister of the Displaced Issam Sharafeddine has expressed optimism on the gradual return of displaced Syrians after a two-day visit he made to Damascus. [9]
Amnesty International issued a statement condemning the Lebanese government for the increase in Syrian refugee deportation. “The Lebanese authorities have deliberately mismanaged the country’s economic crisis, impoverishing millions and denying them their basic rights. But instead of adopting much-needed reforms, they have instead resorted to scapegoating refugees for their own failures.” Amnesty claimed.[10]
The World Bank Group’s Board of Executive Directors approved a US$200 million financing to improve the resilience of farmers and small and medium enterprises (SMEs) in the Lebanese agri-food sector in the face of the multiple crises facing the country.[11]
Syria
Describing a worsening humanitarian and security situation in Syria, amid an uptick in violence in the north-west of the country and with 90 per cent of Syrians living below the poverty line, senior United Nations officials called for the Humanitarian Response Plan to be fully funded and the cross-border aid mechanism to be renewed for another 12 months, as they briefed the Security Council.[12]
Save The International Rescue Committee (IRC) and CARE hosted a joint media briefing to call for the renewal of a critical UN Security Council resolution on cross-border aid into northwest Syria.[13]
The SRTF Management Committee (MC) Approves Five New Projects and Interventions under the Health and Agriculture Sectors. [14]
Norway declared that it will provide NOK 1.7 billion in support to Syria as the humanitarian situation continues to deteriorate.[15]
Under Secretary for Civilian Security, Democracy, and Human Rights Uzra Zeya announced $920 million in additional U.S. humanitarian assistance for Syria at the Brussels VII Conference on “Supporting the Future of Syria and the Region.”[16]
Cyprus
Cyprus launched an information campaign to counter a spike in irregular migration, authorities, saying it is struggling with the highest inflows in the European Union.[17]
MECC Communication and Public Relations Department
[1] VOA News, https://www.voanews.com/a/recent-conflicts-in-africa-spawn-fresh-wave-of-refugees-to-egypt/7137381.html
[2] OCHA, June 18, 2023, https://reliefweb.int/report/jordan/estimated-16-million-people-jordan-benefit-new-project-tackle-jordans-water-crisis-and-build-climate-resilience-enar
[3] Atlantic Council, June 20, 2023,https://www.atlanticcouncil.org/blogs/menasource/any-nationality-just-not-syrian-refugee-deportations-surge-in-jordan-lebanon-and-turkey/
[4] https://data2.unhcr.org/en/situations/syria/location/5
[5] OCHA, June 13, 2023, https://reliefweb.int/report/iraq/unodc-victims-voices-silencing-terrorism-campaign-ceremony-marks-projects-achievements-enarku
[6] OCHA, June 12, 2023, https://reliefweb.int/report/iraq/end-child-labour-iraq-united-nations-iraq-including-ilo-and-unicef-call-all-partners-ensure-enhanced-social-justice-and-step-fight-against-child-labour-enar
[7] https://data2.unhcr.org/en/situations/syria/location/71
[8] Middle East Eye, June 18, 2023, https://www.middleeasteye.net/news/lebanon-syria-registered-refugees-face-deportation
[9]Aawsat, June 27, 2023 https://english.aawsat.com/arab-world/4403741-lebanese-minister-displaced-optimistic-return-syrian-refugees
[10] Amnesty, https://www.amnesty.org/en/latest/news/2023/05/lebanon-halt-summary-deportations-of-syrian-refugees/
[11] OCHA, June 29, 2023, https://reliefweb.int/report/lebanon/new-world-bank-program-provides-lifeline-lebanons-poor-bolstering-sustainable-food-systems-enar
[12]OCHA, June 29, 2023 https://reliefweb.int/report/syrian-arab-republic/briefers-stress-security-council-syrias-worsening-situation-needs-fully-funded-humanitarian-response-plan-12-month-extension-cross-border-aid-mechanism
[13] OCHA, June 26, 2023, https://reliefweb.int/report/syrian-arab-republic/irc-and-care-call-unsc-renewal-critical-syria-cross-border-aid-resolution
[14] OCHA, Relief Web, https://reliefweb.int/report/syrian-arab-republic/srtf-management-committee-mc-approves-five-new-projects-and-interventions-under-health-and-agriculture-sectors
[15] OCHA, June 16, 2023, https://reliefweb.int/report/syrian-arab-republic/norway-provide-nok-17-billion-support-syria
[16] OCHA, June 2023, https://reliefweb.int/report/syrian-arab-republic/united-states-announces-920-million-additional-humanitarian-assistance-syria
[17] Reuters, June 6, 2023, https://www.reuters.com/world/europe/cyprus-unveils-campaign-counter-spike-asylum-seekers-2023-06-06/