Amidst Global Change
Report: January 2023
Undeniably, the ME is split between nations which are deep economic strain and ones which are making impressive financial revenue due to the export of oil. How will this fact shape regional relationships and politics? Photo credit: https://www.fairobserver.com/
Despite the positive advancements some Middle East countries are witnessing, others such as Egypt, Lebanon, Syria, and Palestine are struggling amid economic difficulties. So far, global inflation has yet to let up and global recession might be soon upon us. As such, it will be difficult for most of these countries to maneuver past all the global changes. Hopefully, better off countries, especially those that benefited from the increase in oil prices, would offer assistance or forms of partnership that can boost the regional economy.
2. The Socio-Economic Situation
Egypt
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
-Confirmed cases: 515,609
-Deaths: 24,805
-As of 14 January 2023, a total of 101,227,614 vaccine doses have been administered
The Egyptian pound lost half of its value against the US dollar since March 2022, Photo Credit: Khaled DESOUKI
Egypt began the year by the president stating that the country is headed towards difficult times. As such he urged citizens to trust the government in its attempt to regain control of the situation. So far the government aims to curb state spending, freeze the implementation of costly new projects which are a drain on the country’s foreign currency reserves and oblige state agencies to embark on austerity measures. Moreover, the Central Bank of Egypt (CBE) is continuing its quest in bringing down inflation; It aims to reduce inflation to 7 percent by the fourth quarter of 2024. However, details of such an ambitious plan is yet to be revealed to the public. Many are skeptical about the CBE’s ability to resolve the matter given the bank’s track record in raising interest rates and devaluating the pound thus setting off an economic shock that hit millions who found their savings running low as the cost of living surged. Afterall, the CBE is bound to the wishes of the IMF in order to receive a bailout loan amid a shortage of foreign currency reserves.
As part of its plan to oblige to the demands of the IMF, Egypt has agreed to a series of measures as part of an IMF package. This included selling billions of U.S. dollars worth of state assets to international investors which would entail the reduction of the role of the state and military-owned companies and replacing them with private businesses. This inturn will lead to the adoption of a more flexible currency exchange system. Unfortunately, many analysists still view as the autocratic regime will continue to get in the way and delay such needed reforms. However, with tens of millions of people struggeling to put food on the table while the Egyptian pound sinks to new lows, may indeed force authorities to heed the economic meltdown and implement a set of actions that would put Egypt back on track. Yet, it is no easy task considering the war in Ukraine and the increasing inflation which has reached above 20%. Moreover, its over reliance on the IMF may have put in a state of perpetual dependency rather than searching for other means to build its foreign currency reserve. As a result and for the time being, Egypt and companies operating within the country, will have lesser access to much needed foreign currency.
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 began its recovery from the COVID-19 pandemic with a GDP growth rate of 2.6 per cent in 2022 (Jordan Times File Photo)
His Majesty King Abdullah, during a follow-up meeting on the government’s plans for investment at Al Husseiniya Palace, reaffirmed the importance of defining investment priorities, in accordance with the Economic Modernization Vision and administrative modernization plans. If plans go as planned, 2023 will be the year of the implementation of the vision. His Majesty also stressed on the importance of decisiveness in its implementation and on moving forward with promoting investment opportunities in target markets, to make Jordan an attractive investment destination. The King also highlighted the need for accelerating public-private sector partnership projects in which investments can yield returns that can contribute to economic growth. Investment Minister Kholoud Saqqaf added to what his Majesty had to say, by underscoring the government’s investment promotion strategy (2023-2025), which will be launched soon. Included in the process is ICT and related services sectors, as well as tourism and medical tourism, pharmaceuticals and bio-sciences, healthcare, the food industry, clothing and textiles, agriculture, logistics, mining and chemicals.
Jordan’s move to develop its economy comes in tandem with positive projections for 2023. As such, Jordan is expecting a 2.7 growth this year, being one of the few economies that international institutions expect to maintain improved economic performance. With investments on the front door, the country can hope for a more stable economy.
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.
Siemens Energy signs agreement to develop Iraq's power grid, Reuters.
Like Jordan, the economic outlook of 2023 for Iraq seems bright. Till now, Iraq markets and economy have managed to stand firm despite tense geopolical situations. What’s even better is that throughout 2022 Iraq’s budget revenues increased by 59% yearly to $100.9 billion, mainly due to the increase in oil prices. As a result, the budget surplus increased by approximately ten times from $4.8 billion to $40.3 billion during 2022 compared to the previous year. Iraq's central bank foreign currency reserves too witnessed a surge, rising to $96 billion as of December 16, 2022. Despite the paralysis the October parliamentary elections had inflicted on the country, the new President, and the PM immediately began forming bilateral relations with representatives from Saudi Arabia, Japan, China, England, and France to call on them to invest in Iraq. For instance, Saudi Arabia’s Public Investment Fund have very recently announced that it would set up a company to invest in Iraq, which is expected to trigger a host of government laws and regulations to attract further overseas investors to the country. Another instance, is the inking of a deal with Germany’s Siemens Energy to develop the country's power network. Under the new arrangement an additional 11 gigawatts for local power production will be generated. The planned projects include constructing and developing power generation facilities for both conventional and renewable energy sources.
Lebanon
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
-Confirmed cases: 1,227,153
-Deaths: 10,776
-As of 21 December 2022, a total of 5,814,699 vaccine doses have been administered.
Protesters in Beirut ask for the return of their deposits, blocked in Lebanese banks, on 5 October 2022 (AFP)
As Lebanon enters its forth year in its economic crisis, politicians and leaders are still unable to hold productive talks. They’d rather keep Lebanon drifting into oblivion than cooperating with one another to pull the country from the abyss. The prospects for any form of national dialogue serious enough to bring about results in terms of justice and accountability are practically nonexistent. The only way that they might give way for productivity is to allow the election of a new president. However, even such a miniscule move, if it is allowed, would do little to change how things are in the country. Meanwhile, Lebanon continues to ask for humanitarian assistance to tend to the growing poverty in the country as around 80% are in need of assistance. Such was the case for Rami Mortada, the Lebanese ambassador to Britain, who made a plea to the international development committee for help. He insisted that Lebanon was at a “Breaking Point” due to the economic crisis and the presence of refugees. Unfortunately, the UK's aid watchdog, the Independent Commission for Aid Impact, published a report warning that the UK "no longer" has the ability to respond to implement humanitarian programs as it once did, after its budget was cut by a third.
Neverthless, there might be some silver lining to everything. During January, Lebanese people took to the streets to protest the detriorating situation. Their move coincided with the presence of European judges in the Justice Palace in Beirut investigating the central bank and Riad Salameh, its governor, over alleged corruption, money laundering, tax evasion, and use of forged documents. Moreover, a french delegation was also in Lebanon to dig in to the matter of the Beirut explosion. The renewed attention coming from Western nations have rekindled hope within some Lebanese. Amidst the harsh circumstances, citizens of this land will need every shred of positivity to survive the current situation. It is a pitty however, how Lebanese only wait for foreign assistance to mend their countries vulnerabilities. Unfortunately, a home grown solution remains absent. The country seems to be good at doing one thing: Importing/salvaging whatever it can get from the outside.
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
The Palestinian president, Mahmoud Abbas, chairing a consultative meeting in the West Bank city of Ramallah in December. Photograph: APAImages/Rex/Shutterstock
According to the Palestine Monetary Authority (PMA) and the Palestinian Central Bureau of Statistics (PCBS) in their jointly issued press release, the Palestinian economy, along with the limited economic recovery in 2022, will be continuing into a slowdown for 2023. This is due to a wave of global inflation, the tightening of monetary conditions, and the exacerbation of problems related to supply chains, specifically primary and basic commodities, as a result of the continuation of the Ukrainian- Russian war. The slowdown in the economy is also due to increase of the uncertainty resulting from the government's financial situation, the noticeable rise in domestic price levels, and the decline in the purchasing power of per capita income. Based on such factors, 2023 is expected to record a growth rate of about 2.5% compared to estimated growth of about 3.6% during the year 2022. The only positive indicator that is set to slightly improve is the unemployment rate which should drop from 25.7% in 2022 to 25.5% in 2023.
Not covered by the PMA and PCBS’s press release is the continued crackdown on Palestinian economy by Israel. The Palestinian Authority is currently fearing more restrictive measures issued by the new Israeli ultranationalist coalition that would not only have detrimental effects on the Palestinian economy but would seek to dismantle the Palestinian Authority all together. Today, we are still at the beginning of the year and developments in that regard have yet to materialize. The region awaits what Benjamin Netanyahu have in store for Palestine.
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 4,971,203 vaccine doses have been administered
A man walks past heaters for sale in Damascus, Syria December 6, 2022. (Reuters)
The Syrian economy is at its lowest point with spiraling inflation, a currency continuously losing its value and extreme fuel shortages in both government-run and opposition-held areas. Life in Damascus has drastically slowed down as streets are almost free of cars, households receive limited electricity, and the cost of food and other goods has skyrocketed. To make matters worse, fuel supplies from Iran have witnessed a slowdown thus diminishing much needed fuel deliveries. Also, Iran is now putting harsher conditions on its supplies of crude oil to Syria. A recent report has suggested that Tehran has doubled the price at which it sells its oil and that it is now requiring Damascus to pay in cash. All such calamities, have led to increasing protests all over Syria including areas run by the Syrian government. Consequently, violent confrontations have erupted leading one to ponder where is this all headed. Nevertheless, there are no indications that Syria will be going back in time to 2011 as all the protests are localized. Syria will continue to limp onwards as it relies on foreign aid and remittance from Syrians living abroad.
Despite the fact the country is in a deplorable state, a few positive developments were noted during this month. One instance is the signing of many agreements with a number of “friendly countries” and the activation of the barter system for goods and commodities to secure materials that are not produced locally. Since Syria is in a foreign currency crisis, the barter system can allow the government to trade based on a material to material basis. One example, is the recent barter deal with Belarus after it had started excavation of a new site in Palmyra to increase phosphate production. Also on the bilateral front, Iraq has implemented a decision to allow Syrian trucks to enter the country for the first time since the COVID-19 pandemic three years ago. This should boost trade relations between the countries and allow Syria access to additional trade options and needed materials. Additionally, Syria and Iran have agreed to renew an economic strategic arrangement between the two countries. Most of the talks were regarding energy collaboration and ways to bypass Western sanctions.
Cyprus
According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
-Confirmed cases: 640,729
-Deaths: 1,280
-As of 24 December 2022, a total of 1,847,465 vaccine doses have been administered.
Despite the global inflation and recession, Cyprus seems to be one step ahead. Photo credit: cyprus-mail.com
The Cypriot economy witnessed a strong growth rate in 2022 of approximately 6 per cent. This number came as a surprise for the Ministry of Finance which estimated it to be at 2.7%. As for 2023, the Ministry of Finance expects the growth rate to slow down to around 3 per cent. This is good news when comparing Cyprus with Europe which is expected to fall into a recession. 2023’s positive outlook is also based on an earlier assessment of Standard and Poor’s which upgraded Cyprus’ long-term credit rating, to BBB from BBB-, with a stable outlook, stressing on the diversified Cypriot economy that has proven resilient to external shocks. Similarly rating agency Moody’s upgraded Cyprus’ outlook from stable to positive. The continued growth of the economy is expected to lead to a further decrease in unemployment to around 6.4 per cent in 2023, 5.7 per cent in 2024, and 5 per cent in 2025, a rate equivalent to full employment conditions. Concerning the 2023 budget, it is designed to create a surplus, although there is an increase in development and social spending. The primary surplus is estimated at 2.7 per cent of GDP. Moreover, Cyprus throughout 2023 and under the National Resilience and Recovery Plan is expected to receive funds that are forecasted to have an economic impact of up to €4.4 billion. The plan is also set to complete local government reform and adopt policies that fight corruption.
3. The Refugee Situation
Egypt
The WFP reported on January 22 that the program assisted 303,730 people in December 2022. 211 metric tons of food assistance were distributed and 3.1 cash-based transfers were made.
Jordan
The UNHCR states that there are currently 660,892 registered refugees in Jordan up until the beginning of January.
The proportion of Syrian displaced people registered within the UNHCR for January, are distributed as follows:
-196,539 in Amman Governorate (29.8 %)
-169,004 in Mafraq Governorate (25.6%)
-129,918 in Irbid Governorate (19.7%)
-97,862 in Zarqa Governorate (14.8%)
-17,363 in Balqa Governorate (2.6%)
-13,122 in Madaba Governorate (2%)
-8,688 in Jarash Governorate (1.3%)
-8,416 in Karak Governorate (1.3%)
-8,280 in Maan Governorate (1.3%)
-5,903 in Ajlun Governorate (0.9%)
-3,795 in Aqaba Governorate (0.6%)
-1,538 in Tafilah Governorate (0.2%)
According to Zeina Toukan, Jordan's Minister for Planning and International Co-operation, donor funding to support Syrian refugees in Jordan is diminishing and is not nearly enough to cover their needs. [1]
Jordan's Deputy Prime Minister and Foreign Minister Ayman Safadi stressed the need to diversify funding sources for the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) to ensure its financing sustainability.[2]
Iraq
The UNHCR states that there are currently 258,541 registered Syrian refugees in Iraq.
The proportion of displaced Syrian people registered within the UNHCR up until the beginning of January, are distributed as follows:
-125,011 in Erbil (48.4%)
-83,447 in Dahuk (32.3%)
-34,210 in Sulaymaniyah (13.2%)
-2,312 in Anbar (0.9%)
-13,561 in other areas (5.3%)[3]
According to a report released in January, only US$ 10.6 million, were received against UNICEF’s Humanitarian Action for Children (HAC) appeal in Iraq, while US$ 5.5 million were carried over from 2021. UNICEF’s response to emergency-affected people in Iraq during 2022 was thus 69 per cent underfunded, with major funding gaps in WASH, Health and Nutrition and Child Protection.[4]
Qatar Red Crescent Society (QRCS) has launched an eye disease treatment and anti-blindness medical convoy at camps of displaced Iraqis and Syrian refugees in Iraqi Kurdistan.[5]
Lebanon
Since January, the number of registered Syrian refugees in Lebanon is 814,715.
Refugees in Lebanon are distributed as follows:
-318,713 in Bekaa (39.1%)
-226,508 in North Lebanon (27.8%)
-180,120 in Beirut (22.1%)
-89,374 in South Lebanon (11.0%)[6]
According to Lebanese Foreign Minister Abdallah Bou Habib, during his meeting with UN Special Coordinator for Lebanon Joanna Wronecka in Beirut, the displacement of Syrians has cost Lebanon more than $40 billion since the civil war broke out in the Arab nation in 2011. [7]
According to Lebanon’s first ever Integrated Food Security Phase Classification (IPC) Acute Food Insecurity Analysis launched by FAO and WFP around 2 million people in Lebanon, including 1.29 million Lebanese residents and 700,000 Syrian refugees, are currently facing food insecurity. The situation is expected to worsen in the coming months.
Qatar Charity continued to deliver urgent aid to Syrian refugees and underprivileged Lebanese families. This comes as part of the ‘Qatar Relief Convoys’ organized by Qatar Charity within the framework of its ‘Warm Hearts’ winter campaign.[8]
Syria
The Syria Recovery Trust Fund (SRTF) and the United Nations Development Programme in Syria (UNDP) announced the successful completion of all the activities related to the “Rehabilitation of A Pumping Station and Channels in Ar-Raqqa” joint Agriculture project.[9]
According to IHH Humanitarian Relief Foundation in a report released in January, the organization delivered 2,043 truckloads of humanitarian relief supply to war-affected Syrian residents living in the country’s IDP camps and settlements in various locations.[10]
The United Nations Security Council extended for six months, until 10 July 2023, the authorization for the UN to use the crossing point of Bab al-Hawa from Turkey to Syria for humanitarian deliveries.[11]
The SRTF announced the delivery of the fourth and final batch of vaccines for livestock under its Agriculture project, “Support for the Recovery of Livestock Production Within Northern Aleppo (Phase II)”.[12]
The SRTF announced that it has successfully completed the distribution of the planned 1,000MT of four varieties of local wheat seeds to 2,000 farmers under its Agriculture project, “Support Farmers for the Production of Wheat and Vegetable Crops in Northern Aleppo”.[13]
Cyprus
Presidential candidate Andreas Mavroyiannis discussed in an interview the problems refugees face in Cyprus. He claimed that plans to build apartment buildings, within government settlements and to grant land to self-housing settlements, were scraped. As a result, more than 80 million Euros have not been allocated.[14]
[1] The National News, Jan 19, 2023, https://www.thenationalnews.com/world/2023/01/19/syrian-refugee-aid-hit-by-pandemic-and-ukraine-war-jordan-says/
[2] China, Jan 23, 2023, http://www.china.org.cn/world/Off_the_Wire/2023-01/23/content_85071758.htm
[3] https://data2.unhcr.org/en/situations/syria/location/5
[4] OCHA, Jan 11, 2023, https://reliefweb.int/report/iraq/unicef-iraq-humanitarian-situation-report-no-3-1-july-30-september-2022
[5] OCHA, Jan 16, 2023, https://reliefweb.int/report/iraq/qrcs-launches-eye-surgery-anti-blindness-convoy-iraqi-kurdistan-enar
[6] https://data2.unhcr.org/en/situations/syria/location/71
[7] Siasat, January 24, 2023, https://www.siasat.com/syrian-refugees-cost-lebanon-over-40bn-since-2011-fm-2509446/
[8] OCHA, Jan 9, 2023, https://reliefweb.int/report/lebanon/qatar-charitys-delegation-continues-winter-aid-distribution-lebanons-refugee-camps
[9] OCHA, Jan 18, 2023, https://reliefweb.int/report/syrian-arab-republic/srtf-and-undp-syria-announce-successful-completion-all-activities-under-joint-agriculture-project-ar-raqqa
[10] OCHA, Jan 18, 2023, https://reliefweb.int/report/syrian-arab-republic/ihh-helped-700000-syrians-2022
[11] OCHA, Jan 13, 2023, https://reliefweb.int/report/syrian-arab-republic/syria-statement-high-representative-borrell-and-commissioner-lenarcic-renewal-un-security-council-resolution-cross-border-humanitarian-assistance
[12] OCHA, Jan 12, 2023, https://reliefweb.int/report/syrian-arab-republic/srtf-agriculture-project-delivers-last-batch-livestock-vaccines-northern-aleppo
[13] OCHA, Jan 11, 2023, https://reliefweb.int/report/syrian-arab-republic/srtf-agriculture-project-completes-distribution-1000-mt-wheat-seeds-farmers-northern-aleppo
[14] Cyprus Mail, January 22, 2023, https://cyprus-mail.com/2023/01/22/cyprus-problem-talks-would-begin-from-day-one-says-mavroyiannis/