Report : May 2023

With the rapprochement between Saudi Arabia and Iran continuing to have lasting effects on the region, Syria has been invited to resume in its membership within the Arab League

With the rapprochement between former rivals continuing to materialize, pieces of the Middle East puzzle are starting to fall into place. Recently Syria has been reintroduced into the family of the Arab League, after a spat that lasted several years. With the world suffering from the war in Ukraine, this step can mitigate the effects by promoting economic and political cooperation.

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 its drive to reform the economy and its conformity to the suggestions of various international partners, Egypt is moving forward in liberalizing the economy. As such, the Egyptian finance ministry announced the selling of a 9.5 percent stake in state-controlled Telecom Egypt for $122.4m as a step forward in its privatization program. According to the ministry, 162.2 million shares were sold at 23.11 Egyptian pounds ($0.75) each. Furthermore, an additional 0.5% of shares were offered until May 25 for purchase. Both sales should reduce the government’s share within the company from 80% to 70%. To manage the whole ordeal, local investment banks, CI Capital and Ahly Pharos, were managing the sale. However, there was no mention of the nationanlity of the buyers and what percentage of buyers were locals. Nevertheless, this is a good step for Egypt which is seeking to appease international partners- the IMF in particular. The International Monetary Fund has already declared its disdain towards Egypt’s investment in public assets and its spending on massive construction projects, such as the New Administrative Capital and New Alamein City, and into weapon purchases from countries like Germany and Italy. This has led to the quadruple of external debt throughout the past decade.

After benefitting from years of various inbound investment projects, and relative political stability, the country’s economic situation has been changed due to the corona pandemic and the war in Ukraine. When oil, energy, and food prices increased on a global level, the Egyptian pound devaluated from 13% earlier on, to more than 32% this year. In an attempt to slow down the inflation, top priority was given to foreign investors through a round of legislative and economic reforms. The idea is to attract a variety of foreign currencies and companies which will give a boost to the local currency. As such, amendments aim to increase the role of private companies and reduce the role of state companies in the Egyptian economy. The latest amendments include changes to a law stipulating that foreigners could not legally own more than two properties in Egypt, each in a different city. The restrictions on the number of properties they can own has now been lifted- a move that will surely liberalize the economy.

Jordan

The logo of the IMF, April 11, 2023, photo credit: Celal Güneş / Anadolu Agency

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.

The Jordanian economy continues to be on the right path. However, one issue has yet to be solved: the high unemployment. According to the IMF, structural reforms are needed to address the 22.9 per cent unemployment in the country. Although some progress has been made in this regard, more is needed to create a more dynamic private sector, attract more investment and create job-rich economic growth. Hence, promoting competition, increasing labor market flexibility, and enhancing governance and transparency, were among the recommendations delivered. Although the IMF had some concerns regarding some issues, the fund pointed out that Jordan's economy is expected to grow by 2.6 per cent in 2023, continuing a “post-pandemic recovery”. Moreover, the IMF expected inflation to be at a “moderate” 2.7 per cent for 2023, due to “an appropriate monetary policy stance”. Also, the economy is forecast to grow at 3 per- cent annually, although the global situation remains to be unknown. As for the country’s public finances, the IMF noted that a program to reduce public debt to 80 per cent of gross domestic product by 2028 from current levels of about 110 per cent, remains firmly on track. Jordanian Finance Minister Mohammad Al Ississ, after meeting with the IMF delegation, confirmed that there is serious dialogue between both parties to consider the achievements done so far and the weaknesses that still remain.

Iraq

The border between Erbil and Turkey. Photo credit: https://www.rudaw.net/

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.

With Iraq joining the United Nations TIR Convention during March, the country solidified its strategic position as a transit hub in the region. It therefore is one step closer in reinventing the economy and empowering the non-oil sector. As such, inbound investments have started to increase, albeit slowly; more companies and investors are willing to take advantage of Iraq’s improving business environment to be ahead of the competition. For instance, the Arab National Bank (ANB) will invest $38.2 million to set up “Arab Bank Iraq” after obtaining regulatory approval from the Central Bank of Iraq. The move will facilitate and support trade exchange for ANB’s customers, diversify income sources, and allow it to move into new markets. To increase its independence from oil exports, Iraq is seeking to enhance trade relations with neibouring countries. For that purpose, Erbil hosted the seventh Turkey-Iraq investment and trade summit, attending by dozens of Turkish companies, aimed at boosting trade between the countries and turning Iraq into Ankara’s second largest export destination. Iraq is also seeking better bilateral relations with Jordan to counter the proliferation of drugs in the area. As such, the Iraqi Prime Minister Mohammed Shia' al-Sudani and Jordanian Interior Minister Mazen Faraya have agreed to promote bilateral security cooperation. In this way, issues related to drugs are tackled and counter-terrorism is applied. Also, the entry of citizens into each others territory is simplified. This alone can boost trade relations between the two countries.

Lebanon

*The Lebanese pound has sunk to historic lows against the dollar (AFP file photo)*

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.

In a statement released by the World Bank, it claimed that nearly half of crisis-hit Lebanon's economy is now cash-based as trust in banks has plummeted, heightening money laundering risks and slashing hopes for recovery. In other words, the reliance of Lebanese on cash has not only increased but is preventing the country. So far, the World Bank have estimated Lebanon's cash economy to be at around $9.9 billion, or 45.7 per cent of GDP in 2022 which is a growing concern for the organization. According to the World Bank, the increasing reliance on cash transactions threatens to completely reverse the progress that Lebanon made towards enhancing its financial integrity. To make matters worse, the political elite have so far failed to address this problem. Also they seem to be protecting the central bank chief Riad Salameh who has been issued an international arrest warrant for him. As such he remains to be free with no sort of accountabiltiy and questioning of his actions what so ever. Hence, this puts a dent in international attempts to save the country. As the ultra-rich have ripped the country off over the past decades, it would seem at the moment difficult to achieve justice. Furthermore, the World Bank is also critical of Lebanon's regulators and fiscal decision makers for their ad hoc crisis management decisions, which it said undermined the development of a comprehensive recovery plan. Specifically, it pointed out the shortcomings of the Sayrafa platform, the Banque du Liban (BdL)'s primary monetary tool for stabilising the Lebanese pound. Also, it uses unfavourable monetary tools that led to short-lived appreciations of the Lebanese pound at the expense of dwindling dollar reserves.

On the regional front, there were a few developments worth noting. For instance, Saudi Ambassador to Lebanon Walid Bukhari noted there are several companies and investors of Saudi origin that are willing to invest in Lebanon. Of course, it all depends on whether Lebanon elects a new President. Similarly, Bahrain is set to restore diplomatic relations after a year-and-a-half break prompted by a spat over the conflict in Yemen. This move is set to improve relations between the two countries and is in line with the events happening in the region. Moreover, Lebanon managed to secure fuel supplies for 2 years from Iraq to fulfill its energy needs.

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

During this month, the World Bank reiterated what has been said over the past years: the Israeli restrictions on mobility, access, and trade is preventing the Palestinian economy from achieving notable results. As such, economic growth in the occupied Palestinian territories would "soften" in 2023, depriving them of the needed opportunities. In a report, World Bank Country Director for West Bank and Gaza, Stefan Emblad, said: "Exogenous sources of risks, such as in the areas of food and energy prices, mean the overall economic outlook remains bleak." The report also praised the Palestinian authority’s attempt to implement reforms by reducing the public sector wage bill. However, it did warn of the continued Israeli interventions and Palestine’s overdependence on foreign aid, are what’s preventing the Palestinian Authority from achieving significant results in the West Bank and Gaza strip. The World Bank also claimed that the Palestinian Authority (PA) must continue to advance priority reforms, in order to increase revenues, improve debt management, and enhance the sustainability of public finances. As for the organization’s country director, he stressed on the importance of the Israeli government and international donors to cooperate with the PA, to advance important reforms that would increase revenues improve debt management, and enhance the sustainability of public finances. He finally remarked that if the restrictions are not lifted Palestine will remain operating right under its true potential.

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

Once again, the month of May started with the Syrian Pound depreciating to new lows after crossing the SYP 8,000 threshold against the dollar on the parallel market. This comes during a time when foreign aid towards Syrian crisis is decreasing. According to the UNHCR and the UNDP, only 39 percent of the funding requirements for the Regional Refugee and Resilience Plan for Syria were met last year. This year’s percentage won’t be any better. Instead, it will be lower. To make matters worse, a recent leaked Iranian document shows that Syria’s debt to Iran could be as high as USD 50 billion, putting additional fiscal pressure on the country’s ability to pay back debts. As for the matter of the drug trade occurring in the region, Syria seems less able to do anything about stopping the Captagon trade on its land. This is why the Jordanian air force had to step in and carry out airstrikes over southern Syrian territory, killing an infamous drug lord and destroying a drug factory. Moreover, US sanctions are still in place on the Syria and are yet to be lifted. Instead, the US Congress has introduced, on the 11th of May a new bill to counter the normalization with Damascus and to send a clear message of its disapproval to Arab countries that have re-engaged the Syrian regime.

Although several obstacles stand in Syria’s way, there are some positive developments worth noting. For instance, French economic lobbies, despite the US and Europe’s policies towards Syria, are pushing the French presidential palace to restore ties with the regime in the hope that France will reap economic benefits. What makes this claim evident, is the recent visit by a board member of the Damascus Chamber of Commerce to Paris to discuss the possible improvement of ties. Moreover, Syria was readmitted into the Arab League more than a decade after its seat was frozen, marking a significant development in its reintegration into the Arab world. The decision will provide Damascus with a political boost and may encourage other countries in and outside of the Arab world to normalize and improve relations with Syria. On the energy front, the Ministry of Petroleum and Mineral Resource inaugurated a new gas well in the Homs governorate. Since gas is import resource used its industrial activity, the step will allow Syria either to sell the gas to neighboring countries or use it for industrial applications. Also, the Iranian President visited Syria where several agreements were signed to bolster economic and trade ties and resolve several pending issues that have hindered economic relations between the two countries for over a decade.

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.

According to a new study released by Cyprus’s central bank, the Cypriot economy is set to grow by 2.6% this year. However, such an estimation is lower than what was projected for 2022. Governor Constantinos Herodotou attributed the situation in Cyprus primarily to a decreased demand for loans because of high interest rates, as well as declines in personal consumption and investments. Despite the slower growth rate, Cyprus’s forecast scored better numbers when comparing the average growth of 1% expected in other countries that use the euro. Moreover, the country's growth is predicted to rebound to 3.1% annually in 2024 and 2025 thanks to improved domestic demand, exports and tourism revenue. Already, Cyprus’s inflation rate dropped from 10.6% in July 2022 to 3.8% in April. Therefore, it is expected that the annual inflation will drop to 3.3% and to continue falling in the next two years, reaching 2.3% and 1.9% in 2024 and 2025. According to the governor, the stabilization of food and energy prices in Europe, and the European Central Bank’s sound monetary policies, are factors that help in bringing inflation down. What is more impressive about Cyprus’s economy is its resiliency to the sanctions imposed on Russian individuals and companies that would have hurt any nation. Luckily, Cyprus’s own monetary and fiscal policies have allowed it to curb the ramifications of the sanctions.

2- The Humanitarian Situation

Egypt

The number of migrants and refugees hosted by Egypt has grown to nine million, especially after the recent crisis in Sudan, the spokesperson for the Foreign Ministry Ahmed Abu Zeid announced.[1]
Egypt’s Minister of Foreign Affairs Sameh Shoukry and UN High Commissioner for Refugees Filippo Grandi have discussed the necessity that the UNHCR mobilize the required resources to support the national efforts at the Egyptian-Sudanese border.[2]
The United Nations Central Emergency Response Fund (CERF) announced its allocation of USD 5 million (EGP 154 million) to support citizens fleeing from Sudan to Egypt.[3]

Jordan

The UNHCR states that there are currently 660,605 registered refugees in Jordan up until the beginning of May.

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

-196,853 in Amman Governorate (29.8 %)

-169,031 in Mafraq Governorate (25.6%)

-129,543 in Irbid Governorate (19.6%)

-97,845 in Zarqa Governorate (14.8%)

-17,289 in Balqa Governorate (2.6%)

-13,119 in Madaba Governorate (2%)

-8,606 in Jarash Governorate (1.3%)

-8,426 in Karak Governorate (1.3%)

-8,246 in Maan Governorate (1.2%)

-5,832 in Ajlun Governorate (0.9%)

-3,857 in Aqaba Governorate (0.6%)

-1,473 in Tafilah Governorate (0.2%)

The King Salman Humanitarian Aid and Relief Center (KSrelief) has handed over a third batch of housing allowances to 111 Syrian refugee families in Irbid, Jordan.[4]
Foreign Minister Ayman Al Safadi, in an interview with the National News Magazine, claimed that Jordan has “exceeded its capacity” to deal with Syrian refugees, although they should not be forced to return home.[5]

Iraq

The UNHCR states that there are currently 262,218 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:

-127,579 in Erbil (46.3%)

-83,858 in Dahuk (30.4%)

-34,412 in Sulaymaniyah (12.5%)

-1,504 in Anbar (0.5%)

-28, 344 in other areas (5.7%)[6]

For several days, the Iraqi army has been trying to besiege about 12,000 refugees inside Makhmour camp, located in Nineveh Governorate, Iraq, by digging trenches and placing barbed wire.
Several lawmakers, human rights activists, and international organizations have condemned Iraq’s as against international law and human rights. [7]

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%)[8]

The Lebanese government has come under heavy criticism from activists and rights groups amid reports of Syrian refugees being detained and deported back to the war-torn nation.[9]
The World Bank Group’s Board of Executive Directors approved today a US$300 million additional financing to the Emergency Crisis and COVID-19 Response Social Safety Net Project (ESSN). The additional financing will expand and extend the provision of cash transfers to poor and vulnerable Lebanese households and further support the development of a unified social safety net delivery system in Lebanon to allow a better response to ongoing and future shocks.[10]
The World Food Programme, with the support of Japan, provided food parcels for 280,000 Lebanese families. [11]
Italy contributed EUR 2 million to support the most vulnerable Palestine Refugees in Lebanon.[12]
The U.N. during May announced the suspension of a decision to disburse U.S. dollar cash assistance to Syrian refugees in Lebanon, after the move created an uproar in the country.[13]

Syria

The European Union (EU) has contributed €5 million in humanitarian funding towards UNICEF’s support for delivering emergency cash assistance to earthquake-affected families in Syria.[14]
Save the Children released a statement in which it warned about the ramifications of the earthquake on 665,000 children who are vulnerable to hunger and stunted growth.[15]
A direct Relief-chartered 747 cargo plane departed Los Angeles for Adana, Turkey, carrying 69 tons of medicine and medical supplies for people in northern Syria recovering from February's devastating earthquakes.[16]
In a collaborative effort to support Syrian refugees and displaced individuals, QFFD and AFAD laid the foundation stone for the integrated city in northern Syria, to support Syrian refugees and displaced persons.[17]
The SRTF announced the completion of the loan disbursement process, benefiting a total of 1,299 new borrowers, under its Livelihoods intervention “Establishment of Revolving Fund to Support Livelihoods Recovery in Northeast of Syria – Phase II”, as well as the completion of all activities under the intervention.[18]

Cyprus

Germany reached an agreement with Cyprus over the transfer of 900 refugees from Cyprus to its territory.[19]

MECC Communication and Public Relations Department

[1] https://www.egyptindependent.com/egypt-hosts-9-million-refugees-and-migrants-fm/

[2] Egypt Today, May 26, 2023, https://www.egypttoday.com/Article/1/124657/Egypt-UNHCR-discuss-mobilizing-resources-to-back-national-aid-efforts

[3]Egyptian Streets, May 23, 2023, https://egyptianstreets.com/2023/05/23/un-allocates-usd-5-million-to-sudanese-refugees-fleeing-to-egypt/

[4] Arab News, May 26, 2023, https://www.arabnews.com/node/2310511/saudi-arabia

[5] The National News, May 23, 2023, https://www.thenationalnews.com/mena/2023/05/23/jordan-has-exceeded-its-capacity-for-refugees-says-foreign-minister/

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

[7] Hawar News, May 26, 2023, https://www.hawarnews.com/en/haber/jurists-iraqi-government-violates-1951-1967-conventions-for-protecting-refugees-h36454.html

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

[9] Aljazeera, May 3, 2023, https://www.aljazeera.com/news/2023/5/3/state-of-terror-hangs-over-syrians-in-lebanon-amid-deportations

[10] OCHA, May 25, 2023, https://reliefweb.int/report/lebanon/us300-million-scale-support-poor-and-vulnerable-lebanese-households-and-strengthen-social-safety-net-delivery-system

[11] OCHA, https://reliefweb.int/report/lebanon/lebanon-families-receive-critical-foods-thanks-japan

[12] OCHA, May 23, 2023, https://reliefweb.int/report/lebanon/italy-contributes-eur-2-million-support-most-vulnerable-palestine-refugees-lebanon

[13] Naharnet, May 27, 2023, https://www.naharnet.com/stories/en/297874-un-suspends-usd-aid-to-syrian-refugees-in-lebanon-after-uproar

[14] OCHA, April 27, 2023, https://reliefweb.int/report/syrian-arab-republic/european-union-contributes-eu5-million-support-earthquake-affected-children-and-families-syria

[15] OCHA, May 17, 2023, https://reliefweb.int/report/syrian-arab-republic/child-stunting-syria-could-reach-levels-never-seen-earthquakes-threaten-push-665000-people-hunger

[16] OCHA, May 5, 2023, https://reliefweb.int/report/syrian-arab-republic/sixty-nine-tons-humanitarian-medical-aid-en-route-syria

[17] OCHA, May 27, 2023, https://reliefweb.int/report/syrian-arab-republic/qatar-fund-development-qffd-and-turkish-disaster-and-emergency-management-authority-afad-laid-foundation-stone-project-establish-integrated-city-northern-syria

[18] OCHA, May 21, 2023, https://reliefweb.int/report/syrian-arab-republic/srtf-announces-completion-loan-disbursements-and-all-activities-under-phase-ii-livelihoods-intervention-northeast-syria

[19] Info Migrants, May 26, 2023, https://www.infomigrants.net/en/post/49212/germany-to-take-in-up-to-900-additional-refugees-from-cyprus

Falling Into Place

Report : May 2023

1- The Socio-Economic Situation

Egypt

Jordan

Iraq

Lebanon

Palestine

Syria

Cyprus

2- The Humanitarian Situation

Egypt

Jordan

Iraq

Lebanon

Syria

Cyprus

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