Report: July 2023

*As the Middle East’s economy shows signs of improvement, regional and major powers are competing for the region using any means possible. Photo credit: Al Arabiya.*

Introduction

The Middle East has been showing signs of economic improvement despite the economic slowdown everywhere else in the world. This has enticed regional and international players to delve deeper into the ME, using diplomatic, military, and economic means. Unfortunately, this has prompted tensions to rise across the region as world powers compete over who gets what. As such, the following question comes to mind: Will the ME be more divided as a result of the ambitions of global powers?

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.

Experts have sounded the alarm over the increasing inflation which the government is failing to curb. In one month, inflation increased from 40.3% in May to 41% in June, due to the increase in prices, the depreciation of the currency, and the shortage of US dollars. According to them, Egypt’s inflation problem only became worse by the Ukraine- Russia war and is not the direct product of the conflict. The armed escalation only exacerbated the severity of the situation and highlighted cracks in Egypt’s economy. Throughout the years, the government has succeeded in attracting billions of dollars in investment and therefore has succeeded in shoring up the economy. However, Egypt’s complicated bureacratic structures, red tape, central decision making, and the interference between several public domains, have made it difficult for the government to step up its effort to rejuvinate the economy. In many cases, investors either pulled out from the Egyptian market or refused to invest in the first place. For instance, the public offering program on stock exchange is witnessing a great slow down in number of investors, due to the outdated investment law which has over-complicated the process of buying shares. This alone has scared potential investors who view this bureaucracy as unnecessary and can hinder their future plans or activities in expanding in other avenues of the economy.

Despite the above situation, Egypt has demonstrated commitment to resove the situation it is in. After all, leaders are trying to prevent the country from descending into civil strife and public demonstrations, as it has happened in Lebanon. One indicator that Egypt is moving ahead in the reform process is its recent sale of govenrment assets worth 1.9 billion dollars. What’s even more impressive is the willingness of the government to sell assets which have been long under the control of the military. As such, imposing limitations on the armed forces, which is reveered by the curent leadership as a tool of maintaining control, is a beneficial step to free the economy from rigid bureaucracy. It also signifies a change in mentality to adapt to the current international economic crisis. Another indicator is government’s willingness to ammend the investment law through a series of internal meetings and conferences. Hopefully through these steps, the government will be able to cultivate the private sector.

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.

Despite the World Bank downgrading Jordan to the status of lower-middle-income country in a recent revision of its classification data, its government is continuing to make progress in terms of attracting or creating new investment opportunities. For instance, a Jordanian- Japanese business forum was launched in Amman reflecting the fruitful collaboration between the two countries. The event aimed to highlight investment opportunities within Jordan. As such sectors which the Jordan Economic Modernisation Vision deems imperative to invest in, were presented. Japanese State Minister of Economy, Trade and Industry confirmed the willingness of his country to go ahead in deepening economic cooperation with Jordan to foster development and strenghten relations between the two countries. Jordan is also seeking to expand ties with neighboring countries to assist in the development of the region. That’s why a delegation of 45 buisness men arrived in Palestine to boost bilateral trade and investment. It is said that the expansion of ties will have positive ramifications specially for Jordan. Another step which aims to shore up Jordan’s economy, is the reception of Syrian investors that wish to transfer their financial assets to the Kingdom. The Ministry of Investment emphasized that all incoming investment, whether they are spread out across various sectors or focused on projects such as "Tourism and Entertainment City" project will play a significant role in modernizing the country. With relationships improving among Middle East nations, investment opportunity in such a collaborative environment will prove very useful for Jordan.

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.

With investment opportunites increasing in Iraq, leaders are attempting to market the country as an attractive destination for several international companies. One method Iraqi leaders employ is linking up with business communities from each country to build strong relationships and encourage them to invest within Iraq. Similarly, the country’s foreign minister Fuad Husain is working on strenghtening ties with other countries at an official level so that foreign governments can entise their own citizens to invest in Iraq. “We are now in a different stage” the FM confidently claimed as he spoke during a conference. Since the beginning of the year, Iraq has been successful in attracting new projects, especially from other GCC countries. However, what really gave confidence to other investors to follow suit, is the Total Energies project worth 10 billion dollars which will begin very soon. This is of significant importance and marks a shift as big Western international oil companies had been drifting away from Iraq, because of the country's tough fiscal terms, better opportunities elsewhere and shifting investment priorities. Total’s move will cultivate confidence among other companies especially when part of the project will involve improving electricity infratructure. Combined with other energy-related projects by Qatar and Saudi Arabia, the business environment is set to improve in the coming future as more and more companies will race to secure a stake in a stabilizing country by implementing projects which will improve the infrastructure of the country. As such, the stabilization of the political and security situation, as well as a windfall from higher global oil prices, promise to provide Iraq with some breathing space to evolve the country.

Lebanon

*IMF reforms discussed with Lebanese leaders have yet to be implemented. Photo credit: Reuters.*

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

Confirmed cases: 1,238,552

Deaths: 10,936

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

During this month, Lebanon witnessed an increase in incoming expats wishing to spend their hard-earned money from working abroad. This represents a great opportunity for small and medium businesses to make some profit and improve the overall status of the economy. The National News Magazine conducted a study on Lebanon and deduced that business conditions in Lebanon’s private sector has hit a 10-year high in June despite the economic and political situation. The country’s Blom purchasing managers’ index, a measure of the strength of its private sector rose to 50.2 in June from 49.4 in May. This is the first improvement in the health of the private sector since August 2022, as new employment and business activities registered expansion. Despite the positive remarks the IMF is still not impressed by the developments. According to the international organization, there is still a lack of policy action and an abundance of vested interests thus impeding any reforms in the economy. Without reforms, public debt could reach 547 percent of GDP by 2027, according to Article IV of its report. What makes the situation even more problamatic is the existence of a status quo which presents the largest risk to Lebanon’s economic and social stability, taking the country down an unpredictable road. The IMF ended its report byt stating that the reform measures Lebanon had attempted so far, including the 2022 budget, a banking secrecy law and a draft capital controls law, fell short of the advice given to authorities by IMF staff or the expectations discussed. In the end, the IMF representatives were not much surprised by Lebanese leaders’ lack of seriousness or commitment to reform. After all, simpler tasks such as selecting a new President are not being fulfilled.

Palestine

*Residents of the Jenin refugee camp fled their homes as the Israeli military pressed ahead with a siege on the area, in Jenin, West Bank, Tuesday, July 4, 2023 [Majdi Mohammed/AP Photo]*

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

Following the military escalation in Jenin and the victims which have fallen, the international community condemned Israel for the grave violation of human rights. President of the PA, Mahmoud Abbas, in a plea for help asked for assistance amid Israel’s activities. However, that did not stop the aggressor from carrying out raids that left people dead. This demonstrates an inability of the Israeli occupation to compromise for the sake of promoting peace. Instead, it bullies weak communities knowing that they do not have the capability to defend themselves. Israeli practices are the same when it comes to Palestine’s economy which is heavily regulated. Israel controls what enters or exits the country and in many cases throughout the past two decades, it has imposed harsh restrictions that only aim to perturb ordinary Palestinian citizens. Nowadays, despite public outcry about the topic, Israel continues to violate every human right without taking into the consideration the long term damage it is doing and the radicalized mindsets it is inadvertently nurturing. Meanwhile, the bulk of the investments are pouring into Israeli-held territories instead of being used to build Palestine and to provide jobs to its ailing population. Instead, they are being used to build up Israel’s resources which it won’t share with its Palestinian neighbors. In short, Palestine only gets crumbs of aid while Israel receives substantial amounts of funds that made its economy more resilient than the Palestinian one.

Syria

*A street view from Damascus. Photo credit: New York Times.*

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

Although armed confrontations have significantly decreased throughout Syria, the economy remains to be in tatters. In a new study done by the Syrian government, it revealed that cost of living in the country has increased by 88% in one month. This is the result of compounding inflation and the inability of the Syrian industry to produce enough products for domestic use. As such, poverty is constantly on the rise in Syria as more and more people are no longer able to withstand deplorable work conditions and the inadequate economy. To make issues worse, the events in Ukraine surrounding the mutiny of Wagner’s Prigozhin, have impacted the production of oil and gas in Syria. This is due to the fact Russia’s Wagner is situated near oil and gas assets in Syria. As such, disruption in energy production has only increased the severity of the inflation. Meanwhile, the United States is attempting to crackdown on the Captagon problem by creating legislation that would place severe sanctions on individuals linked with the drug trade. Such people are usually influential business men that are deeply embedded within the Syrian economy. If their operations are harmed, it is expected that the economy will further deteriorate. Likewise, the economic situation has caused the further depreciation of the Syrian Pound. Government employees, who are on a fixed salary in Syrian Pounds, are unable to cover the needs of an average Syrian household. Even the NGO or humanitarian actors sector have decreased their contracts with local suppliers due to donor fatigue.

Despite the calamity surrounding the Syrian crisis, there are some positive developments worth noting. From one end, a private Switzerland-based company specializing in the disposal of landmines and other explosive hazards recently registered a branch in Damascus, one of the very few Western companies to enter Syria since 2011. This signals to future investors that Syria is on the road to a more secure country. In an attempt to liberalize the economy, the Syrian government declared that it had signed a contract with an unknown company to handle operations and investments at Damascus’s airport. On the energy front oil imports from Iran have increased to satisfy growing domestic needs. With its close partnership with Iran and its improving relations with Iraq, energy security is improving within the country. As Syria continues to get closer with Easter nations especially China and Russia, it is applying to join BRICS in hopes that its entry would lessen its dependence on the U.S. dollar, facilitate investments in the country, and allow it to bypass sanctions. Similarly, Syria welcomed a business delegation from Oman wishing to invest in Syria. This represents an important step as over the past decade tie between the two countries have been severed.

Cyprus

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

According to the Statistical Service of Cyprus, the country experienced a 22.7% surge in tourism arrivals in June 2023 compared to the same month last year, in a significant boost to Cyprus’s tourism sector. The service revealed that a total of 456,985 visitors arrived to the island in June, easily surpassing the 372,324 arrivals recorded in June 2022. With the great economic developments Cyprus has been achieving throughout the past 3 years, this is a strong push for the country and its private sector which awaits summer period to make a profit. Not only Cyprus is reaping the rewards its tourism sector is generating, the government is attempting to also attract investments from other countries. As such, it passed a law that fast-tracks ‘strategic investments’ and regulates licensing procedures and timeframes. According to Marios Tannousis, the Director General of Invest Cyprus, the new legislation introduces streamlined procedures to facilitate the licensing of strategic investments. The purpose of this move is to attract more prospective investors who have been discouraged by red tape and bureaucratic issues. Unlike other countries in the area, Cyprus has the administrative capability to implement such reforms due to proper legislation and decreased corruption. With new developments are continuously shaping Cyprus’s economy, the expected GDP for the coming years will surely be re-modified.

3. THE HUMANITARIAN SITUATION

Egypt

• According to Middle East Monitor, Sudanese refugees in Cairo are struggling to pay their rent as landlords are taking advantage of the number of people who need accommodation.[1]

• The new visa regulations imposed on Sudanese refugees has prevented many from seeking asylum.[2]

Jordan

The UNHCR states that there are currently 659,457 registered refugees in Jordan up until the beginning of July.

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

196,229 in Amman Governorate (29.8 %)
169,116 in Mafraq Governorate (25.6%)
129,384 in Irbid Governorate (19.6%)
97,651 in Zarqa Governorate (14.8%)
17153 in Balqa Governorate (2.6%)
13,084 in Madaba Governorate (2%)
8,555 in Jarash Governorate (1.3%)
8,374 in Karak Governorate (1.3%)
8,274 in Maan Governorate (1.2%)
5,816 in Ajlun Governorate (0.9%)
3,845 in Aqaba Governorate (0.6%)
1,433 in Tafilah Governorate (0.2%)

• An unprecedented funding crisis is forcing WFP to significantly scale back its monthly food assistance for the 465,000 refugees it supports in Jordan. Starting in August, WFP will gradually prioritize the poorest families, excluding approximately 50,000 individuals from the assistance, in order to stretch the limited available funding. [3]

• 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, improving energy efficiency and strengthening the drought management system. [4]

Iraq

The UNHCR states that there are currently 292,580 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:

137,857 in Erbil (47.1%)
73,902 in Dahuk (25.3%)
38,527 in Sulaymaniyah (13.2%)
18,186 in Ninewa (6.2%)
14,444 in Baghdad (4.9%)
1,961 in Kirkuk (0.7%)
1,557 in Anbar (0.5%)
6146 in other areas (1.9%)[5]
Iraqi security forces have arrested 70 Syrian Kurdish refugees in Baghdad and a number of others in Mosul. They now fear they will be handed over to Damascus after three Syrian Kurds were handed over to Syria. [6]

• Essential medical activities have been suspended at two health facilities run by Médecins Sans Frontières (MSF) in the Iraqi city of Mosul after stocks of medicines and supplies ran critically low.[7]

Lebanon

Since the beginning of July, the number of registered Syrian refugees in Lebanon is 795,322.

Refugees in Lebanon are distributed as follows:

305,921 in Bekaa (38.5%)
222,788 in North Lebanon (28.0%)
177,374 in Beirut (22.3%)
89,239 in South Lebanon (11.2%)[8]

• 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.[9]

• Lebanon has come under scrutiny of various human rights organizations for deporting Syrian refugees. The forcibly returned are viewed with suspicion by Syrian authorities and face a multitude of threats and abuses upon their return, rights groups point out.[10]

• Lebanese officials have voiced their disdain in response to the decision by the European Parliament in support of keeping refugees in Lebanon. [11]

• The Minister of Social Affairs Hector Hajjar and Minister of the Displaced Issam Sharafeddine visited Damascus to meet with their Syrian counterparts over the repatriation of the Syrian refugees. [12]

Syria

• Hundreds of NGOs and humanitarian actors expressed their outrage over the failure of the security council to renew a cross-border aid into Northern Syria, as many lives are put under risk.[13]

• Qatar Charity continued to implement the wheat value chain support project, which is a pioneering project in its field and the first of its kind in northern Syria, given its comprehensiveness in supporting the value chain, starting with the provision of agricultural inputs, and ending with the provision of bread for the local community, through marketing.[14]

• The UN Independent International Commission of Inquiry on Syria has released a new report entitled “No End in Sight: Torture and ill-treatment in the Syrian Arab Republic 2020-2023”. It covers the continuing widespread and systematic patterns of torture and ill-treatment, including enforced disappearances, in detention facilities in Syria.[15]

• The UN Special Rapporteur on the human rights to safe drinking water and sanitation, Pedro Arrojo-Agudo, was compelled to cancel his visit to the Syrian Arab Republic set to begin on 9 July, citing a lack of full cooperation by the Government.[16]

• An official delegation from Qatar Red Crescent Society (QRCS) has visited Aleppo countryside in northern Syria, to inspect and open some humanitarian projects constructed by QRCS and partners for internally displaced people.[17]

Cyprus

• Cyprus authorities have detained a vessel carrying 23 people off the coast. Meanwhile, the government has voiced its concern about the increasing number of refugees taking refuge in the country.[18]

[1] Middle East Monitor, July 17, 2023, https://www.middleeastmonitor.com/20230717-sudan-refugees-in-cairo-struggle-to-pay-rent-after-landlords-raise-price/

[2] HRW, July 13, 2023, https://www.hrw.org/news/2023/07/13/egypt-civilians-fleeing-sudan-conflict-turned-away

[3] OCHA, July 14, 2023, https://reliefweb.int/report/jordan/funding-crunch-forces-wfp-scale-back-food-assistance-refugees-jordan

[4] 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

[5] https://data2.unhcr.org/en/situations/syria/location/5
[6] Kurdistan 24, July 18, 2023, https://www.kurdistan24.net/en/story/31976-Iraqi-security-forces-arrest-70-Syrian-Kurdish-refugees

[7] OCHA, July 5, 2023, https://reliefweb.int/report/iraq/msf-halts-medical-activities-mosul-due-administrative-obstacles

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

[9] OCHA, June 29, 2023, https://reliefweb.int/report/lebanon/new-world-bank-program-provides-lifeline-lebanons-poor-bolstering-sustainable-food-systems-enar

[10] Info Migrants, July 3, 2023,https://www.infomigrants.net/en/post/50027/lebanon-under-scrutiny-for-deporting-syrian-refugees

[11] LBC, July 16, 2023, https://www.lbcgroup.tv/news/news-bulletin-reports/713642/lebanese-officials-react-to-european-parliaments-d/en

[12] Nahar Net, July 18, 2023, https://www.naharnet.com/stories/en/299020-ministerial-delegation-to-visit-syria-over-refugee-repatriation

[13] OCHA, July 13, 2023, https://reliefweb.int/report/syrian-arab-republic/syria-failure-renew-un-cross-border-resolution-puts-many-lives-risk

[14] OCHA, July 13, 2023, https://reliefweb.int/report/syrian-arab-republic/qatar-charity-continues-implement-supporting-wheat-value-chain-project-northern-syria

[15] OCHA, July 12, 2023, https://reliefweb.int/report/syrian-arab-republic/no-end-sight-torture-and-ill-treatment-syrian-arab-republic-2020-2023-independent-international-commission-inquiry-syrian-arab-republic-ahrc53crp5

[16] OCHA, Relief Web, July 11, 2023, https://reliefweb.int/report/syrian-arab-republic/un-expert-cancels-visit-syria-due-lack-full-cooperation

[17] OCHA, July 8, 2023, https://reliefweb.int/report/syrian-arab-republic/qrcs-opens-residential-villages-idps-northern-syria-enar

[18] Vatican News, July 16, 2023, https://www.vaticannews.va/en/world/news/2023-07/cyprus-coastguard-arrest-migrant-boat-captain-17-years-old.html

Healthy Competition or Rising Tensions?

Report: July 2023

Introduction

THE SOCIO-ECONOMIC SITUATION

Egypt

Jordan

Iraq

Lebanon

Palestine

Syria

Cyprus

3. THE HUMANITARIAN SITUATION

Egypt

Jordan

Iraq

Lebanon

Syria

Cyprus

Third Year Commemoration of the 4 August Blast

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