A Prelude to Further Displacement
Middle East Socioeconomic Overview
Report: March 2024
A picture of Rafah after an airstrike. Photo credit: https://www.nna-leb.gov.lb/
Introduction
Although the occupant force has yet to officially launch an operation on Rafah and therefore send ground forces, airstrikes that are killing innocent women and children are already being reported. This alone is an indicator that they may be not shying away from the future operation which is being fully prepared for. Despite diplomatic efforts by countries from all the world to establish a cease fire that will allow humanitarian assistance to make its way to civilians, the occupation entity claims that would give their enemies a chance to regroup. For the time being, much of international community is worried about escalation in Rafah as it will lead to a bigger humanitarian catastrophe.
2. THE SOCIO-ECONOMIC SITUATION
Egypt
European Commission President Ursula von der Leyen, right, and Egypt's President Abdel Fattah el-Sisi [File: Francois Walschaerts/AP]
According to Capital Economics, Egypt’s inflation rate for March is expected to increase to 38%, showing more signs of trouble, as Egypt’s economy continues to show more signs of trouble. For this reason, members of the international community are intervening by allocating aid packages to stabilize the situation, especially when a wave of refugees is expected to impact the country in the coming months following an anticipated operation on the city of Rafah. As such, the United Arab Emirates declared that it is preparing to inject $35 billion into the country over two months, to address Egypt’s severe currency crisis. Most of the funds will be allocated for the development of Ras El-Hikma, a 170-million-square-meter peninsula, stretching over some 50 kilometers of white-sand beaches. As for the EU, it has announced a 7.4 billion Euros aid package and its intention to deepen its relationship with the country as part of a deal to decrease migrant flows to Europe. Mentioned in the aid package are both grants and loans whose life is three years. As for its intention to deepen ties with Egypt, officials claimed that the EU is aiming to upgrade the EU’s relationship with the Arab world’s most populous country to a “strategic partnership”. El Sisi’s office commented on both Arab and European declerations as “a significant leap in cooperation and coordination between the two sides and to achieve common interests”. At a time when Egypt is struggeling with debts estimated at over $160 billion and facing its worst liquidity crisis in decades and the unrest in the Red Sea and falling revenues from the Suez Canal, these declerations are a breath of fresh air for the Egyptian government.
Despite all of the aid and investments descending upon Egypt, skepticism still prevails over the country’s economy. According to the head of the sovereign funds sector for the Middle East and Africa at Fitch, the huge cash flows witnessed by Egypt, the devaluation of the currency exchange rate, and the raising of interest rates are not sufficient to upgrade the country’s credit rating. As such, it will remain at a B- rating when it was lowered in November. He also added If the exchange rate is not allowed to move flexibly, and if inflation remains high, the gains of the past few weeks could be quickly eroded as happened after the 2016 exchange rate devaluation. Therefore, he claimed that it is imperative that the Egyptian government to proceed with reforms so that Fitch can reconsider modifying the credit rating. Afterall, it is a much needed factor to increase the size of investment and likewise, to quench the country’s thirst for foreign currency.
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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 516,023
Deaths: 24,613
Recovered: 442,182
Jordan
In a new report titled “The Economic Consequences of Conflicts” the International Monetary Fund warned of the impact of the war on Gaza on activity and earnings of neighboring Jordan. The report pointed to the negative repercussions of the conflict on tourism-related sectors, which led to a decline in investment and a slowdown in regional demand for imports. The current account deficit is expected to decline less than previously expected, to reach 6.3% of GDP, as a result of the decline in travel revenues and the high cost of energy imports.. At the same time, the International Monetary Fund statistics show that the conflict has negatively affected the tourism sector, and despite the return of hotel and flight indicators in the region before October 2023 to 2019 levels, trends in hotel room occupancy rates after the outbreak of the conflict recorded a sharp decline in Jordan for the year 2023 compared to the same period in the previous year. The IMF also cautioned that as things escalate recorded figures will dwindle even further. In turn, Minister of Tourism Makram Al-Qaisi indicated earlier that hotel reservations in Jordan have declined by 50% since the start of the war on Gaza, indicating that demand for tourist sites has declined by 40% since the start of the war, in addition to a decrease in the percentage of reservations for tourist restaurants by 60 to 70%. Despite the cooperation between the private sector and the Tourism Promotion Authority to promote Jordanian tourism abroad, the efforts were of no use because Jordan became classified as a risky country [MA1] due to the war conditions, especially to European and American markets.
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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 1,746,997
Deaths: 14,122
Recovered: 1,731,007
Iraq
The month started with the IMF warning of greater cuts in oil prices or an extension of OPEC+ cuts, as they have occurred during the month, may affect Iraq's finances. It insisted that Iraq needs to increase non-oil exports and government revenues thereby reducing the economy's exposure to oil price shocks. The Fund stated that its estimates indicate that the non-oil sector in Iraq will record a real growth of 6% in 2023 and called on the Iraqi government to implement ambitious measures to control public finances, which it indicated had turned into recording a deficit of 1.3% of the gross domestic product last year. In the final statement of the 2024 Article IV consultation mission, the Fund expected that the increase in spending would push the price of a barrel of oil required to achieve financial equilibrium to above $90 this year. The Fund asked the Iraqi authorities for a number of reforms, including “enabling the private sector to develop and grow, modernizing the financial sector, restructuring state-owned banks, reforming the retirement and electricity sectors, and continuing to make the necessary efforts to improve governance and reduce corruption.
Despite the IMF’s warnings, Iraq has been achieving some significant gains such as achieving self-sufficiency and does not need imports for the purposes of the ration card and securing strategic reserves. Moreover, the country delcared that its long time problem concerning water scaricity has been mitigated as the water situation has improved at dams and reservoirs, and neigboring countries have been consistently supplying Iraq with water. Additionaly, Iraq recently signed a bilateral agreement which will pave the way for increasing cooperation in security and economy with Turkey.
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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 2,465,545
Deaths: 25,375
Recovered: 2,439,497
Lebanon
During the period of Ramadan, friction along the border continued. In addition to artillery shells and airstrikes, white phosphorous rounds are still being dropped at locations used to grow crops. As a result, the total land area affected by fires due to shelling in southern Lebanon reached 1,897 hectares. According to the Food and Agriculture Organization, 63 per cent of farmers were unable to easily access their fields, with 26 per cent forced to entirely abandon their agricultural lands due to displacement. Furthermore, 23 per cent of farmers experienced a decrease in their harvest yields. Additionally, 85 per cent of farming households encountered difficulties in transporting their agricultural products. In total, 72 per cent of farmers reported losses in their income. The malicious intent of the aggressor is not merely to deter or suppress attacks coming from Lebanon, but to punish and maim, just as it has been doing in Gaza. The occupiers know that Lebanon’s southern economy is crippled by the conflict and intends to do long term damage so that Lebanon can feel the damage for years to come. As for those displaced Lebanon has recorded 90,496 internally displaced persons, thus putting strain on areas such as Sour, El Nabatieh, Saida, Baabda, and Beirut where they have displaced to. Unfortunately, nearly 60,000 civilians remain in the conflict-affected areas where security challenges have also led to the closure of approximately 50 public schools, including eight technical and vocational education and training public schools, thus paralyzing the education sector. As the south is being crippled day by day, the rest of the country is beginning to witness other hostile actions. In addition to the airstrikes in the Bekaa area, Beirut’s airport is being jammed by the Israeli Occupying Force thus putting the safety of planes and their passengers in dangers. This news alone is causing anxiety among incoming and outbound travelers that will further degrade economic activity.
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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 1,243,838
Deaths: 10,952
Recovered: 1,087,587
Palestine
The occupation aggression against Gaza since October 7 has continued to cast a shadow over the Palestinian economy, whose markets provide basic goods at reasonable prices compared to previous years. As such, the purchasing power of Palestinian citizens has declined significantly by 50-60%, which negatively affected the Palestinian economy, which has been exposed to one of the largest shocks recorded in modern economic history, according to what was published by the World Bank. To put it in numbers, Palestine lost 11 billion shekels since the start of the war, which had been flowing to the Palestinian market from the purchasing activity of workers in the occupied territories. This lead to a decrease in the income of the Palestinian employee by 35 percent, coinciding with a fluctuating rise in the prices of some goods due to the rise in transportation costs. With rampant unemployment and decrease in purchasing power, the Palestinian economy inevitably felt the brunt of these developments. What’s more, the money supply recorded a noticeable decline reaching $21 billion. This decline was driven by a decrease in cash in circulation as a result of the war. Also, 56 of the 245 bank branches in Gaza were completely or partially damaged, with their banking services completely halted. As for the industrial sector, the Palestinian Central Bureau of Statistics said that the Palestinian economy incurred production losses estimated at $2.3 billion, equivalent to about $19 million per day. This is due the fact, most establishments in the Gaza Strip have stopped practicing their economic activity as a result of partial or total destruction. The total number of establishments that have stopped production or whose production has declined is more than 80 thousand.
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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 621,008
Deaths: 5,404
Recovered: 615,445
Syria
As the conflict in Syria enters its 14th year, humanitarian needs have reached unprecedented levels due to the ongoing hostilities, the destroyed economy, and increase donor shortage. According to the International Rescue Committee 85% of Syrians in northern Syria surveyed by the IRC are in debt of which more than 90% can't repay it. Moreover, 60% of the population buy food on credit and therefore site that food or money for food as their household's greatest unmet need. To make matters worse, child labor has been observed to increase in several markets in the north. As for Syria as whole, 16.7 million people will need humanitarian assistance across Syria, up from 15.3 million in 2023, according to the UN Office for the Coordination of Humanitarian Affairs (UNOCHA). According to Paulo Pinheiro, Chair of the Independent International Commission of Inquiry on the Syrian Arab Republic, fighting has escalated in Syria since the events of October 7 and the war in Gaza, forcing worse socioeconomic and humanitarian conditions which were quite evident during the period of Ramadan in which the average Syrian’s purchasing power evidently decreased. Compounded by the currency crisis, increasing inflation, and high level of unemployment, citizens found it unable to celebrate the holiday as they normally did.
On the plus side, Syria did score some positive developments as its bilateral ties are improving and some instances of economic activity is being noted. From one end, it has received assurance from an Indian delegation that India will step up economic activity between the two countries. Similarly, a parliamentary and ministerial delegation from the Benghazi-based Libyan government met with Syrian officials in Damascus. The two-day visit aimed to enhance political and business relations. Moreover, Syrian Foreign Minister Faisal Al-Miqdad visited Saudi Foreign Minister Prince Faisal bin Farhan bin Abdullah at the Ministry’s headquarters in Riyadh. During the reception, various aspects of bilateral relations and ways to advance and strengthen them were discussed, in addition to discussing developments and topics of common interest. As for the country’s economic activity round thirty Syrian entities linked to the electronic payment services field, namely banks, telecommunication companies and software companies, gathered in Aleppo to attend the First Conference and Exhibition for Electronic Payment in Syria. The conference, a first in Syria, was organized by the Syrian Computer Society, the Central Bank of Syria, and the Thiqa Company for Exhibitions and Conference. Also, Syria’s President Bashar Al-Assad signed a law whose purpose is to merge the two state-owned textile organizations, the General Organization for Cotton Ginning and Marketing and the General Organization for Textile Industry – to establish the General Company for Textile Industry. The aim of the merger into a single entity is to cut costs, modernize management techniques and improve the flexibility in production, contracting and trade operations.
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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 57,743
Deaths: 3,165
Recovered: 54,578
Cyprus
During March, the European Commission released a report detailing that Cyprus is on a sound footing due to solid economic growth and declining inflation. Yet, it mentioned that its integration with EU economies and foreign countries may pose risk to its trade. Similarly, Morningstar DBRS gave a stable ‘BBB’ rating for Cyprus indicating the island’s strong economic growth and warned the island remains exposed to geopolitical shocks. Statements by both entities were issued based on the fact headline inflation started to moderate in 2023, dropping to 3.9%. In 2024 and 2025, inflation is expected to continue declining. Also they judged the country’s labor market which remains robust, and employment continuing to increase and unemployment expected to fall below 6% by 2025, its lowest level in over a decade. Also, Cyprus’s dependency on the UK, Greece, and Italy for goods, services, and export which can add volatility to the situation pushed the EU and Morningstar DBRS to make this realization. Regarding external demand, the reports noted that the majority of the Cypriot economy’s total value added is contributed to meeting domestic demand in Germany, the USA, and China, which can vary.
For the time being, there are positive expectation regarding the trajectory of the economy, as economic growth is expected to rebound again in 2024 and 2025, reaching approximately 3 per cent. All of this is thanks to significant planned investments in energy, education, healthcare, and tourism, partly supported by the National Recovery and Resilience Plan.
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According to the WHO, Corona cases, deaths, and vaccinations are reported as follows:
Confirmed cases: 681,110
Deaths: 1,365
Recovered: 546,203
4. THE HUMANITARIAN SITUATION
Egypt
· UNHCR Egypt newly registered 39,353 refugees and asylum-seekers of all nationalities, the highest monthly number since the start of the Sudan crisis and a nearly 10-fold increase compared to pre-crisis levels.[1]
· The World Health Organization and Japan signed an 8 million USD agreement to provide essential support for critically ill patients evacuated from the Gaza Strip to Egypt for medical treatment.[2]
Jordan
The UNHCR states that there are currently 713,653 registered refugees in Jordan up until the beginning of March.
The proportion of Syrian displaced people registered within the UNHCR for the beginning of March, are distributed as follows:
191,700 in Amman Governorate (30.0 %)
162,751 in Mafraq Governorate (25.4%)
126,524 in Irbid Governorate (19.8%)
93,473 in Zarqa Governorate (14.6%)
16,528 in Balqa Governorate (2.6%)
12,685 in Madaba Governorate (2%)
8,317 in Jarash Governorate (1.3%)
8,180 in Karak Governorate (1.3%)
8,079 in Maan Governorate (1.3%)
5,623 in Ajlun Governorate (0.9%)
3,780 in Aqaba Governorate (0.6%)
1,400 in Tafilah Governorate (0.2%)
512 in other (0.1%)
· With more than USD 1.7 million in funding from the Government of Japan, UNOPS delivered 92 renal dialysis units, 28 patient monitors, and associated equipment testing devices to the RMS health facilities across Jordan, to enhance its operational capacity in the provision of critical/urgent health services to vulnerable populations.[3]
· With funding from the government of Japan, UNOPS will deliver a specialized magnetic resonance imaging (MRI) scanner to help diagnose pediatric patients at the Queen Rania Hospital for Children in Jordan.[4]
Iraq
[UNHCR Iraq did not update the stats and figures of refugee presence and distribution.]
The UNHCR states that there are currently 301,606 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:
110,595 in Erbil (52.6%)
35,824 in Dahuk (17.1%)
29,653 in Sulaymaniyah (14.1%)
4,771 in Ninewa (2.3%)
16,298 in Baghdad (7.8%)
2,412 in Kirkuk (1.1%)
1,693 in Anbar (0.8%)
12,667 in other areas (4.2%)[5]
· Nearly 160 Iraqi families have been repatriated from Syria’s Al-Hol camp, home to tens of thousands of people including family members of suspected extremists, according to an Iraqi government spokesman.[6]
· The amount of humanitarian impact is increasing in Iraq following floods and flash floods triggered by heavy rainfall that have been affecting the whole country since 18 March. As a result, some people were either displaced, injured, and even killed.[7]
· Iraq's Ministry of Labour and Social Affairs (MOLSA) and the International Labour Organization (ILO) have unveiled a new landmark national strategy that lays the groundwork for building a more prosperous and equitable future for all in Iraq through inclusivity, equal opportunity, and social protection.[8]
Lebanon
[UNHCR Lebanon did not update the stats and figures of refugee presence and distribution.]
Since the beginning of January, the number of registered Syrian refugees in Lebanon is 784,884.
Refugees in Lebanon are distributed as follows:
,299,402 in Bekaa (38.1%)
220,931 in North Lebanon (28.1%)
176,836 in Beirut (22.5%)
87,715 in South Lebanon (11.2%)[9]
· According to OCHA, 90491 people so far have been displaced, with 316 killed and 909 wounded. Some of the IDPs are currently being hosted by 18 collective shelters.[10]
· In response to the extensive economic and fuel crisis impacting Lebanon, UNICEF prioritized a significant investment in solar solutions to sustain healthcare services for children and communities throughout the country.[11]
· The Lebanon Humanitarian INGO Forum, made up of 66 international non-governmental organizations, issued a fervent plea for the cessation of hostilities in Southern Lebanon as growing humanitarian needs are further exacerbated. [12]
Syria
· According to International Rescue Committee, over 85% of Syrians in northern Syria surveyed by the IRC are in debt; more than 90% can't repay it. 60% buy food on credit. 40% observe child labor in local markets, attributing it mainly to poverty and the need for family contributions to work.[13]
· The SRTF announced the successful closure of its Electricity intervention, “Providing Solar Power and Clean Water to Health Centres in Ar-Raqqa and Deir-ez-Zor”.[14]
· The SRTF announced the successful closure of its Food Security project: “Complementary Project for Enhancing Food Security in the North of Aleppo Governorate – Phase V”.[15]
Cyprus
· During a visit to Cyprus, the European Commission Vice President has said that Brussels could strike a deal with Lebanon to curb the number of migrant arrivals into the EU, after Cyprus has been witnessing an increased number of incoming Syrian refugees. [16]
[1] OCHA, Mar 6 2024, https://reliefweb.int/report/egypt/unhcr-egypt-sudan-emergency-response-update-06-march-2024
[2] OCHA, Mar 11, 2024, https://reliefweb.int/report/egypt/who-and-japan-sign-us-8-million-agreement-support-patients-gaza-strip-egypt-enar
[3] OCHA, Mar4, 2024, https://reliefweb.int/report/jordan/japan-and-unops-support-royal-medical-services-and-health-response-jordan-enar
[4] OCHA, Mar 7, 2024, https://reliefweb.int/report/jordan/improving-access-essential-healthcare-children-jordan
[5] https://data2.unhcr.org/en/situations/syria/location/5
[6] Al Arabiya, March 10, 2024, https://english.alarabiya.net/News/middle-east/2024/03/10/Iraq-brings-home-160-families-from-Syria-refugee-camp
[7] OCHA, Mar 21, 2024, https://reliefweb.int/report/iraq/iraq-floods-and-flash-floods-update-ifrc-noaa-cpc-echo-daily-flash-21-march-2024
[8] OCHA, https://reliefweb.int/report/iraq/groundbreaking-iraqi-national-strategy-set-reduce-inequalities-world-work-enar
[9] https://data2.unhcr.org/en/situations/syria/location/71
[10] OCHA, Mar 22, 2024 https://reliefweb.int/report/lebanon/lebanon-glance-escalation-hostilities-south-lebanon-21-march-2024-enar
[11] OCHA, Mar 19, 2024, https://reliefweb.int/report/lebanon/ministry-public-health-partnership-unicef-invests-solar-solutions-scale-healthcare-results-children-and-communities-across-lebanon
[12] OCHA, March 7, 2024, https://reliefweb.int/report/lebanon/joint-statement-humanitarian-agencies-issue-fervent-plea-cessation-hostilities-southern-lebanon-growing-humanitarian-needs-are-further-exacerbated-enar
[13] OCHA, March 14, 2024, https://reliefweb.int/report/syrian-arab-republic/syria-deepening-economic-crisis-compounds-conflict-misery-syria-crisis-enters-its-fourteenth-year-and-humanitarian-needs-reach-unprecedented-levels-warns-irc
[14] OCHA, March 13, 2024, https://reliefweb.int/report/syrian-arab-republic/srtf-successfully-empowers-healthcare-solar-power-and-clean-water-ar-raqqa-and-deir-ez-zor
[15] OCHA, March 12, 2024, https://reliefweb.int/report/syrian-arab-republic/srtf-boosts-food-security-northern-aleppo
[16] Info MigrantsMarch 25, 2024, https://www.infomigrants.net/en/post/56026/eu-mulls-lebanon-deal-to-prevent-irregular-migrants-from-reaching-cyprus
[MA1]by whom
[MA2]Please find another expression