From Gaza to West Bank
Middle East Socioeconomic Overview
Report: August 2024
Now it the West Bank’s turn. Photo credit: https://www.bbc.com
While Lebanese decision makers tell citizens to return to their homes as the conflict is considered to have been defused, the occupiers are still keen on boosting war rhetoric that aim to endanger region. Nevertheless, tensions have decreased from what was expected a full blown-out regional conflict that would spiral out of control. For the time being, the world awaits what the occupying entity’s war monger has in store for the rest of the region, as evidently, conflict seems the only reason that keeps him in power and away from local and international jurisdiction. For this reason, he turns his attention to the West Bank.
1. THE SOCIO-ECONOMIC SITUATION
Egypt
Despite its successes in economic development, some economic indicators still weigh down on Egypt. Photo credit: www.arab-reform.net
The United Nations Special Envoy for Financing for Development, Dr. Mahmoud Mohieldin, said that Egypt should not rely on borrowing for financing. He added that the Egyptian economy, unlike many economies in the Arab region, has the potential for economic diversification, as Egypt has great potentials in agriculture, industry, services, and tourism, as well as human resources, as it is indeed a wealth that can be benefited from. He explained that the focus should be on localizing development by focusing on the local dimension of development by mobilizing savings and resources through the discipline of the state’s general budget and by not relying on debt that is based on the public sector. He pointed out that there are better alternatives for financing through a mix of local and foreign components, that can make an impact in basic facilities, education, and health, and make room completely for the Egyptian, Arab, and foreign private sector. Of course, the process must be accompanied by the good management of international trade, because Egypt’s aim should not be restricting imports, but pushing exports forward. Also he emphasized that Egypt should manage its public debt as the Egyptian economy still relies on the International Monetary Fund’s reviews, which until the end of 2026, gave good signs of macroeconomic stability. Although it is not a sufficient condition for growth, it is a necessary for Egypt to minimize inflation and international debt and increase foreign exchange reserves.
The envoy also discussed reasons for Egypt's lag in economic and social development, compared to other countries with similar circumstances. He also focused on the importance of formulating an appropriate macroeconomic policy agenda to compensate for this delay. On the issues impacting indirectly the economy, he mentioned the challenges the country also faces when it comes to household income, social well-being, productivity, and many other indicators which are important for economic success in the 21st century, when we compare Egypt to other developing countruies. Unfortunately, the government is yet to tackle such a problem and is still fixated on gaining foreign investment or enhancing economic ties with other countries. That is why, Egypt is seeking to deepen its ties with Singapore through a meeting they held recently. The meeting tackled ways of fostering trade and investment ties between both countries over the coming period, bolstering the strategic partnership between the two countries to drive economic development. Yet again, leaving the rising poverty issue unattended can lead to a detrimental effect on the country’s successes when developing partnerships.
Jordan
The Jordanian economy, thanks to its exports and reform process, was able to adapt to geopolitical crises. Photo credit: Arab News.
The credit rating agency Fitch, in its latest analysis of the Kingdom’s economy, expected that economic growth in 2024 would be affected as a result of a number of geopolitical risks in the Middle East. It eastimates that the real GDP growth rate in Jordan will reach 2.2 percent in 2024, down from 2.6 percent in 2023, and less than the pre-pandemic average over ten years, which amounted to 2.4 percent. The agency based its finding on the data from the Department of General Statistics which indicated that economic growth slowed to 2 percent on an annual basis during the first quarter of 2024, from 2.3 percent during the last quarter of 2023. Despite this, Jordanian exports showed resilience in the face of the repercussions of the attacks in the Red Sea, although the war on the Gaza Strip, which has been ongoing for about 10 months, is continuing to affect the arrival of tourists and investment in the Kingdom. Moreover, economic experts have not that the slow down in the economy would have been much worse, if it were not for the reform Jordan had launched. Nevertheless, the experts insisted that in order to sustain Jordan's improved presence on international indicators and reap its economic benefits, they called for the need to redouble governmental efforts in addressing the challenges of the national economy, and to take all means that guarantee stimulating local economic activity, in addition to the need to reform public administration to ensure that it is reflected in the improvement of the performance of government institutions and the level of productivity and improving the local investment environment. In addition, they claimed that attention must be paid to the ongoing risks in the global economic environment resulting from geopolitical crises, especially the war on Gaza and its repercussions on supply chains and energy and food prices, and to the high indebtedness as a percentage of gross domestic product, and high budget deficit.
Iraq
Meeting between Turkey’s Erdogan and Iraq’s Sunday. Photo credit: turkpress.co/
Throughout this month, Iraq continued to sign new energy deals in order to increase its export of oil. At the beginning of August, the office of the Iraqi Prime Minister, Muhammad Shia al-Sudani, claimed in a statement that Iraq had signed a memorandum of understanding with the British BP Group to rehabilitate and develop the four North Oil Company fields in Kirkuk, as well as the possibility of agreeing on other fields or exploratory patches. Iraq had adopted such contracts instead of service contracts during May, with the aim of encouraging and attracting more investment in the energy sector. In addition, the Iraqi Oil Ministry awarded a contract to Sinopec to develop the Sumer exploration block in Muthanna, and another to CNOOC for exploration block number 7, which spans the provinces of Diwaniyah, Najaf, Babylon, Wasit and Muthanna. Iraq’s strive to upgrade its energy sector coincided with its plan to diversify its economy. For this reason, Iraq redoubled talks with neighboring Turkey as part of the previously declared “Development Road” project so that to attract investments and pay the way for new productions. Unfortunately, the security situation in the country, especially regarding the events connected to the war in Gaza, may scare of prospective companies who want to give the Iraqi market the chance. Nevertheless, Turkey’s leadership is striving to aid Iraq in building its security and sponsoring joint projects so that to Iraq to be more stable and therefore allow for more stable neighbor, aligning with its interests.
Lebanon
Regardless of the war, the economy of the country may dwindle in the near future. Photo credit: alaraby.com
Despite the easing of tensions between Lebanon and the occupier, military conflict is still taking place at the borders. The United Nations Office for the Coordination of Humanitarian Affairs said that 23% of the population in Lebanon suffers from food insecurity, after the rate was 19% last March, due to the ongoing hostilities on the southern border. With a food stock sufficient for three to five months, Lebanon is facing the ongoing armed escalation without any guarantees regarding its repercussions on inflation, amid fears that it will increase once again as it did in the past. According to Standard and Poor’s rating agency external debt now represents 90%, and the gross domestic product will rise slightly in 2026 to $19.4 billion, then decline again to $18.7 billion the following year, at a level similar to what it is now. It also indicated that per capita GDP will not exceed $3,200 in 2027, i.e. 35% of what it was in 2018, and public savings will remain in deficit at 3.7% of GDP, and the debt-to-GDP ratio will reach 236.8% in 2027 compared to 143% in 2018. It spoke about the fact that if the current situation continues, the exchange rate of the lira against the dollar will rise to 151,000 liras in 2027. As a result, Standard & Poor's assigned Lebanon an "SD" rating, meaning "selective default", on its long- and short-term foreign currency debt, and "CC" and "C" with a negative outlook for Lebanese lira treasury bonds in the long and short term. In this context, economic expert Michel Fayyad explained, that the negative outlook for the CC rating for the local currency in the long term reflects the view that the government can restructure its lira debt as part of a broader program, and the outlook also reflects the fact that gaps in the administrative capacity of the public sector could pose risks to timely debt servicing, noting at the same time that Standard & Poor's rating comes less than a month after Fitch Ratings announced that it is no longer able to measure Lebanon's financial solvency. This fact alone should make decision makers and Lebanese worried.
Palestine
The Occupier ramps up its assault on the West Bank. Photo credit: Middle East Eye
While the occupant continues operations in Gaza and reports that operations are decreasing in numbers and scope, he turns his attention to the West Bank where violence is currently on the rise. In addition to withholding tax revenues from the Palestinian Authority to pay wages and the checkpoints that already had been scattered across the West Bank, the increasing raids and operations have begun to exert increasing pressure on the suffocated economy. With politicians within the occupier’s entity advocating for a “Gaza Style” operation, the damage that will be imposed on the West Bank’s infrastructure will be unimaginable. To make matters worse, settlers from the Zionist entity are also engaging in terrorist activities on local Palestinians by storming neighborhoods to steal more lands. Things are also destined to spiral out of control with the declaration of a government-funded initiative to send Jewish pilgrimages to the Al-Aqsa mosque and maybe constructing a Jewish temple there, a move that will not enrage Palestinians but the whole Muslim world. As a result of all these actions, business owners within the West Bank have begun decreasing opening hours or closing due to fears of wider escalation, the decrease in number of citizens commuting, and the already drained purchasing power of citizens living there. For the time being there are no official figures of how the recent operations are going to effect the GDP, but what is for certain the West Bank is going to pay in human lives and without receiving any tax compensation as demanded by several nations which include the US.
Syria
Damascus International Airport.
Syria is currently in its 14th year of economic crisis, although the level of conflict has sharply decreased compared to years before. Nevertheless, economic woes remain to rain heavily on the nation especially when the value of the Syrian currency has fallen to unprecedented levels, levels of inflation remain high, sanctions remain in place, the Ukrainian-Russian war and Gaza war continue, and massive chunk of damaged infrastructure and livelihoods remain unattended to. In December 2023, the Syrian Government’s People’s Assembly approved the draft state budget law for the fiscal year 2024, which set budget allocations at a total amount of 35.5 trillion Syrian pounds (about 3.1 billion dollars), distributed among 26.5 trillion pounds for current spending, and 9 trillion pounds. for investment spending. Unfortunately, this highlighted a major concern: the total deficit reached 9.404 trillion liras. To make matters worse, the official dollar exchange rate of 11,557 Syrian pounds per dollar when the budget was announced, the Syrian state budget declined from $5.52 billion in 2023 to $3.1 billion in 2024, and this represents a 45% decrease in one year. Despite the wave of openness and normalization and Syria’s return to the Arab League, economic deterioration in Syria persists, and with it continues the failure of the Syrian government to provide the necessary funding for the service sectors, which pushes local entities to increasingly rely on themselves to meet the needs of basic service. Yet this has led to rampant resignations and absenteeism among public sector employees, which undermines the performance of basic services such as education and health.
Although the situation remains bleak, there are some minor advancements that can give hope during such dark times. One instance, is that Syrianair officials have recently discussed in pro-government media a series of initiatives to revamp the aviation sector. According to them, they aim for the revival of 2018 discussions to purchase Russian aircraft and the plans to privatize the management of the state-owned Syrian Airlines. Also, they are set to receive a USD 370 million investment which includes the upgrade of the Damascus Airport. Another positive news is the fact that Syria and Sudan have signed a two-year executive program to develop research cooperation ties and trade exchanges in the agricultural field, following the visit to Damascus of the Sudanese Minister of Agriculture at the end of July. This is very important for both countries since they rely heavily on the agriculture sector. In the green energy sector, Syria also registered a minor success by reporting that it has increased its power output to 120MW and 50 MW in Syria Interim Government (SIG) areas.
Cyprus
Council of Ministers convening. Photo credit: kathimerini.com
The Cypriot government is currently in the process of setting a 2025 state budget by first setting expenditure limits for all ministries. The aim of the budget is to continue the government’s growth program, aimed at enhancing Cyprus’ economic model by enhancing collaborations between Cypriot and foreign companies, particularly in export-oriented initiatives. This also done to improve the current account balance. New potential areas for growth will also be explored while committed to strengthening sectors where Cyprus has comparative advantages, such as tourism. What will assist in the implementation of these plans are the 1.2 billion Euros Recovery and Resilience Plan. The Ministry is preparing to request the 5th and 6th tranches of this funding, with significant disbursements expected by the end of the year. Based on the recommendations of the IMF, the government is also focused on restructuring the public service and rationalizing the state wage bill. Building on recent data showing a 3.7% growth in Cyprus’ GDP for the second quarter of this year, Finance Minister Makis Keravnos claimed that the 2025 budget projects a primary surplus of €1.42 billion, or 4.3% of GDP, with an overall fiscal surplus of €936 million, or 2.8% of GDP. Moreover, the Minister also discussed increasing salaries and wages to mimic the improving economy, although some have voiced concern about the fact that things can change due to current geopolitical circumstances. Nevertheless, there seems to be a general confidence that Cyprus’s policies that has made one of the best economies in Europe, will allow it to stay ahead and adapt to any change in circumstances.
2. THE HUMANITARIAN SITUATION
Egypt
· According to the UNHCR, the Sudanese refugee population in Egypt has grown almost sevenfold in what is considered the worst displacement crisis in the world, impacting 10 million people, with at least 2 million having fled to neighboring countries, including Egypt.[1]
Jordan
The UNHCR states that there are currently 625,025 registered refugees in Jordan up until the beginning of August.
The proportion of Syrian displaced people registered within the UNHCR for the beginning of August, are distributed as follows:
186,368 in Amman Governorate (29.8%)
161,081 in Mafraq Governorate (25.8%)
122,162 in Irbid Governorate (19.5%)
91,921 in Zarqa Governorate (14.7%)
15,982 in Balqa Governorate (2.6%)
12,431 in Madaba Governorate (2%)
8,191 in Jarash Governorate (1.3%)
8,049 in Karak Governorate (1.3%)
8,012 in Maan Governorate (1.3%)
5,331 in Ajlun Governorate (0.9%)
3,741 in Aqaba Governorate (0.6%)
1,303 in Tafilah Governorate (0.2%)
453 in other (0.1%)
· A solidarity stand, in presence of the United Nations Relief and Works Agency (UNRWA) and other representatives from the humanitarian community, was organized at the agency premises in the Jordanian capital Amman, to protest the killing of civilians and humanitarian aid workers in Gaza.
· The WFP and the United Nations High Commissioner for Refugees (UNHCR) completed preparations to conduct joint community consultations with refugees across Jordan in August, which aim to understand and address the impact of reduced assistance on families in need.[2]
Iraq
The UNHCR states that there are currently 307,251 registered Syrian refugees in Iraq.
The proportion of displaced Syrian people registered within the UNHCR up until the beginning of August, are distributed as follows:
118,647 in Erbil (51.6%)
39,623 in Dahuk (17.2%)
31,601 in Sulaymaniyah (13.7%)
2,287 in Ninewa (1%)
24,023 in Baghdad (10.4%)
2,758 in Kerbala (1.2%)
2,339 in Najaf (1%)
2,736 in Kirkuk (1.2%)
1,692 in Anbar (0.7%)
1839 in other areas (0.8%)[3]
· UNDP Iraq and the United States Agency for International Development (USAID), in collaboration with the Government of Iraq, announced the launch of "The Road Back Home: Community Reconciliation and Reintegration of Iraqis Returning from Syria’s Al-Hol Camp" (CRRISA). This flagship program is slated to support 18,000 of Iraqi nationals returning from Al- Hol camp in northeast Syria.[4]
· The United Nations Mine Action Service (UNMAS) in Iraq welcomes an additional contribution of DKK 22,000,000 (approximately USD 3,173,170) from the Government of Denmark, which will contribute to support the Government of Iraq (GoI) to protect civilians from the threat of explosive ordnance (EO) and will enable humanitarian, socio-economic, and reconstruction efforts.[5]
Lebanon
{UNHCR Lebanon did not update its figures for the month of August}
Since the beginning of July, the number of registered Syrian refugees in Lebanon is 774,697.
Refugees in Lebanon are distributed as follows:
292,348 in Bekaa (37.7%)
219,556 in North Lebanon (28.3%)
175,815 in Beirut (22.7%)
86,978 in South Lebanon (11.2%)[6]
· 102,523 individuals (51% females) have been displaced from South Lebanon due to the ongoing hostilities as of 6 August. 2,252 casualties have been reported, including 532 deaths. Among these, at least 120 civilian deaths have been confirmed.
· During August, WHO and UNICEF have collectively delivered 97 tons of emergency supplies to the Lebanese Government, including trauma and surgical kits, medications, and medical supplies.[7]
· As airstrikes being conducted on Lebanese soil are also killing Syrian refugees located in the area, the number of refugees being targeted have increased during August. [8]
· A number of human rights activists raised their concerns about the controversy that some Syrian refugees killed during the war are not being allowed to be buried in local cemeteries. [9]
Syria
· UNICEF released a report in August detailing that it has reached over 4.6 million people during the first half of 2024. Of those, 2.7 million are children (50% girls), 1.2 million are women and 40,885 are people and children with disabilities.[10]
· A report has surfaced claiming that pregnant women in northern Syria’s camps for internally displaced people fear about their health and the health of their unborn children because of a lack of basic medical care and a healthy diet.[11]
· The SRTF announced the success of its project by declaring the average potato yield of 30.5 metric tonnes (MT) per hectare (HA) in Northeast Syria, under its Agriculture intervention, “Supporting Potato Farmers in Ar-Raqqa and Deir-ez-Zor Governorates”.
· The Syria Recovery Trust Fund’s (SRTF’s) Management Committee (MC) approved a new Health intervention and a new Agriculture project in Northeast Syria and Northern Aleppo. [12]
Cyprus
· As fighting continues to escalate in the Middle East, EU member state Cyprus, located in the eastern Mediterranean, is increasingly coming into focus. According to Deutche Welt, the country might become a gathering point and safe haven for those who manage to flee the violence in the region.[13]
[1] Global Issues, August 26, 2024, https://www.globalissues.org/news/2024/08/26/37478
[2] OCHA, August 15, 2024,https://reliefweb.int/report/jordan/wfp-jordan-country-brief-july-2024
[3] https://data2.unhcr.org/en/situations/syria/location/5
[4] OCHA, August 19, 2024, https://reliefweb.int/report/iraq/launching-new-project-support-over-18000-vulnerable-iraqis-enar
[5] United Nations, July 24, 2024, https://iraq.un.org/en/274865-government-denmark-provides-additional-contribution-unmas-support-mine-action-sector-iraq
[6] https://data2.unhcr.org/en/situations/syria/location/71
[7] OCHA, August 13, 2024, https://reliefweb.int/report/lebanon/lebanon-flash-update-24-escalation-hostilities-south-lebanon-08-august-2024
[8] Independent Arabia, August 20, 2024, https://www.independentarabia.com/node/606102/
[9] Al Modon, August 21, 2024, https://www.almodon.com/society/2024/8/21
[10] OCHA, August 22, 2024, https://reliefweb.int/report/syrian-arab-republic/unicef-syrian-arab-republic-humanitarian-situation-report-no-1-january-june-2024
[11] OCHA, https://reliefweb.int/report/syrian-arab-republic/absence-reproductive-care-haunts-syrian-displaced-women
[12] OCHA, August 4, 2024, https://reliefweb.int/report/syrian-arab-republic/srtf-approves-new-health-and-agriculture-projects-northeast-syria-and-northern-aleppo-enar
[13] DW, August 14, 2024, https://www.dw.com/en/middle-east-crisis-cyprus-readies-to-receive-refugees/a-69933197