Regreening the Desert would be the ultimate call for action from John D. Liu. Could it be addressed to the MENA region leaders, as part of seeming to be a universal appeal to try and redress the planet’s sad situation?
Can we in the meantime think of a “reforestation campaign” amid a coronavirus crisis? Yes, we can think of everything, since life carries on despite all that is going on. It would be the height of giving up life on the pretext that we are fighting death! Isn’t the tree life? Is there a relationship between reforestation and Covid-19? Certainly not, otherwise, it could be felt like a high contortion. But there is undoubtedly a relationship between the tree and life. It’s even excellent that one. There is oxygen, and there is wood, there is chlorophyll, there is shade, there is the fruit, there are colours and certainly other things that ordinary people cannot know. But do we have the heart to plant plane trees, carob trees and Aleppo pines when the “atmosphere” is to the maddening figures of contamination, the disturbing ambient nonchalance and the not very reassuring news that come to us from the hospitals? Yes, you can plant trees all the time, anywhere. Anyway here is John’s .
“Deserts are advancing and water is becoming scarce. It all seems hopeless… But one man has discovered how to make deserts green and our planet healthy again.”
“It is possible to rehabilitate large scale damaged ecosystems… Why don’t we do that?”
– John D. Liu
John D. Liu filmed Hope in a Changing Climate, following the Loess-plateau in China where local people redeveloped the land from a terribly damaged area into a functioning ecosystem. This documentary follows Liu explain what he’s learned and what he thinks we should do to revitalize ecosystems.
The process looks something like this:
Setting aside land for natural vegetation to return
Exclude grazing in the first 3 years.
Wait for native plants to return to the land.
Allow the microbial communities to grow within the habitat.
Encourage more organic matter, more biomass and more biodiversity.
“We need to redefine and revalue our belief systems. Money is a belief system. There’s nothing wrong with money, as it turns out. The problem is – what is money based on? If money is based on functional ecosystems, then the future will be beautiful. If money continues to be based on the production and consumption of goods and services we’ll turn everything into a desert.”
Olivia Lazard is a visiting scholar at Carnegie Europe. Her research focuses on the geopolitics of climate, the transition ushered by climate change and the risks of conflict and fragility associated with climate change and environmental collapse. Lazard has over twelve years of experience in the peacemaking sector at field and policy levels. With an original specialization in the political economy of conflicts, she has worked for various non-governmental organizations, the United Nations, the European Union, and donor states in the Middle East, Latin America, Sub-Saharan and North Africa, and parts of Asia. In her fieldwork, her focus was on understanding how globalization and the international political economy shaped patterns of violence and vulnerability. Diwan interviewed her in mid-November to examine how environmental issues are impacting the Middle East.
Michael Young: Climate change has been largely ignored by regimes and even societies in the Middle East, yet it is affecting them in fundamental ways. Can you outline some of the major effects of climate change and tell us why we in the region should pay attention.
Olivia Lazard: Climate change has been ignored the world over because we fail to understand that our governance and economic systems are exhausting nature’s capacity to function, and therefore to sustain us and other species. The challenge ahead is difficult to apprehend. It is not just a matter of energy transition; it is a matter of profound political and socioeconomic transformation. It is about disrupting the status quo. So it is easy to understand why this is not welcomed by autocratic regimes who may stand to lose grip on power, or by democratic societies where coordinated action can be even more complex. Even as certain parts of the world, such as Europe, move closer to a climate transition, we are still at the very early stages of a long journey toward the profound transformations that we are going to need in order to genuinely address the drivers of climate change and, more broadly, ecological disintegration that threaten our ability to survive as a species on this planet.
So, I agree with you that regimes in the Middle East ignore climate change, because they rarely like to talk about transformative change. But I wouldn’t say that the societies ignore climate change per se. In fact, I think it is fair to say that the Arab Spring was a climate-disrupted appetizer that upended the world’s understanding of the region, but also of the links between societal and environmental shocks. Arab societies were actually precursors in ringing the alarm bells on a combination of events that lead to disruption and protracted sociopolitical conflicts: drought, monoculture failings, speculation over staple goods leading to market failures, and worsening social disenfranchisement with no safety net in sight. Increasing temperatures, erratic weather patterns, the unreliability of rainfall, protracted drought, and increasing reliance on chemical inputs to grow crops were all the long-term backstory to these issues back in 2011, which few analysts picked up on. The biophysical factors that characterize climate change were already at play.
MY: How were the Arab uprisings climate-disrupted appetizers, as you’ve said?
OL: This is a side of the story that still doesn’t get told very often when we examine the Arab Spring and its aftermath, so let me dwell a bit on it by looking at Tunisia. In Tunisia, landscapes across the country are ecological deserts—export-oriented monocultures as far as the eye can see. It makes them very vulnerable to climate and economic shocks. Two years ago, I was traveling across the country and I could see that, between the touristy coast where inequalities could not be starker and the extractives regions of the south, decades-long agricultural and economic policies had turned a country which used to be fertile into a bare piece of rock and dust.
Today, a decade after the start of the Arab Spring, you have a country where unemployment is still soaring, where youths find no meaning or economic opportunities outside of the informal economy, where urban centers of the hinterland are boiling with anger and frustration, and where the free movement of people is extremely constricted from one governorate to another. Look around in a place such as Sidi Bouzid, and you either see depressing concrete in town or depressing desert as far as the eye can see. There is no life, there are no prospects. Both the land and the economy have come to a standstill. So people feel stuck. Local cultures have lost their vibrancy and intergenerational divides are growing wider. In this bare and inert environment, drug consumption, domestic violence, and radicalization are rising.
The land is actually the canvas of terrible policies that have favored extraction and predatory politics over resilient social fabrics, culture, and vibrant economies. And the problem is that climate change exacerbates problems that are already present. In Sidi Bouzid in 2010, the spark was Mohammed Bouazizi’s self-immolation. But his story was yet another reminder of problems running deeper and taking root in environmental exploitation, abuse of hard security at the expense of social and human security, enduring economic inequalities, poor governance, and rising violence. It is striking to see how national and international responses to these problems are missing out on the environmental story as a backdrop to social and economic violence. They just do not focus on it.
The picture that I am trying to paint here is one of interconnectedness between the environment and human security, which has always existed but that we really have only started noticing more as a result of climate disruption. Climate change will have two consequences—to exacerbate and disrupt. The Middle East knows this well. The history of landscapes in the region is one of abundance that cradled human civilization. But mismanagement of resources led to natural exhaustion and cycles of violence for centuries. Today, the region is in an advanced stage of desertification, with fewer and fewer resources to support human populations. The environmental degradation is coupled with an atmospheric accelerating force resulting in extreme natural shocks—floods, devastating droughts, and resulting fires. Unsurprisingly, the Middle East concentrates yet again all the ingredients that mark the history of our times.
Where human security is weakened by predatory and hard security-oriented regimes, economies tend to be more extractive toward nature. But nature can no longer sustain extraction. Resources are not just running lower—such as water or land fertility—they are also more erratic. The Middle East is now replete with foretellers of climate catastrophes—massive floods in the Arabian Peninsula, fires in the Levant, and drought everywhere.
These disasters are mostly showing one thing, namely that people have no safety nets to rely upon from their governance systems. There is no preparedness, no relief capacity. This means, once again, that Middle Eastern populations are left to struggle for their own dignity, or karama, the key word during the Arab Spring. It may well become a refrain of disruptions to come related to climate shocks.
Still, some regimes in the Middle East are talking about climate change. I am thinking particularly of the United Arab Emirates, but they do so in a “business as usual” way. They aim to demonstrate that economic power and technological innovation are a way to face the crisis. This is not going to work. Governance and socioeconomic systems need to be rethought in terms of their relationship with nature. We also have to look a lot more in the direction of nature-based solutions in order to navigate the unfolding disaster.
MY: There has been an argument that the Syrian uprising was caused by the drought between 2007 and 2010. Your thoughts?
OL: Without a doubt the drought played a role in the multidimensional uprising in Syria. But the drought itself has a story. It began in 2007 and became protracted over the years. Rainfall patterns were becoming more erratic. This was the result of two things: global warming resulting from excess carbon dioxide accumulation in the atmosphere and changes in landscapes at the local level. Apart from the coastline, over time Syrian land was denuded of natural vegetation, which is responsible for stocking water underground and pumping it into the atmosphere.
In addition to breaking the ecological integrity of the land (which regulates local climates), there were other things that created additional stress for the agricultural capacity in the area of Dar‘a and elsewhere. The Assad regime relied on two main crops for export—wheat and cotton—both of which are highly water intensive. So, atmospheric conditions were not providing rain, and on top of it there were agricultural incentives, such as subsidies, pushing unsustainable ground water consumption. In parallel, the liberalization of the economy led to hikes in diesel prices which farmers could not afford. The crops eventually failed, collapsing an already fragile economy and pushing people into acute food insecurity and economic vulnerability, which they were left to navigate mostly by themselves.
What followed was a mass movement from rural to urban zones, as well as a boom in the informal economy, which is often accompanied by abuse and insecurity for all members of a family household. This is an extremely violent process of the disintegration of livelihoods and security that spirals out of control. In those cities to which people moved, the population influx led to unsustainable water consumption, which created tensions between “old” and “new” communities. The land was impossibly stretched, and the state only concentrated on containing a bubbling situation by unleashing the security forces. Populations were squeezed between scarcity and violence. No wonder communities revolted. So, again, this is a story of exacerbation and disruption.
I was in Syria in 2009, and I remember then that all the communities with which I spoke accepted President Bashar al-Assad as the “devil they knew.” They knew that the equilibrium between the central state, the clans, and the various communities was precarious, but it was an equilibrium to which they could adhere for lack of a better alternative. When mass displacement, impoverishment, and violence started increasing, this equilibrium was upset. The state reacted in a such a way that it broke irremediably the multiple contracts that Assad had with various constituencies.
When you look through the lens of the environment, you can actually retrace the story of peoples, economic policies, and governance structures. Ask any elder in the Middle East what the land was like 60–70 years ago, and they will spend hours telling you stories about fruits and vegetables tasting better, people being more resilient, and communities being more intertwined. The state of the land is usually a reflection of socioeconomic situations—either of resilience or destitution. With increasing liberalization over the last decades, especially through structural adjustments, there have been inequalities and social dislocation. In the Middle East, governance structures are highly centralized and informally organized according to ancestral cultural and identity groups. The mix between the two has led to politics of group benefits and zero-sum games. In modern economies, that means that land and other natural resources are mostly integrated in an economic trickle-up model in which resources accrue to a few at the expense of social and natural public goods.
Climate change is a systems-disruptive force. It will upset old equilibriums to which authoritarian states and inefficient bureaucracies are ill-adapted to respond. So, yes, climate change is tied in with politics in the region, and it will have exponential effects over the coming years.
MY: One consequence of drier climates is that it will exacerbate water scarcity. Can you outline potential scenarios if the question of water is not adequately addressed by Arab states? What might be some ways of resolving the issue?
OL: Let’s fix a slight misconception first. Water scarcity leads to climate disruption leads to water scarcity. In other words, climates become drier because of inadequate water and land management. When you do this globally, all the while burning fossil fuels, you end up with a global climate regime deregulation. Agricultural, energy, and extractive policies are the primary drivers of water scarcity. Climate change exacerbates an already existing state of water scarcity.
Now, on scenarios. It is very hard to lay these out, because they depend on water levels, water sources and flows, water infrastructure, and socioeconomic relationships to water. What I can tell you is that water scarcity is a process of man-made depletion. It is not an overnight shortage. So, necessarily, the disruptions and sociopolitical breakdowns that result from it also take place in a process of exacerbation until it reaches points of disruption.
We can look at two different countries to understand how water scarcity impacts stability. Jordan is currently experiencing its worst drought in 900 years. The consecutive refugee flows coming from Palestine, then Iraq, then Syria over the last decades have led to repeated sudden bursts of population concentration in various parts of the country. In recent years, Mafraq and Irbid Governorates have been under acute water stress every summer, leading to severe tensions between refugee and host communities, higher criminality, xenophobia, and the reinforcement of tough security measures on the part of the Jordanian state. As a result of water running low, people have dug random boreholes into local water tables, which tends to worsen water stress for everyone, but also can lead to water pollution.
At a more structural level, in and near those governorates you have intensive forms of agriculture that drain water tables further. In Amman, where the government is under more direct political pressure, the city has been moving toward more efficient water infrastructure, and it is looking at desalination plants to increase the availability of water. But it is not the same story across the country. Water vulnerability is increasing and is having a series of knock-on effects. These effects are so far contained, so the two questions we need to ask are “until when?” and “and then what?” Here, we need to look at policy responses and ecological interdependencies underpinning Jordan’s water resources. It gives us an idea of the type of violence that may emerge and how far it can go geographically.
From an ecological standpoint, technology can only get you so far. As long as Jordan can make up for water shortages that sustain its economies, it will maintain a level of stability and water conflicts may remain confined to social tensions or to geographically confined zones. But that will have a growing cost over time, which will destabilize the country’s economy and sociopolitical fabric. If Jordan also reacts with force rather than rethinks its investment in the social and environmental fabric, it will likely pay a heavy price in the coming decade.
Iraq, on the other hand, is moving into active water conflict, especially around the ancestral ecosystem of the southern marshes. The water branches feeding into this ecosystem are impacted by hydroelectric infrastructures reducing the flow of water, general pollution, growing salination, and the collapse of local biodiversity. Because of the environmental degradation, people are moving into cities, which are themselves facing water stress. This has led to greater demand for water imports, forcing all households, including vulnerable ones, to spend their income on making up for the lack of available water. This leads again to growing social tensions, but also growing frustration with a central state that remains crippled by its inability to provide basic services, and therefore needs to constantly find ways of legitimizing itself.
Iraq is dependent for its water supply on Turkey and Iran. The more the Iraqi government fails to deliver at home, the more it is likely to escalate tensions with its neighbors. Over time, if this doesn’t lead to open warfare—which it probably won’t given Iraq’s weak defense capacity—it will reduce the chances for water-based cooperation to stop water depletion. This will impact all countries’ stability negatively, and will make them more vulnerable to climate change. The more individual states prioritize their national needs first, rather than cooperating on the basis of ecological integrity and environmental regeneration, the more they will undermine their own stability and cause environmental degradation. In other words within decades this region of the world may simply become uninhabitable.
In terms of solutions, there are a few. But I’ll focus on broad strokes. First, states and regions would need to transition away from activities that deplete water tables. This is no small feat as it is multisectoral. You need a shift toward regenerative agriculture, energy-efficient systems, and infrastructure development that do not encroach on ecosystems. The process does not just require an economic transition at the country level, it also requires a change in economic infrastructures and frameworks at the international level. Agricultural produce for example should be isolated from international speculation, and production should primarily serve for internal consumption and to reinforce resilience. Countries should encourage a diversity of cultures, including a return to indigenous seeds and crops, rather than systematized crops that are simply not suited to the ecological make-up of areas undergoing desertification.
Secondly, Middle East states need to adopt regenerative landscaping practices that literally help them to plant rain into the soil again. Globally, we need to harness the hydrological cycle in order to recover livable climates at local and global levels again, and preemptively manage floods. The interesting thing is that this is a sector that requires new competencies and which is also labor intensive. It is about redesigning landscapes so that they retain water, leading them to again become productive. This is a message that particularly resonates in the Middle East because rebooting functional ecosystems is also about rebooting local soil-related cultures. The Middle East was the cradle of civilization and culture as a result of its agricultural might for an enormous part of its history. There is the potential to recover for the future.
MY: Do you envisage a time when governments in the region will be able to wean themselves off the extractive policies that have damaged their environments? Or are they not thinking in these terms?
OL: They are not. Nor is it just governments in the region. Extractive policies are a function of growth-oriented economies that require energy. As long as we don’t change what extractive policies are used for, extraction will not cease. A tree will be worth more dead than alive. Underground resources will be more valuable unearthed and used than buried. Aggressive underground resource extraction made the Middle East what it is today. It came with economic growth as well as economic predation, inequalities, disenfranchisement, corruption, violence, and war. It also came with authoritarianism.
Unfortunately, we are likely to see the same type of story develop over the new scramble for resources related to renewable energy. For a long time, the Middle East played a central part in the global economic march that led us to where we are. But the Middle East won’t hold the same importance in tomorrow’s energy competition because it is not endowed with the needed resources such as rare earths and related materials. Admittedly, Middle Eastern countries are endowed in natural sunlight that can help their power transition, but the materials and technology used to harness this renewable energy is where the resource competition will play out, and give rise to new drivers of instability globally. These materials and technology are not located in the Middle East, which means that the center of gravity in energy politics will incrementally shift. This transition will be unsettling, but it may also represent an opportunity to try out different economic models on the basis of ecosystems regeneration. The European Union has already indicated its readiness to work with Middle Eastern partners on multiple transitions. It is however necessary to have a hard look at which type of governance systems are needed to usher in truly resilient transitions in a way that revive local and national economies from the ground up—literally.
MY: What for you are the top three most pressing environmental problems that countries in the region will need to prioritize in the coming decade?
OL: Water scarcity and land degradation will lead to crop failures. Floods will create more humanitarian and economic disasters, and will damage infrastructures that are already fragile. Urbanization is likely to increase, depleting water tables even more. Global energy shifts will lead to changes in oil price structures that may actually lead to more revenues in the short term and, possibly, more investments in security forces. The most pressing environmental problem is that we are entering an era of vicious cycles rather than isolated shocks. But this is not inevitable and what’s at stake is to break those cycles.
The overall challenge across the Middle East, like elsewhere in the world, is to rebuild ecological integrity. That means recreating landscapes that can hold carbon and water, and therefore sustain human activity again. It is about restoring equilibriums that help both to chart another socioeconomic path forward as well as to adapt to climate change and reverse it over time.
So that requires two tempos of change: adaptation and transformation. With respect to adaptation, climate-related disasters are already locked into the planet’s system due to past emissions and environmental degradation. The most pressing thing is to anticipate where and how disasters will hit and prepare accordingly. It requires ensuring continuous and shock absorption relief capacity in the future, which will demand internationally and regionally pooled resources. In addition, it will require redesigning landscapes in such a way that they can buffer the impact of disasters and store as much flood water as possible. This sounds abstract when you are not familiar with ecological design, but if you have a look at projects such as Greening the Desert in Jordan or regenerative projects in Saudi Arabia, you can get a sense of how to work with landscapes to adapt to new challenges.
On transformation, achieving this is hard work. Climate change calls for a profound redesign of political and socioeconomic systems. It is about transforming the way in which agriculture, energy, infrastructure, and other economic systems are set up and relate to the environment. And it is about investigating which governance systems best deliver on a safe operating space for human populations in a viable environment.
“The introduction of new environmental sustainability standards will bring Egypt closer to having a green economy”, elaborated on Ahramonline could drive the whole of the Middle East into reversing the trend, that of greening the desert as opposed to ever-increasing desertification. So how is Egypt moving towards a greener economy?
The cabinet has agreed to produce guidelines for environmental sustainability standards that will be integrated into the state’s plans for sustainable development, it was announced this week.
Minister of Planning and Economic Development Hala Al-Said said the announcement brought the country one step closer to its transformation into a green economy. Decrees had been issued for various ministries to form teams to be trained in integrating environmental standards into their projects, she added.
Al-Said said that sustainability standards would be factored in when allocating budgets for projects, with the move accelerating Egypt’s progress towards the UN Sustainable Development Goals (SDGs) and related international commitments and making it one of the first Arab countries to integrate the green economy into the state budget through so-called “green budgeting”.
Incorporating sustainability standards into the state’s economic and social development programmes and Egypt’s Vision 2030 would help to preserve resources for following generations, Al-Said explained.
The environmental sustainability standards will be considered in the 2021-22 budget. Priority will be granted to projects that follow the new environmental guidelines, and the assessment of investment projects will be conducted according to sustainability standards, she added.
Green initiatives will be launched in coordination with the ministries concerned, and periodical reports will follow up on progress in implementing the new standards.
Al-Said said that there were 691 green projects in the 2020-21 budget at an estimated cost of LE447.3 billion, 15 per cent of which, or LE36.7 billion, came from public investments, with a stated goal of doubling the allocations in the next budget.
Minister of Environment Yasmine Fouad said the cabinet’s approval of the environmental sustainability standards would help to spread a culture of sustainability and expand on integrating environmental dimensions into existing plans.
She said green investments targeting protecting natural resources from pollution and depletion, such as clean energy, recycling, and treating waste water, were being increased, and such green investments would improve Egypt’s competitiveness on the Environmental Performance Index by increasing such public investments from 15 per cent this year to 30 per cent in the next.
Green projects are development and service-oriented projects that take account of their effects on natural resources and increase the efficiency of their operations, she added.
The world was rearranging its priorities owing to changes resulting from the Covid-19 pandemic, Fouad said. In Egypt, the ministries of environment and planning collaborated to lay out a vision for Egypt’s transformation towards a green economy to increase the country’s investment opportunities, raise the competitiveness of local products, generate more job opportunities, and bring to a halt losses resulting from environmental deterioration, she added.
She said green projects helped to ensure the preservation of natural resources and biological diversity, reducing pollution, raising the efficiency of public spending, and increasing revenues. They also helped to increase competitiveness in production, rationalise water consumption, optimise benefits from non-conventional water resources, ensure the optimal utilisation of waste in safe and environmentally friendly means, and diversify energy sources to new and renewable resources.
Fouad cited as examples of green projects environmentally friendly industrial complexes, the development of canals, water desalination plants, treatment plants for medical waste, and solar energy projects.
The Ministry of Environment was providing the technical support for guidelines to integrate environmental factors into development projects and programmes to train public-sector executives in implementing and operating green projects, she said.
This was in tandem with the Ministry of Planning’s efforts to integrate sustainability standards into project evaluations, in addition to finding solutions to problems that could stand in the way of expanding projects across different sectors.
In Masdar, FAB full retrofit mission for Abu Dhabi-based Future Rehabilitation Centre
Renewable vitality firm Masdar has introduced the completion of an vitality and water-saving retrofit mission for the Abu Dhabi-based college for Individuals of Willpower.
The Future Rehabilitation Centre in Mohammed bin Zayed Metropolis is benefitting from vitality reductions of over a 3rd and water financial savings of almost 30% as a direct result of the retrofit, based on a press release from Masdar.
The mission was accomplished in collaboration with First Abu Dhabi Financial institution (FAB), and funds from a particular co-branded, biodegradable bank card had been used to finance the retrofit. This adopted an intensive audit of the Future Rehabilitation Centre by Masdar’s Vitality Providers crew and contractor Smart4Power.
Masdar added that the intensive vitality conservation mission included the set up of an on-grid rooftop photo voltaic photovoltaic system offering 30 kWp capability, a sophisticated air flow and air-conditioning management system, numerous water-saving gadgets, particular soil components, LED lights, and thermal coatings on the college’s roof to scale back warmth acquire. A monitoring system has additionally been put in to confirm the achieved financial savings.
Commenting on the mission, Yousif Al Ali, government director for Clear Vitality at Masdar, stated: “The UAE and Abu Dhabi are dedicated to tackling the numerous problem of lowering building-related carbon emissions, which account for almost 40% of whole emissions globally. Masdar is proud to be supporting the UAE authorities’s mandate by leveraging its experience in retrofitting to ship vital vitality and water-savings for the Future Rehabilitation Centre.”
“We’re honoured to have the ability to make a optimistic contribution to the unimaginable work of the Future Rehabilitation Centre, which is devoted to supporting younger Individuals of Willpower.”
Masdar added that the conservation measures recognized as a part of the retrofit mission had been put in on the 5,500 sqm. purpose-built facility by Smart4Power, who’re additionally answerable for monitoring the ability’s ongoing operations.
In the meantime, Dr Mowfaq Mustafa, director of the Future Rehabilitation Centre, stated that they had been delighted to be awarded this vitality saving mission.
“As we anticipated, this mission gives our college students and employees a greater setting with improved air high quality and visible acuity, making a optimistic impression. The mission delivers significant financial savings on our utility payments and permits us to redirect funding towards new expertise and growth of our academic programme for the scholars,” he added.
Masdar additional acknowledged that the retrofit is advancing the school-wide vitality conservation program in help of the UAE Imaginative and prescient 2021 and Vitality Technique 2050, and the United Nations Sustainable Improvement Objectives.
Iraq’s Prime Minister inherited a series of fiscal crises. As his interim government struggles to avert a complete economic collapse, austerity measures may come at the expense of much-needed reforms.
Since taking office, Iraqi Prime Minister Mustafa al-Kadhimi has faced a series of fiscal and security crises amid collapsing public services and protests. The collapse in global oil prices due to the coronavirus pandemic and the Saudi-Russia oil price war caused Iraq to face an internal solvency crisis as early as June. This fiscal crisis has short and long-term implications. In the short-term, Baghdad continuously struggles to pay public sector salaries, which required the state to borrow from the Central Bank over the summer. With low oil revenue, the state’s monthly profits are covering just over 50 percent of its expenses. In the longer-term, Iraq faces a looming macro-fiscal state collapse—potentially within the next year.
The state is struggling to cover its monthly expenses. Over successive governments, the size of the public sector has grown to the point that Iraq needs to spend more than its total revenue on basic payments—public sector salaries, pensions, food aid, and welfare—to keep a majority of Iraq’s population out of destitution. In 2019, oil revenue averaged $6.5 million per month, and with modest non-oil revenues (largely customs, well less than $1 billion per month), this covered operational expenses with a small amount left over for capital spending. Since the recovery of oil prices after the March collapse, Iraq’s monthly oil revenues have averaged just over $3 billion/month, hitting a high of $3.52 billion in August. In testimony before parliament in September, Finance Minister Ali Allawi revealed that with revenues at these levels, the government was still borrowing 3.5 trillion Iraqi Dinars (IQD) — just over $3 billion—from the Central Bank each month.
On October 10, as Iraq’s cash crunch became more acute, Allawi explained that state employee compensation rose from 20 percent of oil revenues in 2005 to 120 percent today. To help the public understand why the government of such an oil-rich country was broke, he explained that a government of this size should have at least $15 to 20 billion in funds to pay monthly expenses on an ongoing basis, but when this government took office, only about $1 billion was available. This is in part due to weak revenues, the result of low oil prices and Iraq’s adherence to OPEC’s limitations on oil exports. In the past, Iraq’s oil exports have reached 3.5 million barrels per day (bpd), yet they decreased to 2.5 million bpd in recent months. Prominent figures, including former oil minister Ibrahim Bahr al-Ulum, have argued in favor of leaving the OPEC agreement unilaterally. Yet Allawi, speaking before Parliament, explained that while he agreed that OPEC’s quota formula was unfair, Iraq needs the OPEC agreement to keep oil prices from collapsing. More recently, according to the Iraq Oil Report, the government has signaled that it may try to thread the needle by increasing exports by 250,000 barrels per day to satisfy critics—an amount above its quota, but still about 750,000 barrels per day below peak production, and thus hopefully too small an increase to incur Saudi retaliation.
Iraq’s monthly oil revenue to collapsed from $6.2 billion in January to just $1.4 billion in April. The figure recovered to $2.9 billion in May and has gradually improved since, but in August was still just $3.5 billion. Since the government only had about $3 billion in expendable reserves in May, it became clear that Iraq could not pay state employees in June. Salaries over the summer were paid as money became available. As late as July 28, the prime minister’s spokesman admitted that employees at the Culture & Antiquities Ministry (apparently the lowest priority), were still waiting to be paid.
The government saw this crisis coming and began preparing the public for austerity. Finance Minister Allawi made multiple public appearances, describing Iraq’s situation as dire and arguing for radical reform. In particular, he predicted that the government, while protecting base salaries, would make large cuts to employee benefits and other costs. On June 9, the cabinet followed through when it voted to implement a series of austerity measures, including cutting benefits, cutting unessential spending, and capping income from “double-salary” payments. Kadhimi’s advisor Hisham Daoud described the new policies as “not enough but only a start” toward reform.
Kadhimi, with no electoral base or political base of his own, has faced the fiscal crisis with a weak hand. This became clear when Parliament overwhelmingly rejected the government’s austerity policies on June 10, one day later. Even MPs friendly to the government described the government’s measures as premature, suggesting that they should try to raise revenue through customs first. Parliament eventually passed a borrowing law on June 24 to allow the government to borrow just enough to make basic payments. This law, however, prohibited the government from cutting benefits. Previously, the cabinet had the authority to cut benefits because, unlike salaries set by law, benefits were set by previous cabinet decrees. Thus, Parliament made the long-term problem worse.
In July, protests resurged in Baghdad as a result of the fiscal crisis. The shortage of money caused Iraq’s electricity shortage to worsen dramatically. Outgoing Electricity Minister Luay al-Khatteeb attributed the decline to two factors: lack of maintenance and the suspension of planned electricity projects.
The government has a few possible, but politically difficult, fixes at its disposal. They could cut the subsidy of roughly $1 billion per month to private electricity consumption, which exists because the ministry only collects a fraction of consumer payments. Finance Minister Allawi pointed out that “people don’t pay their electricity bills” and that “95 percent” of consumption costs was absorbed by the state, asserting that “electricity is not a constitutional right.” Yet such an effort will recall former prime minister Haider al-Abadi’s experience trying to extract electricity payments in 2017, which precipitated a strong protest movement. So far, Kadhimi has shown no sign of pushing the issue. His published comments during a cabinet meeting devoted to the electricity issue focused on “reducing bureaucracy” and improving maintenance, sidestepping the fact that maintenance workers have to be paid.
Iraq’s fiscal crisis comes on the heels of the political crisis of the outgoing government, which left the country without a budget for most of 2020. In such cases, Iraqi law allows the government to spend one twelfth of the previous year’s actual spending each month. Since this year’s revenues have been low, it never had the money to spend that much and simply spent what it had on basic payments. In September, the government released a budget for 2020 and the planned deficit was large—well over 100 percent—so as with past budgets much of the deficit will likely not be spent. The total anticipated revenues are 67.4 trillion dinars, or $57 billion, compared with proposed expenditures of 148.6 trillion dinars, or $125.7 billion. Oil revenue in 2019 was $78.5 billion yet is projected to be just $49.3 billion for 2020. The government withdrew the bill just two days after it arrived in parliament.
In September the government ran out of money, having used up the borrowing authority from the June bill. Given the population’s overwhelming dependence on state salaries, this brought the short-term financial problems to the fore. Furthermore, Parliament refused to authorize the new borrowing authority Allawi sought because the government had not submitted a “reform plan.” Thus in early October the government released a “White Paper” reform plan. The plan draws a broad and long path to reform that does not directly address the immediate crisis, except to the extent that its publication formally satisfies Parliament’s precondition for new borrowing.
An important part of Allawi’s efforts was his advocacy of Iraq accepting an International Monetary Fund “Stand-By Agreement” (SBA) which might be the only way to prevent a fiscal collapse next year. The agreement would also require spending cuts that parliament has already rejected. Allawi stressed that the IMF would not require cuts to programs protecting the poor, but rather to public sector compensation that, in Allawi’s view, Iraq needed to cut anyway.
This set the stage for a new debacle as the government then sent a new borrowing law to Parliament only to condemn it. A member of Parliament on the Finance Committee criticized the figures in the bill as irresponsible. Given the parliament’s role in aggravating the crisis, this was grandstanding. The looming parliamentary elections, due no later than 2022 and possibly earlier, are driving the political theater. Parliament will presumably pass an amended version of the government’s borrowing bill to allow the government to pay salaries. In the meantime, with salaries being paid late, disposable income is squeezed, further damaging an already weak economy. But Iraq could face a much worse scenario in 2021, as the IMF’s updated forecast for Brent oil prices projects $46.70 per barrel. Iraq’s Central Bank, which rescued the government over the summer, relies on a steady flow of dollars from oil revenues and given current prices range from $40 to $45, reserves are gradually declining. According to financial analyst Ahmed al-Tabaqchali, at current oil prices the Central Bank can continue to print money to fund the government “for about eight or nine months.”
In terms of immediate steps, at a minimum, a devaluation of the Iraqi dinar (long pegged at 1,182 to the dollar) seems likely in 2021. This would relieve some pressure on the Central Bank and make the government’s expenses cheaper (since its income is in dollars), but it would also drive up inflation over time. The bigger threat is that by mid-to-late 2021, the Central Bank will no longer be able to support the government, forcing austerity through non-payment of operational expenses, including salaries.
It is clear that the government needed to adopt a policy of cutting public sector expenses while increasing its capital investment in agriculture and industry and devoting more resources to education and health. Kadhimi’s reform measures in June were too little, too late. Still, the austerity that Parliament has resisted will be inevitable if oil prices do not rise dramatically in the months to come. A key priority from an international point of view is that the IMF, as a condition for its loans, impose upon Iraq the reforms for which Allawi has been advocating and which parliament has so rejected. It does not seem likely that reform will come to Iraq by any other means.
Kirk H. Sowell is the publisher of the biweekly newsletter Inside Iraqi Politics (www.insideiraqipolitics.com). Follow him on Twitter @uticarisk.
 In most of these comments, Allawi gives the figures in Iraqi dinars. I have converted them to dollars. Thus, he said, for example, that the Finance Ministry had 1.3 trillion IQD when he came into office. This is slightly over $1 billion.
 When a family received a payment for a deceased breadwinner and receives another government benefit.
 Testimony by the finance minister and discussion of the budget starts at 1:38:00.
 In the previously cited video from Parliament on September 8, he refers to the IMF briefly around 2:25:00, then again around 2:48:00, and once more near then end of the four-hour video in response to an MP attacking the IMF option.
 The reading begins at 00:09:00 and the comments referred to in the text follow.
 Author interview conducted on October 28, 2020 via Skype.More on:
The Kingdom of Saudi Arabia (KSA) is at a crossroads. Recent long-term studies of the area indicate that rising temperatures and evaporation rates will likely further deplete scarce water resources critical to meeting the nation’s agricultural, industrial, and domestic needs; more extreme flooding events could endanger lives, economic vitality, and infrastructure; and a combination of increasing heat and humidity levels may ultimately render the kingdom uninhabitable. Facing a foreboding future, how might the nation adapt to changing climatic conditions and become more resilient to climate extremes?
Due to the KSA’s distinctive natural and artificial features, from coastal landscapes to river beds to agricultural areas, decision-makers seeking to design actionable plans for regional and local adaptation and resilience will require projections of the KSA’s mean climate and extreme events at a higher spatial resolution than what previous studies have produced.
To that end, a team of researchers from the MIT Joint Program on the Science and Policy of Global Change and the King Abdulaziz City for Science and Technology’s Center for Complex Engineering Systems used a high-resolution, regional climate modeling approach to generate mid-21st century (2041–2050) projections under a high-emissions, high-climate-impact scenario. The climate projections carry an unprecedented four-kilometer horizontal resolution and cover the entire KSA, and focus exclusively on the months of August and November. During these months, which represent, respectively, the KSA’s dry-hot and wet seasons, extreme events have been observed more frequently.
Applying this modeling approach, the team projected increasing temperatures by mid-century across the KSA, including five strategic locations—the capital city of Riyadh, religious tourism destinations Makkah and Madinah, the designated future tourist site of Tabuk, and the port city of Jeddah—in both August and November, and a rising August heat index (high heat and humidity) that particularly threatens regional habitability in Jeddah due to an increasing frequency of extreme heat index days.
The researchers also found an increase in the intensity and frequency of precipitation events in August by mid-century, particularly along the nation’s mountainous western coast, suggesting a potential for water harvesting—that could replenish local aquifers and supplement water supplies elsewhere—as a regional climate adaptation strategy to avert future water scarcity. The projections also showed a significant decline in precipitation rates in a sizeable stretch of desert extending from the southern portion of the country known as the Empty Quarter.
The study appears in the journal Atmosphere.
“The intent of our research was to highlight the potential use of our modeling approach not only to generate high-resolution climate projections that capture the effects of unique local spatial features, but also to enable local solutions for climate adaption and resilience in the region,” says Muge Komurcu, the study’s lead author and a research scientist at the MIT Joint Program.
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