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Turkey tries to keep wheels of economy turning

Turkey tries to keep wheels of economy turning

Bulent Gökay, Keele University elaborates on how Turkey tries to keep wheels of economy turning despite worsening coronavirus crisis. It, contrary to its neighbours, would not go down the same way. Read on to find out why.


Turkey confirmed its first case of the new coronavirus on March 11, but since then the speed of its infection rate has surpassed that of many other countries with cases doubling every two days. On April 2, Turkey had more than 15,000 confirmed cases and 277 deaths from complications related to the coronavirus, according to data collated by John Hopkins University.

The Turkish government has called for people to stay at home and self-isolate. Mass disinfection has been carried out in all public spaces in cities. To encourage residents to stay at home, all parks, picnic areas and shorelines are closed to pedestrians.

Some airports are closed and all international flights to and from Turkey were banned on March 27. All schools, universities, cafes, restaurants, and mass praying in mosques and other praying spaces has been suspended, and all sporting activities postponed indefinitely.

Manufacturing remains open

Many small businesses in the service sector are closed, and many companies in banking, insurance and R&D have switched to working from home. But in many industrial sectors, such as metal, textile, mining and construction, millions of workers are still forced to go to work or face losing their jobs. In Istanbul, where more than a quarter of Turkey’s GDP is produced, the public transport system still carries over a million people daily.

Recep Tayyip Erdoğan, Turkey’s president, has openly opposed a total lockdown, arguing a stay-at-home order would halt all economic activity. On March 30, he said continuing production and exports was the country’s top priority and that Turkey must keep its “wheels turning”.

But in the short term, many of Turkey’s export markets for minerals, textiles and food, such as Germany, China, Italy, Spain, Iran and Iraq, are already closed due to the virus. This has led to enormous surpluses piling up in warehouses. Even where there are overseas customers, getting the goods delivered has proven difficult. The process of sanitising and disinfecting the trucks and testing the drivers before they travel takes many extra hours, sometime days, after waiting in long lines.

Still, Erdogan’s statements give the impression that he sees this pandemic not only as a serious crisis, but also as an opportunity for Turkish manufacturers. The hope is that, after the Chinese shutdown, European producers which depend on Chinese companies for a range of semi-finished products may consider Turkey as an alternative supplier in the longer term. That’s why the government is still allowing millions of workers to go to factories, mines and construction sites despite the huge health risk.

A bruised economy

The Turkish government announced a 100 billion lira (£12 billion) stimulus package on March 18. It included tax postponement and subsidies directed at domestic consumption, such as reducing VAT on certain items and suspension of national insurance payments in many sectors for six months. But this is an insignificant sum for an economy as big as Turkey’s.

Most of the support will go to medium and large companies that were forced to close, and only a very tiny amount to individual workers. In order to benefit from the scheme, a person must have worked at least 600 days in the past three years (450 days for those in Ankara). Those with most need get the lowest level of help or no help from the state.

The tourism sector, which accounts for about 12% of the economy, has already been decimated. Some 2.5 million workers will not be able to work as they had been expecting to in the peak tourist months between April and September.

Limited room for manoeuvre

Even before the virus hit Turkey the economy was already weak, still trying to recover from the impacts of a 2016 coup attempt and a 2018 currency crisis, both of which caused severe stress to Turkey’s economic and financial systems.

In March, Turkey’s Central Bank reduced its benchmark interest rate by 1%, and several of the country’s largest private banks announced measures to support the economy, such as suspending loan repayments. As a result, the Turkish lira initially held up reasonably well, compared with other emerging market economies, but it fell to an 18-month low on April 1 as the coronavirus death rates accelerated. Official interest rates have fallen below 10%, providing some protection to those holding Turkish lira versus some foreign currencies.

Turkey’s financial options to limit the impact of the crisis are limited. Credit rating agency Moody’s revised its prediction for the country GDP from 3% growth in 2020 to a 1.4% contraction. Still, it may get a reprieve from the low oil price. Turkey imports almost all its energy needs, and with the recent fall in the price of oil and gas, this means Turkey could save about US$12 billion (£9.6 billion) in energy imports.

It is hard to see very far ahead. During the next few months, it’s expected that Turkey, alongside South Africa and Argentina, could be sliding toward insolvency and debt default. After that, everything depends on how this crisis progresses and how long it will take to end.

Bulent Gökay, Professor of International Relations, Keele University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Qatar to pay workers in quarantine full salaries

Qatar to pay workers in quarantine full salaries

The total number of confirmed coronavirus cases rise to 781 in Qatar, including two deaths. Information broadcast by QATAR based Al Jazeera NEWS that informs that Qatar to pay workers in quarantine full salaries. This was, in the not so distant past, was always the case.
Qatar has about 2.6 million inhabitants as of early 2017, the majority of whom (about 92%) live in Doha, the capital. Foreign workers amount to around 88% of the population, with Indians being the largest community numbering around 1,230,000. It will host the Football World Cup of 2022.

Qatar to pay workers in quarantine full salaries
The government announced that three billion riyals ($824m) were set aside to support companies in paying their employees. [Sorin Furcoi/Al Jazeera]

Migrant workers in Qatar who are in quarantine or undergoing treatment will receive full salaries, the government has announced.

Qatar has announced 781 confirmed coronavirus cases – the highest in the Arab Gulf region – and two deaths.

In a news conference on Tuesday, the Ministry of Administrative Development, Labour and Social Affairs (MADLSA) also said it was mandatory for employers and companies to follow the policy.

He added that a hotline service (92727) was launched to receive workers’ grievances.

“The companies are responding fully because they know that the workers were put in quarantine as a precautionary measure to protect all of us,” Muhammed Hassan al-Obaidly, assistant under-secretary for labour affairs at MADLSA, said.

He also said three billion riyals ($824m) were set aside to support companies in paying their employees.

“We are working 24 hours through department concerned for wage protection system to monitor the companies on a daily basis, checking the transactions, sending messages directly to the companies who are found delaying the payments,” said al-Obaidly.

“We will communicate with the workers in their language and will take the statement to address the issue. They do not need to come to the services centre of the ministry.”READ MORE

Qatar welcomes Bahrain move to evacuate citizens stuck in Doha

Those outside Qatar will be able to renew their Qatar identity cards (QID) without any penalties, he added.

Those who are unable to return home after having their jobs terminated will “remain in Qatar with proper lodging and food”.

“Some countries have closed their airports and, in such cases, an appropriate mechanism will be set on how to repatriate these workers to ensure they do not remain stranded.”

Reiterating Qatar’s policy of providing free treatment to all individuals infected with coronavirus, al-Obaidly, said those who do not have valid working visas and are illegal in the country would also be treated free of charge.

Amid growing fears over the spread of the virus, Qatar has banned the entry of foreigners after suspending all incoming flights for the next two weeks.

Last week, Qatar announced the closure of all shops, except for food stores and pharmacies, and bank branches. Eighty percent of government employees were also ordered to work from home.

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Bani Adam: the 13th-century Persian poem

Bani Adam: the 13th-century Persian poem

Arshin Adib-Moghaddam, SOAS, University of London comes up with ‘Bani Adam: the 13th-century Persian poem that shows why humanity needs a global response to coronavirus’ to tell us that this novel pandemic per this poem is not locally that much of a novelty, not different from its predecessors and it is all about human connectivity.


Bani Adam: the 13th-century Persian poem
A 19th drawing of the tomb of the Iranian poet Saadi in Shiraz. Pascal Coste via Wikimedia Commons.

Coronavirus is all about human connectivity. From a philosophical perspective, I’ve been thinking about how this virus is forcing us to confront our common fate, highlighting our connections in the process. The novel coronavirus defies geography and national borders. There is no escaping it – exactly because humanity is inevitably interdependent.

In a beautifully emotive poem called Bani Adam (human kind), drafted in the 13th century, the Persian-Muslim polymath Sa’adi used what can be employed as an analogy to our current challenge in order to visualise this common constitution of humanity. It reads:

Human beings are members of a whole,
in creation of one essence and soul.
If one member is afflicted with pain,
other members uneasy will remain.
If you have no sympathy for human pain,
the name of human you cannot retain.

These verses from Sa’adi’s Bani Adam decorate the walls of the United Nations building in New York and the poem was quoted by US president Barack Obama in his videotaped New Year (Nowrouz) message to Iran in March 2009 to open up a new chapter in Iranian relations with the US. More recently, the British band Coldplay used the poem as the title of a song in their album Everyday Life. It’s a poem that speaks to the inevitability of a common fate of humanity, that unites us into an intimately shared space.

A common fate

This effort of conjoining what has been artificially divided through nationalisms, religious doctrines and other forms of ideology, was equally central to a poem by the German genius Johann Wolfgang Goethe. He was very much influenced by Persian/Muslim philosophy and poetry, in particular by the 14th-century poet Hafez-e Shirazi.

In his magnificent work West-Eastern Divan, a very early manifesto against cultural essentialism – viewing one’s own culture in complete separation of others – Goethe wrote:

When people keep themselves apart in mutual disdain.
A truth is hidden from the heart.
Their goals are much the same.

As a communicable disease, the coronavirus compounds our inevitable common fate. Our existence cannot be safeguarded in isolation, we can only survive together: my fate is yours, ours is theirs. Social media, for instance, has adopted terms such as “viral” to describe particularly successful Tweets or Facebook posts, which demonstrate the dialogues between our bodies and minds that are ongoing at every second of the day on this global canvass. This interconnected reality of ours merges (rather than divides) categories such as “us” and “them”, “self” and “other” which are at the heart of problematic ideas about today’s eternal cultural wars.


Read more: Philosopher in Italian coronavirus lockdown on how to think positively about isolation


Our leaders continue to speak about the coronavirus in distinctly martial and psycho-nationalist terms. Even in a staunchly secular liberal-democracy such as France, president Emmanuel Macron described the crisis in war-like terms. US president Donald Trump used similar words when he likened himself to a “wartime president” in order to describe his fight against the virus.

And yet at the height of the pandemic, Trump’s administration pushed through more unilateral sanctions against Iran, which has been badly hit by coronavirus, and Venezuelan officials . At the time when countries such as China and Cuba are sending specialists to the epicentres of the crisis, Trump has punished the most vulnerable members of Iranian society for the sake of nationalistic power politics.

In search of a global response

In the meantime, many of us are concerned because we are finding out, tragedy by tragedy, that there is a lack of multilateral cooperation. Our elected leaders are incompetent or helpless and rampant capitalism has focused much of our resources on profit, rather than on institutions that serve the people.

The coronavirus transmuted into such an all-encompassing pandemic for two simple reasons. First, our common biology does not respect any of the mental and physical borders that were created to keep us apart. Second, coronavirus revealed how globalised our contemporary world is. Our lives are so closely interlinked and networked that this outbreak travelled all around the world within weeks.

The speed at which the virus spread demonstrates quite clearly the contracted space that we are all living in on Earth. Yet our politicians speak about national remedies and continue as if nothing has happened, as if we can insulate ourselves forever. It should be the World Health Organization and other UN bodies which take the lead to coordinate global policies for global problems.


Read more: Why defeating coronavirus in one country isn’t enough – there needs to be a coordinated global strategy


Yet, in clear contradiction to what is needed, politicians continue to speak of coronavirus in terms of mere national emergencies. This approach compartmentalises what is conjoined, and contributes to the current crisis which can only be faced properly with global coordination and within multilateral organisations. But the UN and its auxiliary network is despised by the new breed of hyper-nationalist leaders all around the world. It is these leaders who have stunted our ability to resolve borderless challenges such as this current pandemic.

There is a common fate inscribed in our lives which demands global answers to global challenges. “No man is an island,” wrote the poet John Donne in 1624. It’s time that we act upon the science, with the empathy of a poet, and institute a new form of internationalism that acknowledges and celebrates our common humanity.

Arshin Adib-Moghaddam, Professor in Global Thought and Comparative Philosophies, SOAS, University of London

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The Conversation

Iran’s army sets up hospital in capital as virus toll climbs

Iran’s army sets up hospital in capital as virus toll climbs

The recent pandemic is sparing no country around the world. It is confronted in a variety of ways that are fundamentally tied to each country’s specificities. Iran’s army sets up hospital in capital as virus toll climbs by Amir Vahdat and Joseph Krauss could be a solution that if generalised throughout could not only bring results. It could shorten the hardships of all current healthcare facilities efforts of the neighbouring countries.

TEHRAN, Iran (AP) — Iran announced another 144 deaths from the coronavirus on Friday and said thousands more were in critical condition as the military completed work on a 2,000-bed field hospital in an exhibition center in the capital.

Iran has reported nearly 2,400 deaths among more than 32,000 cases. Iranian officials have repeatedly insisted they have the outbreak under control despite concerns it could overwhelm the country’s health facilities.

Iran’s army sets up hospital in capital as virus toll climbs
People in protective clothing walk past rows of beds at a temporary 2,000-bed hospital for COVID-19 coronavirus patients set up by the Iranian army at the international exhibition center in northern Tehran, Iran, on Thursday, March 26, 2020. (AP Photo/Ebrahim Noroozi)

In Yemen, meanwhile, the U.S. Agency for International Development began scaling back aid efforts in areas controlled by the Iran-backed Houthi rebels over their resistance to allowing measures that ensure aid goes to those who most need it. Yemen has yet to record any coronavirus cases, but an outbreak in the war-torn country could be catastrophic.

Iran’s military said the new facility, which includes three units and several isolation wards, was set up in just 48 hours. It will be used for patients who are recovering from the COVID-19 illness caused by the virus.

State TV on Thursday quoted Gen. Ali Jahanshahi as saying the hospital has been handed over to medical staff and will begin receiving patients next week.

Most people infected by the virus only experience mild symptoms, such as fever and cough, and recover within a few weeks. But the virus can cause severe illness and death, particularly in older patients or those with underlying health problems. It is highly contagious and can be spread by otherwise healthy people showing no visible symptoms.

The virus has infected more than half a million people worldwide and killed more than 24,000. More than 120,000 people have recovered, according to the Johns Hopkins University Center for Systems Science and Engineering.

Iran is battling the worst outbreak in the region. Health Ministry spokesman Kianoush Jahanpour announced the latest deaths on Friday, bringing the total number of fatalities to 2,378 amid 32,332 confirmed cases.

He said nearly all of the approximately 2,900 newly confirmed cases are in critical condition. More than 11,000 people have been released from hospitals, according to the ministry.

Authorities have urged people to stay home but have not imposed the sweeping lockdowns seen elsewhere in the region.

Iran has been under severe U.S. sanctions since President Donald Trump withdrew his country from Iran’s 2015 nuclear agreement with world powers. The U.S. has offered humanitarian aid to Iran but authorities have refused.

Earlier this week, Iran’s supreme leader, Ayatollah Ali Khamenei, refused American aid and seized on a conspiracy theory that the United States created the virus, something for which there is no scientific evidence.

Hundreds of Iranians have meanwhile been sickened or died from drinking methanol in the mistaken belief that it offers protection from the virus. Word of fake remedies has spread across social media in Iran, where many are deeply suspicious of the government after it initially downplayed the crisis.

Lebanon, which has reported 391 infections and seven deaths, will impose a nighttime curfew starting Friday. The country of nearly 5 million has been under lockdown for two weeks, with only essential businesses allowed to remain open, a measure that will remain in place for at least another two weeks.

Israel, meanwhile, has seen a surge in infections in recent days. It has reported 3,035 cases and 10 fatalities, mainly older patients with pre-existing conditions. The Palestinian Authority, which governs parts of the Israeli-occupied West Bank, has reported 84 cases.

Authorities in the Gaza Strip, which has been under an Israeli and Egyptian blockade since the Hamas militant group seized power there in 2007, have reported nine cases.

Gaza’s health care infrastructure has been severely eroded by years of conflict and isolation. A major outbreak in the territory, which is home to more than 2 million Palestinians, could be extremely difficult to contain.

Another major areas of concern is Yemen, where the Houthis have been at war with a Saudi-led coalition for five years. The war has killed more than 100,000 people, displaced millions more and driven the Arab world’s poorest country to the brink of famine.

A USAID spokesperson said it was suspending nearly $73 million in aid “in the face of long-standing Houthi interference in humanitarian operations.” The Houthis control the capital, Sanaa, and much of northern Yemen, areas home to 70% of the country’s population.

The spokesperson said USAID will continue to provide life-saving assistance in areas at risk of famine. It will also support U.N. flights, water and sanitation programs which are essential to preventing the spread of the virus. It will also continue providing aid in southern Yemen.

The spokesperson spoke to The Associated Press on condition of anonymity in keeping with regulations.

The Houthis have long sought to divert aid to their fighters and supporters. Last year, the rebels blocked half of the U.N.’s aid programs and resisted efforts to expand biometric registration and other measures to ensure aid was delivered to civilians.

But Samah Hadid, director of advocacy for Oxfam Yemen, expressed concern that USAID’s pullback could leave the country even more vulnerable to the pandemic.

“With the start of the rainy season, we are projecting that Yemen could face over one million cases of cholera this year,” she said. “Coupled with coronavirus, this would spell a catastrophe for Yemen.”

___

Krauss reported from Jerusalem. Associated Press writers Isaac Scharf in Jerusalem, Maggie Michael in Cairo and Sarah El Deeb in Beirut contributed to this report.

Read more on the above-linked APNews original document and all the following related topics.

Coronavirus brings a disinformation surge about Qatar

Coronavirus brings a disinformation surge about Qatar

An article on disinformation titled Coronavirus brings a disinformation surge about Qatar, originally published by Coda Story is republished here as an eye-opener on how the world pandemic is currently made, as it were, good use of in the MENA’s Gulf region.

  • Text by Burhan Wazir
  • Photo by bphoto/AFP via Getty Images
  •  

A weaponized hashtag and fake Twitter accounts seek to blame the small Gulf nation for the spread of COVID-19

The ongoing blockade of Qatar by its neighbors is being further intensified by a new round of disinformation blaming the Gulf country for the spread of COVID-19.

Last week, Noura Almoteari — a Saudi Arabia-based journalist — posted on Twitter, saying that Qatar has known about the existence of COVID-19 since 2015. Earlier this month, she accused Doha of paying billions to China “to grow the virus.” She also coined the Twitter hashtag “Qatar is corona,” which has now been used hundreds of times on the platform. Almoteari stated that the country was spreading the virus in order to damage both the UAE’s upcoming Expo 2020 and Saudi Arabia’s future plans to diversify into a post-oil economy.

In addition to this, Qatar has come under attack from Twitter bot accounts that blame the country for the coronavirus outbreak. In January and February, numerous fake Twitter profiles advanced the theory that Qatar was responsible for spreading the virus to Argentina. The accounts have since been suspended.

The land, sea and air blockade of Qatar began in June 2017, when Saudi Arabia, the United Arab Emirates, Egypt and Bahrain severed diplomatic links with the gas-rich country, after years of rancor over Doha’s foreign policy.

The blockading quartet issued a list of demands, which seemed designed to turn Qatar into a client state. The orders included that Doha cut all ties with the Muslim Brotherhood and other Islamist movements, and that it shutterits media operations, including the broadcaster Al Jazeera. 

In the years since the blockade was launched, Qatar has faced repeated accusations from Saudi Arabia and the UAE of supporting terrorism. Armies of Twitter accounts and carefully orchestrated disinformation campaigns have become a prominent and ongoing feature of this diplomatic quarrel.

“The coronavirus campaign against Qatar began online as early as January, long before the current corona outbreak,” said Marc Owen Jones, assistant professor of Middle East Studies and Digital Humanities at Hamad bin Khalifa University in Doha, in a phone interview with Coda Story. 

“There were definitely some early disinformation campaigns on Twitter, which were basically saying that Qatar was responsible for the coronavirus, and that it had played a role in spreading it. People are trying to preempt the crisis and exploit it politically.” Subscribe to Coda’s Coronavirus Crisis newsletter

The disinformation campaign has also targeted Qatar’s labor camps — institutions common in Gulf nations, which house thousands of low-paid migrant workers. One Saudi newspaper has published a number of stories about the outbreak of COVID-19 affecting “hundreds” of people in the industrial areas outside Doha, where many of Qatar’s 1.9 million migrant workers live.

Qatar’s Ministry of Public Health says the total number of reported coronavirus cases in the country currently stands at 481. 

“I would say this is a continuation of the verbal barrage of misinformation and disinformation that is part of the Qatar blockade,” said Dr Sanam Vakil, a senior research fellow with the Middle East & North Africa Programme at Chatham House in London. “In this current iteration, it accuses the Qataris of spreading the virus. This will continue for quite a degree of time, and these sorts of campaigns are a reflection of how deep seated the tensions are.”

Vakil said the disinformation about Qatar echoed how other countries are trying to internationalize the cause of COVID-19. In recent days, China has sought to blame the U.S.; earlier this month, Bahrain accused Iran of “biological aggression” by covering up the spread of the coronavirus.

“While it is interesting these bots are blaming Qataris, I think it is part of a nationalist impulse that is not just unique to the Gulf in using an external crisis to whip up support,” Vakil added.

Kristian Coates Ulrichsen, author of “Qatar and the Gulf Crisis,” believes that the outpouring of digital disinformation about Qatar on Twitter must at least have the tacit approval of authorities in countries like the UAE and Saudi Arabia, where social media is closely monitored. 

“The fact that such comments have been made by high-profile individuals in Saudi Arabia and the UAE without facing any official censure suggests that their messaging carries the implicit approval of authorities, who are in other circumstances extremely quick to police and respond harshly to commentaries that they do not agree with,” he said.

Burhan Wazir is the Managing Editor of Coda Story’s Authoritarian Tech and Disinformation channels. He’s an award-winning journalist and editor, based in London, who previously worked at The Observer, The Times and Al Jazeera. He lived in the Middle East from 2008-2016.

Get in touch via burhan@codastory.com

The Arab World’s Perfect COVID-19 Storm

The Arab World’s Perfect COVID-19 Storm

Nasser Saidi describes in a Project Syndicate article The Arab World’s Perfect COVID-19 Storm. The author holds that this recent pandemic analysed here impacts will be significant. It is perhaps the first time that these are equally shared not only throughout the MENA region but the world at large. Any differences will, however, be in the manner with which this pandemic is specifically confronted locally. Read on for a better perspective view of the GCC region’s future.

March 24, 2020 

In the face of the COVID-19 pandemic, policymakers in the Gulf Cooperation Council states are rolling out stimulus measures to support businesses and the economy. But the camel in the room remains oil, especially the immediate impact on demand of the Chinese and global economic slowdown.

BEIRUT – Middle Eastern and Gulf Cooperation Council (GCC) economies are heading toward a recession in 2020 as a result of the COVID-19 pandemic, collapsing oil prices, and the unfolding global financial crisis.

The fast-spreading global pandemic – with Europe its new epicenter – is generating both supply and demand shocks. The supply shock results from output cuts, factory closures, disruptions to supply chains, trade, and transport, and higher prices for material supplies, along with a tightening of credit. And the aggregate-demand shock stems from lower consumer spending – owing to quarantines, “social distancing,” and the reduction in incomes caused by workplace disruptions and closures – and delayed investment spending.

The two largest Arab economies, Saudi Arabia and the United Arab Emirates, are proactively fighting the spread of COVID-19, for example by closing schools and universities and postponing large events such as the Art Dubai fair and the Dubai World Cup horse race. Likewise, Bahrain has postponed its Formula One Grand Prix.

Saudi Arabia has even announced a temporary ban on non-compulsory umrah pilgrimages to Mecca, and has closed mosques. Because religious tourism is one of the Kingdom’s main sources of non-oil revenue, the umrah ban and likely severe restrictions on the obligatory (for all Muslims) hajj pilgrimage will have a large negative impact on economic growth.

True, policymakers across the GCC are rolling out stimulus measures to support businesses and the economy. Central banks have focused on assisting small and medium-size enterprises by deferring loan repayments, extending concessional loans, and reducing point-of-sale and e-commerce fees. And GCC authorities have unveiled stimulus packages to support companies in the hard-hit tourism, retail, and trade sectors. The UAE has a consolidated package valued at AED126 billion ($34.3 billion), while Saudi Arabia’s is worth $32 billion and Qatar’s totals $23.3 billion. Moreover, policymakers are supporting money markets: Bahrain, for example, recently slashed its overnight lending rate from 4% to 2.45%.

But the camel in the room remains oil, especially the immediate impact on demand of the Chinese and global economic slowdown. The International Energy Agency optimistically estimates that global oil demand will fall to 99.9 million barrels per day (bpd) in 2020, about 90,000 bpd lower than in 2019 (in the IEA’s pessimistic scenario, demand could plunge by 730,000 bpd). Indeed, successive production cuts had already led to OPEC’s global market share falling from 40% in 2014 to about 34% in January 2020, to the benefit of US shale producers.

The weakening outlook for oil demand has been exacerbated by the Saudi Arabia-Russia oil-price war, with the Saudis not only deciding to ramp up production, but also announcing discounts of up to $8 per barrel for Northwest Europe and other large consumers of Russian oil. Although the Kingdom’s strategic aim is to weaken shale-oil producers and regain market share, the price war will also hit weaker oil-dependent economies (such as Algeria, Angola, Bahrain, Iraq, Nigeria, and Oman), and put other major oil producers and companies under severe pressure. Indeed, in the two years after oil prices’ last sharp fall, in 2014, OPEC member states lost a collective $450 billion in revenues.

That episode prompted GCC governments to pursue fiscal consolidation by phasing out fuel subsidies, implementing a 5% value-added tax (in the UAE, Saudi Arabia, and Bahrain), and rationalizing public spending. Nonetheless, GCC countries continue to rely on oil for government revenues, and their average fiscal break-even price of $64 per barrel is more than double the current Brent oil price of about $30 per barrel. The UAE and Saudi Arabia have estimated break-even prices of $70 and $83.60, respectively, while Oman ($88), Bahrain ($92), and Iran ($195) are even more vulnerable in this regard. More diversified Russia, by contrast, can balance its budget with oil at $42 per barrel.

The near-halving of oil prices since the start of 2020, the sharp fall in global growth, and the effects of the COVID-19 pandemic will put severe strains on both oil and non-oil revenue. As a result, GCC governments’ budget deficits are likely to soar to 10-12% of GDP in 2020, more than double earlier forecasts, while lower oil prices will also result in substantial current-account deficits.

Governments will respond by cutting (mostly capital) spending, magnifying the negative effect on the non-oil sector. Some countries (Kuwait, Qatar, and the UAE) can tap fiscal and international reserves, while others (Oman, Bahrain, and Saudi Arabia) will have to turn to international financial markets.

But will GCC governments be able to borrow their way out of this phase of lower oil prices? Global equity and debt markets currently are close to meltdown; with investors fleeing to safe government bonds, liquidity is drying up.

The GCC countries will suffer a negative wealth effect, owing to losses on their sovereign wealth funds’ portfolios and net foreign assets. And, given bulging deficits and the prospect of continued low oil prices, sovereign and corporate borrowers will find it harder and more expensive to access markets. The ongoing financial crisis will therefore exacerbate the effects of the oil-price shock and the pandemic.

The pandemic itself is still unfolding, and its eventual global impact will depend on its geographical spread, duration, and intensity. But it is already clear that in the coming weeks, there will be heightened uncertainty about global growth prospects, oil prices, and financial-market volatility. And as the pandemic continues its deadly march, the GCC economies – like many others – will be unable to avoid recession.

A Misery Dividend for Leaders in the Maghreb?

A Misery Dividend for Leaders in the Maghreb?

Intissar Fakir wondering a misery dividend for Leaders in the Maghreb? elaborated the following Carnegie Middle East DIWAN article.


Covid-19 may have given North African governments a respite from protests, but this is unlikely to last long.

March 23, 2020

In the short term, the Covid-19 pandemic is likely to provide the governments of Morocco, Algeria, and Tunisia with a respite from political contestation and mobilization. They have all struggled to varying degrees recently with popular dissent and challenges to their legitimacy. But in the long run, as each grapple with the economic and political aftershocks of the virus, the same questions of credibility and efficiency are likely to come back with renewed vigor.

The number of confirmed Covid-19 cases has been limited in North Africa, despite the region’s proximity to Europe. As of March 20, according to the Johns Hopkins Coronavirus Resource Center, Morocco had 77 recorded cases, Algeria 90, and Tunisia 54. Recognizing the vulnerability of their strained healthcare systems, the governments in the three countries responded early and aggressively to the new situation. They sealed their borders, limited social movement, and urged citizens to practice social confinement. All have closed down public spaces, including educational institutions, places of worship, cafes, and public transport. They have also asked non-essential public-sector workers to stay home.

All three countries fear that a pandemic would overwhelm them, as they lack the infrastructure or resources, or both, to respond to an outbreak. In Algeria, there are only 1.9 hospital beds per 1,000 people, compared to a global average of 2.7. In Morocco the figure is 1.1. And in Tunisia, which is closest to the global average, the number is 2.3. In comparison, it is 2.9 in the United States and 13.4 in Japan. While North African countries boast younger populations potentially less affected by the disease, 6.7 percent of the population in Algeria is over 65. In Morocco it is 7.1 percent. And in Tunisia it is 8.8 percent.

With regard to mitigating the economic impacts of Covid-19, responses have varied. Looking at border closures alone, Morocco and Tunisia must grapple with the significant economic losses likely to result from a cratering tourism sector. In Morocco and Tunisia, tourism contributes 19 percent and 15.9 percent to GDP, respectively.

The Moroccan government has created a fund to address the crisis. The fund was initially 10 billion dirhams, or $1 billion, mostly to supplement the needs of the healthcare sector. Given its limited budget, the state encouraged donations from businesses and private citizens, which helped raise the sum to 27 billion dirhams, roughly $2.7 billion. Moroccans were heartened and incredulous at the speed and generosity of the donations. The state has indicated it would support exposed sectors and has begun putting in place mechanisms to compensate some of the most vulnerable and affected citizens.

Algeria has taken similar steps, providing paid leave for mothers, preventing price gouging, and speeding up the importation of foodstuffs to avoid shortages. Algeria is something of an outlier in that its energy-dominated economy has never depended on tourism or manufacturing.

In Tunisia, the government put in place a fund through public donations to combat the virus. The fund has so far brought in around 4 million dinars, or $1.36 million. On March 21, Tunisian Prime Minister Elias Fakhfakh announced a number of economic measures and an aid package to struggling businesses and industries. But the country’s economic challenges, with limited economic growth, high unemployment, high public-sector expenditures, and low GDP growth, make the strain of Covid-19 even greater to bear. Tunisia is bracing for an unprecedented hit.

Painful economic fallout will once again taint confidence in these governments. Each of the three countries has faced sustained political contestation in recent years. This has largely been in the form of protests calling for a new political system in Algeria and more accountability in Morocco and Tunisia. All have been driven by the socioeconomic grievances that have shaped the region since, and even before, 2011. However, in a time of great uncertainty, as today, fear has pushed people to accept existing political structures as a source of certainty and strength, creating a sense of solidarity that has given governments a respite. It has deflated the opposition and limited the public’s desire to push for change.

As the aftereffects of the Covid-19 pandemic become clearer, they are likely to bring to the fore the policy failures that made the North African nations so fragile and susceptible to the virus in the first place. Economic mismanagement and underinvestment in infrastructure and human development have resulted in systems characterized by inequality and social precariousness. The governments of the three countries might be able to reinvent themselves in the short term, but beyond that the consequences of their errors are potentially destabilizing.

COVID-19 creates a responsibility for global media

COVID-19 creates a responsibility for global media

The Peninsula of Qatar informs that COVID-19 creates a responsibility for global media citing a QF professor.
COVID-19 creates a responsibility for global media

COVID 19 pandemic has created a responsibility for global media, but they’re not meeting it, according to Dr Marc Owen Jones, Assistant Professor in Middle East Studies and Digital Humanities at QF (Qatar Foundation) member Hamad Bin Khalifa University
He argues on why worldwide news coverage of COVID-19 risks adding to public panic.
 “I would say the global media is being absolutely irresponsible. They haven’t struck a very good balance between not trivializing issue, but also over-sensationalizing it. Everywhere you look, there seems to be this polarity of opinions: it’s either that COVID 19  isn’t so bad and it’s just like flu versus the constant coverage of COVID 19 -related issues, constant reports and numbers about how many new cases there are and where they are. I think this just inflames tensions about the issue,” he said in an email interview with media persons. 
“I was asked to write a piece recently, and the whole underpinning of this piece was that people are interested in stories. They drive a lot of clicks for advertising revenue, so media corporations that rely on advertising business models basically make money from clicks. And COVID 19 gets a lot of clicks. COVID 19, as well as being a virus, is actually going viral, so I think there is a big problem there,” he added. 
According to Dr Jones, it’s important to be transparent about any public health issue. The problem is that, often, the reporting of deaths happens as breaking news in big, garish headlines and is top of the news bill every day; that has certainly been the case in recent weeks and months. It’s not so much the reporting of figures that is the issue; it’s the constant reporting of new deaths every day in a way that occupies headlines. 
“I think this exaggerates the dangers and the impact of coronavirus in people’s heads. There are countless other illnesses or conditions or social issues that result in more deaths, but these are not reported on every day,” he said.  
 It is difficult to determine what is a reliable source of news, said Dr Jones. “It is not always easy. I don’t like to say you should rely on established news media, but in times like this, I do think it’s important to stick with something reputable, Don’t just retweet something you see on social media. Be very clear about whether the news you are reading has some sort of pedigree: is it linked to a well-known news site? Is it quoting, for example, a health official from a public ministry? That is always a good barometer to follow,” he added.  
Referring to overwhelming information spreading on COVID 19, Dr Jones said that ‘Infodemic’ is a very important term.
“We are getting a lot of information from a plurality of sources – too much information. This prevents people from being able to synthesize and process all this information, and what tends to stick in people’s heads is the more dramatic or sensational coverage. Too much exposure to news is more likely to promote a sense of panic, and I think it’s actually healthy to isolate yourself from this infodemic,” he said. 
According to Dr Jones, there is clearly an impact of relentless coverage of COVID -19 on people’s behaviors, and that it is not constructive.
He also said that COVID- 19 has occupied news coverage more than other issues for several reasons.   “The absence of anything else substantial in the current news cycle is also perpetuating this. It is a global issue, not a parochial issue affecting one country, so it will be reflected in country’s media. And it captures the imagination. People click on it because they find it fascinating and viscerally scary. And it’s been weaponized, which is contributing to this large media storm around the issue,” said Dr Jones. 
 He also insisted that there needs to be more responsibility in news coverage.
 Dr Jones said that media should perhaps have an updated set of best practices and recommendations, endorsed by the World Health Organization and public health officials, in a standing location on their web page. “This can be done in an understated way and a way that suggests this is about reporting and not sensationalizing,” he said.  
“The media has a responsibility to do this because, at the moment, the role they’re playing is to promote panic. Constant breaking news and red ticker tape on many news websites is not helping, and neither is the way coronavirus dominates headlines. The constant repetition of stories about deaths and new cases in bold front-page headlines is a problem,” he added. 

Why do Arabs dream of leaving their homelands?

Why do Arabs dream of leaving their homelands?

A popular question these days more than ever before would be “Why do Arabs dream of leaving their homelands?“. The answer could be something to do with their environment, climate and internet networking.


High unemployment rates, oppressive regimes and a desire for better education are some of the reasons cited by Arabs who express a desire to leave their countries.

The Arab world has seen a lot of its youth move in search of better opportunities for employment, freedom of expression, in addition to escaping from social and cultural norms they find oppressive.

According to an August 2019 poll by the Arab Barometer company, titled “Youth in the Middle East and North Africa,” the daily living situation in the region is far from ideal.

Noting that youth between the ages of 15 to 29 comprise about 30 percent of the Middle East and North Africa (MENA) countries, the Arab Barometer finds a significant number of them dissatisfied with their economic prospects.

They are also not happy with the education system. Moreover, “less than half say the right to freedom of expression is guaranteed”. Then there’s the high unemployment rates and widespread corruption.

This is why, Arab Barometer suggests, youth in the MENA region are more likely to consider emigrating from their country than older residents. The preferred destinations are varied, including Europe, North America, or the Gulf Cooperation Council (GCC) countries.

Another survey by Arab Barometer, titled “Migration in the Middle East and North Africa,” published in June 2019, notes that across the region, “roughly one-in-three citizens are considering emigrating from their homeland.”

The surveys were conducted with more than 27,000 respondents in the MENA region between September 2018 and May 2019 in face-to-face interviews.

According to the Arab Barometer’s findings, there had been a decrease in people considering emigrating from 2006 to 2016. Yet since 2016, the trend is no longer in decline but has shown an increase “across the region as a whole.”

The Arab Barometer finds that citizens are “more likely to want to leave” if they are young, well educated and male. The survey has found more than half of respondents between the ages of 18 and 29 in five of the 11 countries surveyed want to leave.

While older potential migrants are more likely to cite economic factors as the primary decision, the survey suggests, younger ones “are more likely to name corruption, for example.”

As for the desired destination countries, they vary according to the homeland of potential migrants. Among those living in the Maghreb countries of Algeria, Morocco and Tunisia, Europe is the favoured destination. 

Whereas migrants from Egypt, Yemen and Sudan point towards Gulf Cooperation Council (GCC) countries. The survey has also found that those from Jordan or Lebanon prefer North America, notably the US or Canada.

The survey also notes that while most would only depart if they had the proper paperwork, young males with lower levels of education who may not see a positive future in their homeland have said they would be willing to migrate illegally, “including roughly four-in-ten in six of the 11 countries surveyed.”

In a blog post for Unesco’s Youth Employment in the Mediterranean (YEM) published in January 2020, Sabrina Ferraz Guarino observes that “Migration is a coping mechanism based on the assumption that moving to another country is the best and most efficient investment for their own and one’s family future” and that improving people’s lives in their home countries will likely result in less desire to migrate.

Guarino says the unemployment rates in the Mediterranean region affect youth the most: “Unemployed youth are the highest in Palestine (45%), Libya (42%), Jordan (36.6%) and Tunisia (34.8%), while Morocco (21.9%) and Lebanon (17.6%) fare relatively better.”

She adds: “Viewing this together with the share of the youth that is not in education, employment or training (NEET), reveals how the challenges of youth employment remain self-compounding. The youth NEET rates tally around 14% in Lebanon and 21% for Algeria, but progressively increase across Tunisia (25%), Jordan (28%), Morocco (28%), and Palestine (33%).”

In its MENA report published in October 2019, the World Bank says growth rates across the region are rising but are still below “what is needed to create more jobs for the region’s fast-growing working-age population.” 

The World Bank recommends reforms “to demonopolise domestic markets and open up regional trade to create more export-led growth.” Source: TRT World

Related:

The Middle East still looking for a growth model

The Middle East still looking for a growth model

Posted on March 8, 2020, in The Arab Weekly, Six decades after independence, Middle East still looking for growth model by Rashmee Roshan Lall is an accurate survey of the region that faces, as we speak, prospects of harshest times. How is the Middle East still looking for a growth model? Investing in the human capital of children and young people as well as enhancing their prospects for productive employment and economic growth is little more complicated than relying on Crude Oil exports related revenues. These are the main if not the only source of earnings of the region now plummeting perhaps for good before even peaking. In effect, all petrodollar inspired and financed development that, put simply, was transposed from certain parts of the world, using not only imported materials but also management and all human resources can not result in anything different from that described in this article.


Though a large youthful population would normally be regarded an economic blessing, it’s become the bane of the MENA region.


The Middle East still looking for a growth model
Dramatic changes. Employees of Aramco oil company at Saudi Arabia’s Abqaiq oil processing plant. (AFP)

It’s been 75 years since World War II ended and the idea of decolonising the Middle East and North Africa began to gain ground but, while formal colonisation ended about six decades ago, the region seems unable to find a clear path to growth.

Rather than an “Arab spring,” what may be needed is a temperate autumn, a season of mellow fruitfulness to tackle the region’s biggest problems. These include finding a way to use the demographic bulge to advantage, reducing inequality of opportunity and outcome and boosting local opportunity.

Here are some of the region’s key issues:

Youth ‘explosion’

The MENA region’s population grew from around 100 million in 1950 to approximately 380 million in 2000, the Population Reference Bureau said. It is now about 420 million and half that population lives in four countries — Egypt, Sudan, Iraq and Yemen.

The 2016 Arab Human Development Report, which focused on youth, said most of the region’s population is under the age of 25.

The youth bulge is the result of declining mortality rates in the past 40 years as well as an average annual population growth rate of 1.8%, compared with 1% globally. The absolute number of young people is predicted to increase from 46 million in 2010 to 58 million in 2025.

Though a large youthful population would normally be regarded an economic blessing, it’s become the bane of the MENA region. The demographic trend suggests the region needs to create more than 300 million jobs by 2050, the World Bank said.

Jihad Azour, International Monetary Fund (IMF) director for the Middle East and Central Asia, said MENA countries’ growth rate “is lower that what is required to tackle unemployment. Youth unemployment in the region exceeds 25%-30%.” The average unemployment rate across the region is 11%, compared to 7% in other emerging and developing economies.

Unsurprisingly, said Harvard economist Ishac Diwan, a senior fellow at the Middle East Initiative, young Arabs are unhappier than their elders as well as their peers in countries at similar stages of development.

Last year’s Arab Youth Survey stated that 45% of young Arab respondents said they regard joblessness as one of the region’s main challenges, well ahead of the Syrian war (28%) and the threat of terrorism (26%).

The region’s population is expected to nearly double by 2030 and the IMF estimated that 27 million young Arabs will enter the labour market the next five years.

Poverty and inequality

Most Arab people do not live in oil-rich countries. Data from the UN Economic and Social Commission for Western Asia (ESCWA) stated that 116 million people across ten Arab countries (41% of the total population), are poor and another 25% were vulnerable to poverty. This translates to an estimated 250 million people who may be poor or vulnerable out of a population of 400 million.

The MENA region is also regarded as the most unequal in the world, with the top 10% of its people accounting for 64% of wealth, although the average masks enormous differences from one country to another.

The middle class in non-oil producing Arab countries has shrunk from 45% to 33% of the population, ESCWA economists said. In a report for the Carnegie Corporation last year, Palestinian-American author Rami G. Khouri described what he called “poverty’s new agony,” the fact that a poor family in the Middle East will remain poor for several generations.

Egypt is a case in point. In 2018, Cairo vowed to halve poverty by 2020 and eliminate it by 2030. However, Egypt’s national statistics agency released a report on household finances last year that said that 33% of Egypt’s 99 million people were classified as poor, up from 28% in 2015. The World Bank subsequently nearly doubled that figure, saying 60% of Egyptians were “either poor or vulnerable.”

Wealth gaps between countries are greater in the region than in others because it has some of the world’s richest economies as well as some of the poorest, such as Yemen.

Inequality is not the only problem in the region. Former World Bank economist Branko Milanovic said the uneven picture means that last year’s protests in Lebanon, Algeria, Sudan and Iraq cannot be explained by “a blanket story of inequality.”

Indeed, Algeria, a relatively egalitarian country, was roiled by protests, first against a long-serving president and then against the wider political system.

French economist Thomas Piketty, who wrote the bestselling book on income inequality, “Capital in the Twenty-First Century,” said Arab countries must come up with a way to share the region’s vast and unequally distrib­uted wealth.

Lost decades of growth

In the decade from 2009, the region’s average economic growth was one-third slower than in the previous decade. The IMF said per capita incomes have been “near stagnant” and youth unemployment has “worsened significantly.”

The state is the largest employer in many Arab countries and over-regulation of the private sector left it underdeveloped and unable to overcome the significant barriers to trade and economic cooperation across regional borders. Meanwhile, inflexible labour laws stifled job creation and cronyism allowed inefficiency to stay unchallenged. In 2018, the average rank of Arab countries on the World Bank’s Doing Business survey was 115th out of 190 countries.

Along with structural factors, conflict has had a debilitating effect on economic growth. Three years ago, the World Bank noted that the Syrian war had killed approximately 500,000 people, displaced half the population — more than 10 million people — and reduced more than two-thirds of Syrians to poverty.

By 2017, conflict in Yemen and Libya had displaced more than 15% and 10% of their respective populations of 4 million and 6 million. Taken together, the Syrian, Yemen and Libyan civil wars have affected more than 60 million people, about one-fifth of the MENA population.

Infrastructural damage runs into the billions of dollars but it is the loss — or outright collapse, as in Yemen — of economic activity that has affected real GDP growth.

Countries in the region affected by conflict lost $614 billion cumulatively in GDP from 2010-15 — 6% of the regional GDP, ESCWA’s 2018 report on institutional development in post-conflict settings stated.

New thinking needed

This is the year when, for the first time, an Arab country holds the chairmanship of the Group of 20 of the world’s largest economies. It could be an opportunity to consider existing trends within the region, what needs to be changed and how.

In the words of Oxford development macroeconomist Adeel Malik, “the Arab developmental model… seems to have passed its expiration date.” In a 2014 paper for the Journal of International Affairs, Malik said “failure of the Arab state to deliver social justice is ultimately rooted in the failure of a development model based on heavy state intervention in the economy and increasingly unsustainable buyouts of local populations through generous welfare entitlements.”

It’s a good point, for the region’s richest countries just as much as its poorest. Oil-rich states are affected by dramatic changes in oil prices and the increasingly urgent suggestion that the world is at “peak oil.” An IMF report warned that, by 2034, declining oil demand could erode the $2 trillion in financial wealth amassed by Gulf Cooperation Council members. The IMF said “faster progress with economic diversification and private sector development will be critical to ensure sustainable growth.”

Creativity and courage will be needed if the Arab world is to meet the expectations of its youthful population and the challenges posed by its increasing inequality.