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.
Qatar has about2.6 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.
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
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.
MENA sovereign wealth funds are set to yank billions from stock markets, with the cash needed back home reportedAlison Tahmizian Meuse in an article Gulf faces recession as oil deluge meets COVID-19 in an Asian Times article dated March 30, 2020. It is said elsewhere notably in the local media that these sovereign funds could shed something like $300 billion.
Middle East oil exporters are bracing for recession and the lowest growth rates since the 1990s, with economists warning that the “twin shocks” of Covid-19 and plummeting oil prices will have a knock-on effect across the region.
“Quarantines, disruption in supply chains, the crash in oil prices in light of the breakdown of OPEC+, travel restrictions, and business closings point to a recession in the MENA region, the first in three decades,” the Institute of International Finance warned this week.
Oil exporters in the Gulf and North Africa are projected to see growth levels drop to 0.8%, IIF said, based on an average price per barrel of $40. At the time of publication on Monday, crude was hovering at cents above $20 per barrel.
Petro-titans like Saudi Arabia, which have shifted major resources toward sovereign wealth funds in recent years, are expected to recall funds back home as their collective surplus of $65 billion is flipped inside out to a deficit of the same amount or more.
These sovereign wealth funds could shed up to $75 billion in stocks in the coming period, Reuters on Sunday quoted JPMorgan’s Nikolaos Panigirtzoglou as saying.
Saudi Arabia’s Public Investment Fund currently holds significant shares in everything from ride-hailing app Uber to Japan’s SoftBank.
Such funds have likely already offloaded as much as $150 billion-worth of stock in the month of March, said Panigirtzoglou.
How did we get here?
Saudi Arabia earlier this month launched an oil price war, flooding the market with crude in a game of chicken against Russia after the latter refused to collaborate on production cuts.
Moscow, which desired lower prices to compete with US shale, did not blink.
The result has been, Bloomberg reports, a “cascade” of oil surplus, with some landlocked producers literally paying buyers to relieve them of supplies they cannot store.
From Saudi Arabia to Algeria, MENA exporters are expected to see hydrocarbon earnings fall by nearly $200 billion this year, according to the Institute of International Finance report, resulting in a loss of more than 10% of GDP in this sector alone.
As the price war was launched, the novel coronavirus began spreading through the Gulf, shattering hopes of diversifying toward tourism in the near future.
Saudi Arabia, with approximately 1,300 confirmed cases as of Monday, has shuttered the gates of Mecca over fears it could become the new virus epicenter after Iran.
The religious pilgrimage to Islam’s holiest sites, mandatory for every Muslim, nets Saudi Arabia billions of dollars each year.
The financial troubles in the Gulf do not stop at the Persian Gulf, but are slated to have a painful knock-on effect across the Middle East region.
Young people from Lebanon, Jordan, and Egypt – with its population of 100 million, have for decades turned to the Gulf Arab states for jobs after graduation, doing everything from running restaurants in Riyadh to working in banks in Dubai.
Such positions have become even more crucial in a time of heightened visa restrictions in the United States and Europe.
A recession in the Gulf, thus spells an even worse outlook for already struggling economies in the Levant, which often look to the oil producers for help during hard times.
“A global recession will lead to a reduction in trade, foreign direct investment, tourism flows, and remittances to Egypt, Jordan, Morocco, and Lebanon,” IIF said.
Egypt, the report notes, is expected to see a “significant drop” in critical Suez Canal transit revenues, as global trade suffers.
The Egyptian government earlier this month revoked the press credentials of Guardian correspondent Ruth Michaelson after she reported on a researcher’s findings that Egypt was seeing a higher number of Covid-19 cases than reported.
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.
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.
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.
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.
Nation will be able to finance current account deficit for 35 years even with prices this low
The UAE is best-positioned among GCC economies to weather the decline in oil prices as it can finance its current account deficit longer than any of its regional peers, says a new report.
According to Capital Economics, the UAE can finance its current account deficit for 35 years if oil prices stay at $25 a barrel. Kuwait comes second followed by Qatar, Saudi Arabia, Bahrain and Oman.
“In the four largest Gulf economies – Saudi Arabia, the UAE, Kuwait and Qatar – current account deficits could be financed through a drawdown of large foreign exchange savings for a considerable amount of time. Saudi Arabia could do so for around a decade and the other three countries for even longer,” said Jason Tuvey, senior emerging markets economist at
Capital Economics. The report said the UAE still runs a current account surplus at $30 a barrel.
Brent crude was trading down $3.37, or 12 per cent, at $25.35 a barrel by 1720GMT after dropping as low as $25.23, its weakest since 2003. US crude was down $5.19, or 19 per cent, at $21.76. The session low was the lowest since March 2002.
Data showed that UAE-based sovereign wealth funds held over $1.21 trillion worth of assets in August 2019 compared to $825.76 billion by Saudi Arabia, $592 billion by Kuwait, $320 billion by Qatar and $22.14 billion by Kuwait.
Oil prices have plummeted over the last few weeks, firstly due to coronavirus and then the collapse of Opec+ talks on production cuts. Brent has dropped 45 per cent in the past month from $57.60 a barrel on February 17 to $31.60 on March 17.
Tuvey noted that large foreign exchange savings provide substantial buffers and the likes of Bahrain and Oman, which are most vulnerable to a period of low oil prices, and can probably rely on financial support from their neighbours to avert devaluations.
He said dollar pegs in Bahrain and Oman are more vulnerable, with foreign exchange savings only able to cover current account shortfalls for a couple of years at most. Bahrain secured a $10 billion financing package from its neighbours in mid-2018.
In recent days, GCC governments have stepped up fiscal support in order to mitigate the economic hit from efforts to contain the virus. “If oil prices stay low even after the virus fears have subsided, austerity will come on to the agenda and this means that an eventual recovery in non-oil sectors will be slow-going,” he said.
Khatija Haque, head of Mena research at Emirates NBD, has said that the UAE posted a budget surplus of Dh37 billion ($10 billion) in 2019 and is well-positioned to withstand lower oil prices in 2020.
“If we strip out volatile oil revenues, we estimate the UAE’s non-oil budget deficit narrowed to just under 20 per cent of non-oil GDP, down from 27 per cent of non-oil GDP in 2015, and pointing to a tightening of fiscal policy in recent years,” Haque said.
Monica Malik, chief economist at Abu Dhabi Commercial Bank, said the sharp fall in oil prices and the outlook for a price war adds significant downside risks to the economic outlooks of GCC countries.
“We estimate that all GCC countries will realise a significant fiscal deficit at the current oil price of $37 per barrel, with Oman and Saudi Arabia seeing particularly significant shortfalls relative to GDP. A weaker oil revenue backdrop will require a meaningful pull-back in government spending, as was the case in 2015 and 2016, to limit the size of the fiscal deficit,” Malik said.
She sees a forecasted increase in output from Saudi and Russia and the changing dynamics of oil market fundamentals will likely bolster global oil stocks significantly in 2020. A number of oil-importing countries are also likely to accumulate inventories at the current low price levels, which in turn would lower oil demand during second-half of 2020.
Furthermore, the outlook for inventories beyond 2020 will depend on global demand and coronavirus-related developments in the coming months, she added.
Edward Bell, commodity analyst at Emirates NBD Research, has said that dust has not entirely settled yet caused by travel restrictions and lockdowns due to coronavirus.
Oman’s Ministry of Technology and Communications (MTC) has committed to a memorandum of cooperation (MoC) with BankDhofar at the Sas Center for the 4th Industrial Revolution (4IR), in order to manage a technology innovation lab at the center.
The MoC was reportedly signed by Dr Salim bin Sultan Al Ruzaiqi, CEO at MTC, and Abdul Hakeem Omar Al-Ojaili, CEO at BankDhofar.
The innovation lab has been established to help students and local Fintech startups, as they focus on developing innovative financial technology products and services.
“The Ministry has launched the SAS Center for the 4th Industrial Revolution to keep pace with the current developments in the ICT sector. Signing this MoC with BankDhofar reflects the significant role of the private sector in supporting this dynamic sector and the Omani youth initiatives in entrepreneurship.”
He added that through this cooperation, they aim to create an encouraging environment that can help develop useful Fintech solutions, which could become part of the 4th IR technologies.
He also said the project aims to encourage and support Oman’s private sector organizations to continue to empower the nation’s emerging technology fields.
“The innovative lab at Sas Centre for 4th Industrial Revolution serves our vision of contributing to such projects of national value, and it also contributes to the development of the Fintech field in general.”
“We are in the midst of the 4th Industrial Revolution where the banking sector has to seize the opportunity and take part, supporting the youth and encouraging them to become effective in a field which will positively contribute to the national economic growth in the future.”
MTC and BankDhofar will work cooperatively to establish, host, and manage the innovation lab. They will provide mentorship and training for Omani students, staff, local startups and Fintech firms.
In December 2019, Bank Muscat, the leading financial services provider in the Sultanate, revealed that the Central Bank of Oman had approved the institution’s request to establish a $100 million (appr. OMR38.5 million) nationwide, strategic Fintech investment program.
The investment program is reportedly part of Bank Muscat’s strategic growth initiative.Sponsored Links by DQ Promote
OPINION: The epic oil price slump, if prolonged, is bound to prove calamitous for the upstream sector of the financially strapped Middle Eastern and North African producers and those with high production costs.
The consequences will go beyond the energy sector for the more populous nations, where autocratic governments have long used oil windfalls to shield themselves from social unrest through generous handouts and subsidies.
World Bank warning
“As the world struggles with the fear of recession, the Middle East and North Africa could be the hardest hit by what is arguably a perfect storm: the coronavirus spreads to the region and oil prices collapse,” the World Bank says.
“If the decline in oil prices persists, it will erode the fragile macroeconomic and social stability of countries, especially in the Middle East and North Africa, that have been hit by the novel coronavirus.”
Only the wealthy Persian Gulf producers with small populations — such as Qatar, Kuwait and the United Arab Emirates — can be expected to weather a prolonged storm thanks to their enviable financial position.
Iran position precarious
The major losers will primarily be Iran as well as Iraq, Libya Algeria, Oman, and Saudi Arabia.
Iran, whose economy is being seriously squeezed by unprecedented US sanctions against its vital oil sector, will find itself struggling to pay for basic imports as the price collapse will further reduce income from the crude sales achieved through circumventing the stifling sanctions.
Iran’s exports have fallen to a fraction of the 2.5 million barrels per day that the Islamic Republic used to export before May 2018, when US President Donald Trump tore up the landmark 2015 nuclear agreement and imposed draconian punitive measures against the country.
The Iranian Central Bank has just put out an international distress call amid rising cases of the coronavirus outbreak by asking the International Monetary Fund (IMF) for $5 billion in emergency funds to cope with containment.
Iran is fast becoming the global epicentre of the endemic, with more than 500 dead and 11,000 afflicted.
Severe economic problems have led to widespread unrest in the past two years, with the clerical leadership employing heavy-handed tactics to quell dissent.
Iraq set to suffer
Neighbouring Iraq is in the grip of growing political unrest with protesters demanding jobs and end to endemic corruption.
Iraq, Opec’s second-biggest producer, has been without a functioning government for months, disrupting planning and delaying major upstream projects.
Rising tensions between the US and Iran — both of which are fighting for influence in Iraq — have added to the security and political woes.
Algeria, often seen as a hostile destination for international oil companies, will find it difficult to attract fresh investment in the face of the price collapse and social unrest.
Algeria’s Prime Minister Abdelaziz Djerad said the North African country is faced with an unprecedented “multi-dimensional crisis”, while also urging the public to make fewer demands of the government and reduce their presence on the streets.
Libya’s civil war, which has crippled the oil industry, is showing no signs of ending.
Oman has so far been spared social unrest but the future remains bleak since the Persian Gulf sultanate has the highest production costs among regional producers because the bulk of its oil production is ultra-heavy heavy, which needs robust commodity prices in order to compete with other blends.
The oil price rout, arising from the collapse earlier this month of Opec+ talks to persuade Russia to agree to new production curbs, is also a real threat to Saudi maverick ruler Crown Prince Mohammed bin Salman, who has pinned his success as the future king on delivering on an ambitious economic diversification scheme funded by oil money.
Souha S. Kanj | Professor of medicine, head of the Division of Infectious Diseases, chair of the Infection Control and Prevention Program at the American University of Beirut Medical Center
The events related to the coronavirus outbreak are evolving quickly around the world. The situation in the Middle East is probably more complex than elsewhere. The countries of the region are a mix of rich and poor states, with variable GDPs and health infrastructures, and are frequently characterized by political instability and tension. War and violent conflicts have weakened health infrastructure in many countries. The influx of migrants through borders has contributed to healthcare related challenges. The region also has geopolitical and economic ties to both China and Iran, which recently appeared as the epicenters for the COVID-19 outbreak in the region.
There is a striking variation in the number of reported cases by country in the Middle East. Underreporting is thought to be prevalent, whether due to an unwillingness, and sometimes a lack of preparedness, to perform accurate testing. Syria, for example, has not reported any cases, despite its close ties to Iran. Its fragile health system is likely incapable of detecting and responding to the epidemic. The same applies to Yemen.
Some countries in the Middle East have raised the alert level during the past week by imposing school closures and other measures of social distancing. The Saudi authorities have cancelled the Umrah pilgrimage and access to Mecca to nonresidents until further notice. Some Gulf countries are requiring visa applicants to produce a negative test for COVID-19. Other countries are still reporting few cases. In Iran, the response was slow, suggesting an unwillingness to report cases before the country’s elections. Mortality among infected patients in Iran seems to be among the highest after China.
There is little to suggest that Middle Eastern countries have joined efforts to address this global viral threat. The Arab League has remained silent. No meetings have been announced to discuss the evolving situation. Arab countries in the Middle East have so far missed an opportunity to overcome political divisions and closely collaborate to contain the spread of the virus in the region. It might not be too late to engage in coordination, especially from the wealthier states, to provide technical, material, and financial assistance to their neighbors.
Karl Marx once said that history repeats itself, first as tragedy, then as farce. Nothing illustrates this more than the series of baffling policy decisions by Iran’s leadership that have resulted in the largest outbreak of the novel coronavirus (COVID-19) in the region. Despite advances in the biomedical sciences and infectious disease control in the past century, the Iranian government’s response to the coronavirus outbreak has been hobbled by ideological, religious, and economic concerns.
Other countries in the Middle East have followed suit, often prioritizing their non-medical domestic and foreign policy interests in establishing travel bans, quarantines, and other forms of public health precautions. These religious, political, and economic determinants of infectious diseases hark back to the pre-World War I period in the region. Devotional visits to shrine cities and burials at holy sites played an important role in the dissemination of pandemic outbreaks in the Iranian and Ottoman Empires throughout the 19th and early 20th centuries. Similarly, political, economic, and religious interests often took precedence over public welfare in the way quarantines, travel bans, and disinfection policies were established within the empires and on their frontiers. This shows us that historic social and political forces continue to shape the impact of contagions on the peoples of the Middle East.
Basem al-Shabb | Former Lebanese parliamentarian, American Board in general and cardiothoracic surgery
The response to the COVID-19 epidemic in the Middle East has followed the usual script in the region for dealing with calamity. Whereas human suffering invites cooperation in other places, in the Middle East it seams to accentuate cultural and sectarian tensions. As reports of cases were trickling out of Iran, the authorities engaged in denial. Only recently did the Syrian Health Ministry confidently state that there were no known cases in Syria. In Lebanon, flights from Iran, the epicenter of the epidemic, continued unabated and screening at the airport was instituted rather late in the game. Throughout the region, there is an undercurrent of sectarianism. While Iran wrestles with a massive epidemic, Egypt has reported only a few cases and, interestingly, Turkey has reported none. There is hardly any cooperation or exchange of information on COVID-19 among the countries of the Levant.
The epidemic has also touched on religious sensitivities, with some churches in Lebanon insisting on pursuing communion using a single utensil. There is no doubt the coronavirus has brought out the usual regional reactions of denial, delayed responses, myth-mongering, sectarianism, as well as conspiracy theories.
Bader al-Saif | Nonresident fellow at the Carnegie Middle East Center in Beirut, where his research focuses on the Gulf and Arabian Peninsula
The coronavirus outbreak is a potent reminder that the Middle East is no different than the rest of the world. The outbreak has reinforced preexisting tendencies in the region, where it is no secret that systems are largely broken. It has further exposed governmental weakness, evidenced in ambiguous, inconsistent policies. Crisis management and transparency are largely lacking, and so is the faith of citizens in governments’ ability to protect them. Political considerations have triumphed over necessary health directives in various states, putting citizens at further risk, whether by allowing the continuation of flights from high risk areas, such as Iranians traveling to Lebanon, or deferring necessary testing, as in Egyptians traveling to Kuwait. There are notable exceptions, such as Saudi Arabia, where the state has managed the outbreak of the coronavirus and peoples’ reactions to it.
Responses have ranged from denial to fear. Some assume the virus is a conspiracy theory, while others are misinformed about its nature. The virus has also justified racist slurs. With most of the Middle East contracting the virus via Iran, the anti-Iran camp has condemned Iran’s irresponsibility and poor services (ignoring the impact of U.S. sanctions), with some even suggesting that the virus is a Shi‘a phenomenon aimed at infecting the Sunni-majority Middle East.
There has been a third, more measured response among less ideological people. These include business owners, who are concerned about the economic impact of the outbreak; expatriates barred from returning to their homes due to travel bans; families who do not want their children’s education affected by prolonged breaks; and sensible policymakers who have sought to jointly coordinate responses. The outbreak has reminded Middle Easterners of their shortcomings. They patiently are awaiting a breakthrough that would end the coronavirus outbreak, so they can redirect their efforts to addressing other problems long plaguing the region.
Erosion of sandy beaches will endanger wildlife, cause massive losses in coastal cities in the world. Mohammed El-Said, in his Egypt related article titled Egypt to lose 1000 km of sandy coasts due to erosion: Study is by any means not exaggerating the potential impact of climate change on Egypt. The country’s habitable space is very limited to 5 per cent. The rest of the land is uninhabitable desert. The population, therefore, concentrated around the narrow Nile Valley and Nile Delta, with some smaller numbers along the Mediterranean and the Red Sea coasts would want to preserve as much as possible of the seafront.
The world’s beaches represent an interface between land and water, and provide protection for coasts from marine storms and hurricanes, but a new study by the European Commission’s Joint Research Centre indicates that without mitigating the effects of climate change and adapting to it, half of the world’s beaches will be vulnerable to erosion by the end of the century.
Erosion of sandy beaches will endanger wildlife and may cause heavy losses in coastal cities that no longer have buffer zones to protect them from rising sea levels and severe storms. In addition, coastal erosion increases the cost of governmental measures to mitigate the effects of climate change.
In the study published last week in the journal Nature Climate Change, researchers expect erosion to destroy 36,097 km, or 13.6% of sandy coasts around the world, including the Egyptian coast, within 30 years. The situation is expected to worsen in the second half of the century as 9,561 km, equivalent to 25.7% of the world’s beaches are estimated to be eroded.
The study provides forecasts of the shoreline’s shape between the years 2050 and 2100. It links changes in the shoreline directly to climate change based on the concentration of greenhouse gases according to the Representative Concentration Pathway (RCP) approved by the Intergovernmental Panel on Climate Change (IPCC). Thus, the study aims to calculate shoreline changes globally based on the ratio of greenhouse gases in the atmosphere.
In the latest report of the IPCC in 2019, scientists studied the greenhouse gas concentration pathway and expect that, by 2100, if countries in the world do not comply with the terms of the Paris climate agreement, average global sea levels will rise between 61 centimeters to about one meter.
Researchers relied on climate data, models, 82 years’ worth of sea level monitoring, and 35 years of beach satellite imaging. They also simulated more than 100m storms and measured their global coastal erosion.
Based on the RCP of greenhouse gases, the study assumes two scenarios for melting ice surfaces. According to the first scenario, if the world continues to emit carbon at the current rate, sea levels will rise by about 80 cm, which means the coastline will decrease by 128.1 meters, and threatens to sink 131,745 km of beaches.
According to the most optimistic scenarios, sea levels will only rise by 50 cm by 2100, and the average coastline retreat will be 86.4 meters if governments adhere to international agreements to reduce emissions and reduce carbon dependence. According to the results of the study, up to 63% of the world’s low coastal areas will be threatened by flooding due to sea level rise and severe storms.
“Climate change will exacerbate the effects of coastal erosion processes, which threatens densely populated areas,” said Michalis Vousdoukas, a researcher at the European Commission’s Research Centre and lead author of the study.
He added that in the best scenarios, Egypt will lose between 35.1% to 50.5% of its sandy beaches due to erosion, which means the erosion of about 1,000 km of Egyptian sandy beaches. The percentage is likely to be even higher in countries like Saudi Arabia and Libya.
Hisham Elsafti, a coastal engineering consultant, and instructor in coastal engineering at Braunschweig Technical University in Germany, explained that according to the study’s expectations, the coasts of the Nile Delta will retreat by more than half a kilometer at the end of the century due to geological and hydromorphological factors.
But Jeffrey S. Kargel, a senior research scientist at the University of Arizona, believes that although the methodology of the study is good and its conclusions are valid, it did not take into account some detailed changes. These changes include the sediment supply and the increase in the production and transport of sand and silt due to the increased melting glaciers, increased surface runoff of corrosion and more sediment supply from expanded agricultural areas, increased sediment supply from dam construction, and reduced sediment transport due to dams in many parts of the world.
Kargel explained that the melting glaciers do not directly affect Egypt, but affect places like Greenland and Alaska. “Construction of dams is the most important for Egypt due to the construction of the High Dam in Aswan, and then there will be a giant reservoir for the huge dam in Ethiopia,” he said.
He added that “when the silt is blocked by reservoirs, this will be an obstacle to the construction of the delta areas, and thus the delta will drop and seawater will submerge its coast with its cities and villages, which will represent a major problem for Egypt.” But he believes that the Egyptian Delta, despite the problems it faces, is “lucky” because it is not subject to hurricanes.
A previous study by the American Geological Society, published in May 2017, indicated that Egypt is one of the countries most affected by climate change, and that between 20 to 40 km of the coast of the Nile River Delta will be flooded with seawater by the end of the century, due to Sea level rise.
Vousdoukas added that the UK expects to lose 27.7% of its sandy beaches, according to the best estimates, and 43.7% according to worst case scenarios. Australia is also expected to be the most affected, as about 15,000 km of its beaches are at risk, followed by Canada as one of the most affected countries, then Chile, Mexico, China, and the United States. It is also expected that more than 680 million Indian citizens living in the low-lying coastal region will be affected by the coastal erosion and climate change.
Glimmer of hope
“The study provides first-of-its-kind forecasts regarding sand beach erosion, taking into account human interventions as well as the effects of climate change and natural factors,” said Vousdoukas. The researcher explained that there is still a glimmer of hope as it can reduce greenhouse gas emissions to prevent 40% of the coastline retreat, but this requires an international commitment to the Paris Climate Agreement and related protocols, and requires some coastal protection measures to protect populated areas.
Elsafti, however, believes that Egypt should work on two main axes to avoid the negative effects of climate change and protect the beaches. The first is the effective contribution to calls to reduce greenhouse gas emissions, and asking major industrial countries responsible for the problem to contribute more effectively to solving the problem by increasing contributions in initiatives such as the Green Climate Fund, which is already participating in funding studies and work to protect Egyptian beaches.
“The second axis is a scientific axis, as Egypt must increase the funding of scientific studies that cross the disciplines required to find engineering solutions suitable for the Egyptian environment and prepare to change the planning of cities and coastal areas and their uses to adapt to the effects of climate change,” Elsafti said.
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.
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:
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.
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