The MENA region is somehow more vulnerable to the effects of climate change than elsewhere and it should take this opportunity to focus on its socio-political among many other things institutional arrangements. An IFRC’s Press release on how the Ukraine conflict tends to intensify existing humanitarian crises in the MENA region. This article follows on how Cascading Climate Effects in the MENA are impacting all and it should be best through an inclusive model of governance for its obvious argumentations towards some democratic development in the said region.
Iranian Red Crescent Society teams install safe water points in the country in March 2022 to help communities cope during the ongoing severe drought. Photo: Iranian Red Crescent Society
16 June 2022, Beirut – The Middle East and North Africa (MENA) region continues to face multiple and complex crises from conflicts to climate change and displacement. The International Federation of the Red Cross and Red Crescent Societies (IFRC) today issued a rapid assessment report focusing on the impact of the conflict in Ukraine on the humanitarian situation in the MENA region.
The findings of the assessment confirmed that the conflict intensifies the impact of pre-existing crises and trends and increases the vulnerability of most countries.
Rania Ahmed, Deputy Regional Director of IFRC MENA said: “The global economic and security impact of the conflict in Ukraine could be the proverbial last straw that breaks the camel’s back, pushing already fragile countries in the MENA region over the tipping point.”
The assessment’s main findings show that food security and livelihoods are the two most affected sectors. Currently, there are 56 million people in need of food in the region. Data show that the number could increase by 25% over the next six months because of the global food price index increase that has hit a record high. Twelve countries from the MENA region have experienced a dramatic increase in the price of basic food items. In Lebanon, prices have increased by 75-100%. In Iran and Yemen prices went up by 50-75%. Currently, five million people are facing food insecurity in the region. An estimated 1.9 million could slide into hunger.
MENA countries source up to 85% of their wheat from Ukraine and Russia. The agriculture industry in the region has already been severely affected by a combination of disrupted supply chains, water scarcity, and increasing temperatures.
With donors’ attention turned towards the Ukraine crisis, there is a risk that the humanitarian funding for MENA countries might drop. Lack of access to donor funding will only amplify the existing humanitarian crisis in several MENA countries. For the millions of Palestinians, Lebanese, Yemenis, Syrians, and others who live in countries experiencing conflict, catastrophic economic meltdowns, and increasing humanitarian needs, this would be equivalent to shutting down critical life support.
Finally, energy and oil-importing countries are experiencing additional social stress as they witness a 25-75% increase of fuel prices. In Syria and Yemen, fuel shortages and a lack of electricity is already severely impacting the delivery of basic services. The compounded crisis trends in Lebanon, including the sharp increase in energy prices resulting from the Ukraine crisis, have the potential to push the country over the tipping point to become a “critical crisis”.
Methodology: This rapid assessment aims to contribute to the ongoing analysis and scenario development to anticipate, prepare for, and respond to evolving crisis trends in the MENA region, with specific considerations on how the Ukraine conflict is a risk multiplier to existing crisis trends. The assessment was carried out between 25 April and 3 June 2022 using secondary data and a perception survey of 24 representatives of National Societies and IFRC Heads of Delegation.
Start-ups are these days rewriting the big MENA growth. A story that sums up the new trend at this conjecture in business life in the MENA region. Most importantly, it is showing the way of a hydrocarbon-based economy moving into a more diversified one . . .
The above featured image is of World Economic Forum that explored the same topic back in 2019. Here is the story as it stands in 2022:
Saudi start-ups rewriting the big MENA growth story
Start-ups from across the Middle East and North Africa (MENA) had raised nearly $375 million during the past month, with the Saudi firms taking a sizeable chunk of the pie, netting $219 million across 23 investment deals in February, according to a report.
With 58% of overall funding in the wider region going towards Saudi Arabia, it is no surprise to hear that headcount has grown by 20% within the kingdom’s start-ups over the past 12 months, said the report by leading recruitment consultancy Robert Walters Group, adding that this figure is expected to grow further this year as the government continues to create the ideal environment for start-up growth and international investment.
The competitive recruitment landscape between big corporates and start-ups continues to grow, with approximately 3 times the number of jobs posted vs available talent.
Faisal Saqallah, the Consultant from Robert Walters Saudi Arabia, shares his thoughts on why start-ups are winning the race on talent.
The Career Accelerator
With relatively flat structures and hands-on founders and CEOs – new starters can find themselves lining up into the senior leadership team from day one, explained Saqallah.
By taking on several different responsibilities and working closely with senior members of the team, start-up environments enable you to prove your worth early on, as well providing an opportunity for your work will be recognised if it has had a direct impact on the business, he stated.
Unlike within corporate structures, leaders will be able to clearly see your involvement in a project’s initial stages to completion, and as a result, the rate of advancement at start-ups tends to be much faster.
According to the Robert Walters Report – Act Like a Start-Up and Win the War on Talent – 50% of professionals in Saudi Arabia are interested in working for a start-up for their next career move.
“This is not surprising therefore to see that our survey found that over half of professionals (52%) would be willing to take a pay cut and join a start-up if they saw an opportunity to progress much quicker than they would do within a corporate set-up,” stated Saqallah.
“After any period of economic change, we typically see a wave of entrepreneurial or start-up activity – and so it doesn’t surprise me to hear of the success of this sector, so much so that Saudi Arabia now ranks sixth in global entrepreneurial competitiveness,” he stated.
“But what is most interesting is how these relatively-new 10-30 person companies are managing to draw some of the county’s top talent away from established firms who typically offer much higher levels of job security,” noted Saqallah.
“Post pandemic we have seen a significant shift in what professionals want from their employer – with purpose, culture, and people, rated above competitive pay and the well mapped-out corporate ladder,” he added.
Start-ups are designed to have high growth potential – and so it is not surprising to see that on average decisions are processed 4x quicker in a start-up than within a large firm (250+).
The changing and fast-paced nature of a start-up will keep employees on their toes, encouraging them to develop new skills as they go, and push boundaries beyond the initial job description.
Working for a start-up, you’ll understand how the whole company works and develops commercial acumen not expected of you when lower down in corporate structures. Some start-up leaders argue that these on-the-job business lessons are in fact better than an MBA.
Our survey found that 33% of professionals are leaving their corporate jobs in order to ‘try something new,’ with a further 15% looking to reskill.
Being a start-up team member comes with great responsibilities. No matter what your title is, your work will make an impact on the company’s growth and success – and so in turn this will make you feel like the job you’re doing has an actual purpose and is a huge motivation.
In fact, a third of professionals (34%) state that the reason they move to a start-up is for challenging and interesting work – with many stating that the skills they adopt in self-management and task prioritisation then cross over into their personal life.
According to the Robert Walters, working for a fast-growth start-up can be an intense experience, so you’ll inevitably become more proactive and ambitious outside of work too.
You’ll be constantly thinking about how to improve things, be more aware of problems and how to solve them and become more open to new cultures and ways of thinking. You’ll also learn to love challenges and even look for them!, it stated.
True Team Spirit
Almost half of professionals (42%) state that the most important value when looking for a future workplace is ‘colleagues and culture that inspire them to do their best – that’s why the company culture at start-ups is something to be valued.
Due to their smaller size, start-ups tend to foster a close-knit, collaborative environment, that encourages people to help where they can on tasks outside of their original remit.
“You’ll be surrounded by highly hardworking, talented, and ambitious people willing to do the impossible. There is a huge motivation to learn from others and contribute with your own knowledge and experience,” explained Saqallah.
Start-ups often favour a fluid structure over a rigid corporate-inspired hierarchy, enabling open discussion and co-operation between all team members.
It is not surprising then to hear that 30% of professionals state that the most appealing thing about a start-up is the open & effective management structure.
Talent the only criteria
Start-ups have a core focus of finding the very best talent who can help achieve their ambitious goals, and as a result, remove any sort of socio-economic or geographical barriers in order to find their stars.
As a result within a start-up, it is not surprising to come across all kinds of co-workers, from all kinds of nationalities, backgrounds, and ideologies – and due to the small nature of the teams, there will naturally be ample cross-over working with colleagues with different skill sets or working styles.
This strong multicultural environment can open your mind beyond work and tasks. It also leads employees to have a global vision.
And diversity doesn’t just rest with the people, it is safe to say that almost no two days are the same within a start-up. Typically, most members of the team have to ‘juggle many hats and take on duties outside of their specific role to contribute to the success of the wider business.
The diversity of tasks helps you to develop new skills very quickly, added to that you will often be learning directly from the founder of the company and/or senior employees.
This an invaluable opportunity when you are in the early stages of your career. Not only will this keep you stimulated in your day-to-day role, but it will also give you the opportunity to find out what you are most interested in and discover what you are best at.
Innovation is the key
Start-ups are different from traditional businesses primarily because they are grounded on disruptive innovation, created to address a perceived ‘problem’ in the market.
Joining a start-up means adopting an ‘out of the box’ mindset – an ability to think on your feet and get creative with smaller budgets and fewer resources.
Autonomy is not considered a perk within a start-up but a given – in fact, it is the reason why 28% of professionals leave a corporate job to join a newly established business.
However, it is not all ‘small-time,’ in order to aid your creativity you’ll find yourself learning and using the most modern and innovative tools and platforms on a daily basis – whilst shaky to start off with you’ll soon start to embrace and speak the ‘start-up language’ in no time!
Many start-ups have an ‘exit strategy’ in mind, which means you will be working towards an ambitious deadline right from the get-go, according to Robert Walters Group.
Growth targets will be ambitious, but if achieved by the team then they stand to cash in from significant rounds of funding as shares are often offered as part of job packages as a way of competing with corporate pay, it stated.
At a start-up, your hard work can payback sometimes 10x the amount you’d get in yearly corporate bonuses within 5-7 years of joining a fast-growth start-up. The key here is to join a business whose product and vision you will truly believe in, it added.
In response to the current local economy, the UAE has decided to launch the first federal corporate tax on business profits from June 2023. Hadeel Al Sayegh and Moataz Mohamed elaborate on the details.
The image above is of a general view of Sheikh Zayed Road in Dubai, United Arab Emirates, December 08, 2021. REUTERS/Satish Kumar/File Photo
UAE to launch first federal corporate tax on business profits from June 2023
DUBAI, Jan 31 (Reuters) – The United Arab Emirates (UAE) on Monday said it would introduce a federal corporate tax on business profits for the first time starting from June 1, 2023, although it kept the rate low, at 9 percent, to maintain its attractiveness for businesses.
The Gulf Arab oil exporter, a magnet for the globe’s ultra-rich, has long benefited from its tax-free status to carve out a role as an international commercial, energy and tourism hub.
Much of this tax-free regime, including no personal income tax, remains. But the Finance Ministry said it was launching corporate tax to align with international efforts to combat tax avoidance, as well as to address challenges arising from the digitalisation of the global economy.
The new tax will be levied on all corporations and commercial activities in the country, except for the “extraction of natural resources” which will remain subject to taxation at the emirate level.
A ministry statement said the new regime implies a standard statutory tax rate of 9%, as well as a 0% rate for taxable profits up to 375,000 dirhams ($102,107.50) in order to support small businesses and startups.
The ministry added that the move would pave the way for the introduction of a global minimum tax rate that would apply a different corporate tax rate to large multinationals that meet specific criteria.
It did not elaborate, but this appeared to be a reference to new rules agreed by the Organisation for Economic Cooperation and Development in October and 136 countries including the UAE to ensure big companies pay a minimum tax rate of 15%. Read more
The move to a tax of 9% chimes with the country’s efforts to diversify budget revenues to reduce reliance on petroleum, for decades the mainstay of the economy.
“The UAE continues to make progress in diversifying its budget revenue away from oil, and a corporate tax fits into this strategy. The tax rate remains low by global standards,” said Khatija Haque, chief economist at Emirates NBD.
“With the international tax treaty signed at the end of last year, many corporates may still have to pay a top-up tax in their country of residence. It is positive for the UAE to earn the tax on the business conducted and income sourced domestically,” said Monica Malik, Chief Economist at Aby Dhabi Commercial Bank.
In 2018, the UAE introduced value-added tax on most goods and services at a standard rate of 5%. The UAE imposes a 20% tax on branches of foreign banks operating in the country, and on companies with concession agreements in the oil and gas sector of up to 55% at the emirate level.
Businesses in the UAE are exempted from paying taxes on capital gains and dividends received from shareholdings, the ministry said.
The new programme left intact the exemption for individuals from income tax, capital gains tax on real estate and other investments, and other earnings that do not come from a business.
The UAE corporate tax regime will continue to honour the corporate tax incentives currently being offered to free zone businesses that comply with all regulatory requirements and that do not conduct business with mainland UAE, the ministry said.
WESTBURY, New York — The High Atlas Foundation is helping Morocco’s local communities determine how they choose to develop their land and grow out of poverty sustainably. Like those in the northern Atlas Mountains, Morocco’s most vulnerable communities have long suffered from water scarcity, shaky access to land and unregulated grazing rights. These hardships make it difficult for many individual planters to harvest profitable yields on their produce and further strain their labors. Also, their reliance on traditional and overplanted crops like barley, corn and dates deliver low profits. Additionally, they exasperate a low diversity of fruits and vegetables in the poorest of the nation’s regions. While Morocco’s red fruit production saw an increase of 84% last year, many of the nation’s poorest farmers were not included in the agricultural boom. Yet, one organization is working to reverse this in a new sustainable development model, improving agricultural development in Morocco.
The High Atlas Foundation
Peace Corps volunteers who served in Morocco founded The High Atlas Foundation in 2000. They committed themselves to sustainable development through several human development initiatives. These included sustainable agriculture, education, health and women’s empowerment. Working with local and international institutions, the High Atlas Foundation works to facilitate development through participatory planning.
The Borgen Project spoke with Dr. Yossef Ben Meir, The High Atlas Foundation’s Founder and President, in an interview to learn more about the High Atlas Foundation’s approach to sustainable development and advocacy. “I’m a former Peace Corps volunteer who served in Morocco in the early 90s, and others, having gone through that two-year experience, were moved in terms of the severe life challenges of particularly rural communities,” said Dr. Yossef Ben Meir. “A number of us founders served in mountainous areas. I served in the south side of the High Atlas region.”
Agricultural Land Struggles
Unfortunately, 70% of agricultural land only generates 10 to 15% of agricultural revenue in rural regions, and 80% of arable lands are located in arid or semi-arid areas. Still, only 15 percent of the country’s lands are irrigated. Ben Meir says the dependence on the traditional subsistence approach to growing barley and corn keeps people down. He says the potential for waterborne diseases, high unemployment and a lack of access to basic government services is a barrier for rural families. The transition from barley and corn to more lucrative fruit trees and medicinal plants may have challenges.
“80% of rural incomes comes from agriculture,” said Ben Meir. “Most people who experience poverty in Morocco are in rural places and overcoming this dependency on or generational reliance on barley and corn. It’s one of many factors that have to be addressed in the agricultural value chain, but one of them is the generation of fruit trees so that farmers and farming families can make that transition.”
Most recently, the foundation is taking several steps to foster deals to reallocate government land and organize a community-based approach to fruit tree planting, aiding agricultural development in Morocco. Today Ben Meir and his teams help manage 13 tree nurseries that care for over 1.6 million saplings. He says a modest investment into the way planters harvest their crops can profoundly impact people’s lives. It allows more locals to better participate in the local economy.
“It’s also the exposure that we had to community planning,” said Ben Meir. “The beneficiaries of the projects when they determine the project design and form and location and what it is and how it will be managed and evaluated when they’re in control of it, it has a longer life and sustainability if you will.”
Ben Meir says these experiences embody the foundation’s original mission to facilitate participatory community planning towards development initiatives. In this sense, local communities play a crucial role when creating and implementing a project. The foundation uses a process called Imagine, a four-day or 32-hour program of personal and group introspection. Afterward, multiple sessions focus on the community planning of projects. They then implement development initiatives requiring accelerating revenue streams and beneficiaries. For example, the monitoring and certifying of trees to generate carbon offset credits. They can commercialize and reinvest in their projects. Teams like these allow the foundation to generate enough revenue to be financially stable alongside other advocacy efforts.
The High Atlas Foundation understands the importance of creating sustainability projects. For instance, technology like renewable solar pumps helps power the 13 nurseries, facilitating a zero-waste version of sustainability. Ben Meir says the foundation takes zero waste extremely seriously, not only in terms of energy but also in biomass. For example, something as simple as renewing wasted walnut shells could further progress the foundation’s goal.
Recently The High Atlas Foundation implemented the USAID Farmer-to-Farmer Program in Morocco. The program helps create opportunities for cooperatives along the agricultural value-chain by using local and U.S. experts, improving agricultural development in Morocco. Additionally, it created the Religious and Ethnic Communities project, an interfaith community organization that shares stories and narratives that capture the human experience of intercultural exchange and interfaith relationships. Ben Meir says these experiences are an inescapable aspect of Moroccan history and life. Alongside their development projects, they can pave the way for interfaith and intercultural narratives to flourish like their trees.
An Analysis dated 7 August 2020 by Dr Tankut Oztas is concerned by The Levant and North Africa with a challenging statement like: on the verge of economic malaise? The pandemic-induced crisis is expected to exacerbate poverty, deepen inequality and constrain households’ access to basic needs, including health service.
ANALYSIS – The Levant and North Africa: on the verge of economic malaise?
ISTANBUL: The spread of COVID-19 undoubtedly has had a catastrophic impact on the most vulnerable communities of the world. According to a recent World Bank report, the Middle East and North Africa (MENA) region is ranked as second-lowest among all regions in the overall Global Health Security Index, and it comes last in terms of both epidemiology workforce and emergency preparedness and response planning. Without an effective and coordinated set of policies to achieve a swift economic recovery, the region is highly likely to suffer from greater political instabilities and become a breeding ground for terror groups.
The COVID-19 outbreak has exacerbated these pre-existing vulnerabilities and risks in the widely-mismanaged economies of the MENA, where medical systems are under-resourced and much-needed infrastructure either destroyed or lacking.
A range of harsh anti-COVID-19 measures such as self-isolation, social distancing, and lockdowns, including total curfews and international travel restrictions have been implemented by governments to control the spread of the virus and protect lives.
These preventive measures, however, led economies across the region to experience severe supply and demand shocks. The most recent regional economic outlook reports published by both the World Bank and the International Monetary Fund (IMF) forecast that regional economies would most likely experience a sharp economic fallout by –4.2 per cent and 4.7 per cent in 2020, respectively.
Still, the real socio-political and economic impact of the COVID-19 pandemic in the MENA remains highly uncertain and will strictly depend on the duration of the outbreak and the effectiveness of the policy responses developed by each nation.
The current predictions, however, suggest that all critical macroeconomic indicators such as fiscal and current account balances, foreign reserves, and the inflow of foreign direct investment will be distressed as a result of the crisis. The pandemic-induced crisis is expected to exacerbate poverty, deepen inequality and constrain households’ access to basic needs, including health services.
The economic repercussions of the COVID-19 pandemic effectively forced almost all countries in the region to request financial assistance from the IMF or other financial institutions to strengthen their economic position and prevent the possibility of a prolonged economic recession. As a result, regional economies have become heavily dependent on the reform directions of the IMF, World Bank, and other investment banks.
Socio-economic and political tensions remain a distinct possibility in the post-pandemic era if policy responses fail to meet the demands of the majority and set a path for swift economic recovery. Countries such as Lebanon, Jordan, Palestine, Egypt, and Tunisia already have debilitated capabilities. Persisting socio-political and economic hardship exacerbated by the COVID-19 pandemic may lead to a vicious cycle of economic malaise.
The same outcome applies to the only two oil-exporting countries of the region, Iraq and Algeria. Their economies were hit by the complete halt of economic activities due to the pandemic and have also been severely affected by the crash of oil prices. A similar assessment is applicable to war-torn countries of the region, Syria and Libya too. Though their economic outlook is linked to a sustainable political order and strong security environment, the spread of the virus and its humanitarian and economic costs are extra burdens on the wellbeing of communities living in these countries.
The only countries in the region with a relatively positive socio-political and financial outlook are Israel and Morocco. While their economies are experiencing the economic consequences of the pandemic, their macroeconomic variables are in a better position compared to their peers. Their public and externals debts are relatively lower in comparison to other nations in the region.
Nevertheless, every country will experience the heavy burden of issues such as collapsing global trade, low commodity prices, major capital outflows, and healthcare-specific challenges inflicted by the COVID-19 outbreak. The crisis is dealing a heavy blow on sectors such as tourism, export companies, and small and medium-sized businesses, which employ the largest share of the workforce and generate a considerable share of the revenue streams for the region’s economic development.
A reduction in income from these sectors, as well as remittances and foreign investment from the oil-rich Gulf countries, subsequently hampered the foreign reserves and deepened the current account deficit across the region as a whole.
Against this challenging backdrop, a range of economic recovery packages have been announced by the governments to mitigate the economic repercussions of the COVID-19. The majority of them are aimed at helping the most hard-hit sectors and communities through temporary tax relief, cash transfers or cheap financing.
The uncertainty about the real economic impact of the pandemic, however, has complicated the policy response. Many of these economies have limited fiscal and external debt capacities. The Lebanese government, for instance, has the highest external debt in the region with approximately 170 per cent of its GDP. Jordan, Tunisia, Egypt and Iraq follow Lebanon with external debts of 97, 90, 87.2 and 80 per cent of their GDP, respectively.
Ultimately, many of these economies had already been battling with high poverty, political instability, and poor healthcare infrastructure; hence the historic economic downturn provoked by the novel coronavirus will aggravate existing economic and humanitarian challenges. The region already has the world’s highest youth unemployment, and it hosts countries that have weak security institutions.
In the period that lies ahead, if the geostrategic vulnerabilities and risks continue to amplify across the region without a stable political leadership, effective civil service, and a well-targeted set of economic recovery programs, the region will likely experience a prolonged economic recession and an increased risk of social unrest.
[ The writer is a researcher at the TRT World Research Centre. He holds a PhD in International Political Economy from King’s College London and specializes in global security, geopolitical risks and the politics of transnational economic affairs ]
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