Jacob Weiss – Global Threat Analyst – MENA for global travel risk management and international medical and security assistance provider, Healix International, provides an insight into the impact of COVID-19 in the Middle East and North Africa.
The novel Coronavirus (COVID-19) has spread to every country in the Middle East and North Africa (MENA) region, with the impact likely to be immediate and long-lasting. Before the first case of COVID-19 was reported in the region, large-scale protest movements fuelled by economic inequality had already spread across Iraq, Algeria and Lebanon, and conflict continued to rage in Iraq, Yemen, Libya and Syria. The COVID-19 outbreak will bring both political and economic changes to the region, which in turn have the potential to further worsen the already precarious security environment across the region.
Poor economic conditions have consistently been one of the most important primary drivers for unrest in the MENA region and the most immediate impact of COVID-19 will likely be on the economy. Tourism and the oil trade are integral parts of economies across the region. Tourism alone is worth between 6-8% of the GDP in the majority of the countries in the region (including in rich oil-producing countries such as Saudi Arabia) however in Egypt tourism contributes as much as 20% of the GDP. While the wealth received through oil revenues in the Gulf is well known, the oil trade also contributes significantly to non-oil producing countries in the region through expatriate remittance, particularly with the large Lebanese and Egyptian workforce in the Gulf.
A global fall in oil prices was indirectly caused by COVID-19 after a drop in demand from China led to Saudi Arabia cutting export prices in March. The fall in oil prices will cause a contraction in economies across the oil trade-dependent Gulf (Saudi Arabia, Oman, Kuwait, Qatar and UAE) with the IMF predicting a loss of more than $230 billion in lost annual revenue. Likewise, the paralysis in the tourism industry as a result of border closures and travel restrictions will have just as dramatic an impact on economies of the region; in Tunisia alone, a loss of $1.4 billion is expected and up to 400,000 workers in the sector are predicted to lose their jobs.
The IMF predicts that as a whole, economies across the region will contract roughly 3.3%. While the Gulf economies are predicted to bounce back in 2021, outside of this sub-region the pain will be longer-lasting. Outside of the Gulf, governments do not have the funds to invest in fiscal stimuli packages and thus will be forced to turn to international aid packages increasing foreign debt or tap into already depleted foreign reserves. A substantial period of austerity is to be expected with public services facing huge cuts.
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The deterioration in socio-economic conditions - the UN expects that roughly 8.3 million people will fall into poverty across the region by the end of the year - is likely to lead to significant periods of unrest in the second half of 2020. While large-scale protest movements in Algeria, Iraq and Lebanon that began in 2019 and carried over into the first quarter of 2020 have temporarily ended due to state-led curfew restrictions and fears of virus transmission, the drivers behind these movements will be exacerbated by the impending economic downturn.
Towards the end of 2020, when it is likely that restrictions on movement will be lifted, these protest movements are likely to be renewed with increased vigour and will likely continue into 2021 if key demands are not met.
Another potential driver for unrest is the increasingly authoritarian nature of governments across the region. While increased governmental powers are likely to be seen as justified in the short-term, states have already begun to exploit increased powers for political purposes. Iran and Egypt have increased repression of the press, using emergency laws to shut down all journalists who report anything critical of the government. In Algeria, the authorities have continued to arrest leaders of the domestic protest. Israel and Iran have given their intelligence services the ability to track the mobile phones of those suspected of having the virus. The increased use of authoritarian measures during the crisis could lead to an unwillingness from governments to relax these powers after the crisis ends. The resulting increase in authoritarianism could lead to large-scale popular unrest, similar to that of the 2011 Arab Spring.
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In Libya, despite renewed calls for a ceasefire by the United Nations (UN) over fears of the effects of a substantial outbreak of COVID-19 in the war-torn country, the conflict shows no sign of stopping. The increased focus of international leaders on the crisis means that less time is being devoted to mediating a ceasefire. Domestic and international actors in the conflict may also use the distraction of the international community to make increasingly ambitious strategic decisions. Likewise, in Yemen the conflict is unlikely to be unaffected by the outbreak. The Iran-backed Houthi rebels have ignored a unilateral truce announced by the Saudi-led military coalition on 7th April and conflict on the ground has continued.
Exacerbated tensions as a result of the coronavirus outbreak will feed and further entrench the proxy conflict waged by Iranian-backed Shia militias across the MENA region. Iran has repeatedly claimed that US sanctions constitute economic terrorism due to its impediment of medical aid during the COVID crisis. The tactic of channelling domestic blame towards the US, whether justified or not, will further entrench anti-US sentiment across the region and potentially mobilise further support for its proxy militias present in Lebanon, Yemen and Iraq.
The scale of 2020’s COVID-19 outbreak means that no country will escape its consequences, however, in the already unstable MENA region, the effects will be amplified. Economies will suffer, wars will continue and large-scale unrest will resume.
Healix International is a global provider of travel risk management and international medical, security and travel assistance services. Working on behalf of multinationals, governments, NGOs and insurers they look after the welfare of expatriates, travellers, offshore workers and local nationals in every country of the world.
To learn more about Healix International please visit: www.healix.com