A Lasting Peace? – Middle East Socio-Economic Overview

1. Table of Acronyms  

2. Introduction

After a series of intensive diplomatic talks, a ceasefire agreement was reached putting an end to the military conflict in Southern Lebanon. As soon as planes stopped dropping bombs on Lebanese soil, a massive chunk of the displaced started returning back to their homes. Although calm is reestablishing itself within Lebanon, the situation remains to be deplorable in Gaza as violence continues to claim lives. It is as though the occupier’s policies and intentions towards what remains of Palestine are continuing unabated.

3. The Socio-Economic Situation

Egypt

The Central Agency for Public Mobilization and Statistics in Egypt announced that the unemployment rate in the country has risen to 6.7 percent in the third quarter of 2024, compared to 6.5 percent in the previous quarter. For years, the Egyptian economy has been going through complex challenges resulting from global fluctuations and internal pressures, such as accelerating inflation, which has greatly affected the purchasing power of citizens and the prices of basic commodities. Although the 0.2 percent increase in the unemployment rate during the last quarter appears slight, it may reflect a deeper trend and structural problems in the labor market. High unemployment rates affect consumption rates and economic growth in general, as the unemployed suffer from difficulties in meeting their basic needs, which contributes to the reduction of demand for goods and services. Since the beginning of 2024, the unemployment rate have been characterized by a kind of relative stability, but the recent rise to 6.7 percent in the third quarter reflects new effects on the local economy, which may be also related to global inflationary pressures, the effects of monetary policies, and the increase in the cost of living, which in turn affected the ability of companies to expand and provide new job opportunities.

As the situation in the region is not helping Egypt to find immediate solutions to boost the economy, President El Sisi issues a statement warning that Egypt may have to re-evaluate its program with the International Monetary Fund, if international institutions do not take into account the unusual regional challenges facing the country. For the time being it is trying to implement quick fix solutions such as  Egypt raising the prices of a wide range of fuel products for the third time this year, with diesel and gasoline prices increasing by between 11% and 17%. In June, Egypt had raised the price of subsidized bread by 300%, and Prime Minister Mostafa Madbouly said in July that fuel prices would gradually rise until the end of 2025. According to the President, Egypt lost between 6 and 7 billion dollars in revenues during the past seven to 10 months, and the situation may continue for at least another year. As for Economic commentors and analytics, only a major shift in policy will guarantee enduring recovery and better resistance to future financial shocks.

Jordan

Accoring to economists, Jordan faces challenges in terms of high energy and gas prices, high unemployment rates, and a decline in foreign direct investments during the first quarter of this year, which was followed by the cessation of investment projects on which Jordan relied a lot.  Additionly, there was a change in the nature of the consumption pattern of Jordanian society and the trend towards preserving liquidity. In anticipation of unexpected events, including the continuation of the [Israeli] war in Palestine and Lebanon, and perhaps a broader regional war. In the same context, Fitch Credit Rating Agency expects Jordanian economic growth to be affected during the current year 2024, as a result of a number of geopolitical risks in the Middle East region. The agency added in its report that the real GDP growth rate in Jordan is expected to reach 2.2% in 2024, down from 2.6% in 2023, and lower than the pre-pandemic average of 2.4%. In line with developments of the situation and the government’s attempts to confront it, economists view the most prominent alternatives to reduce the current negative impact on the economic system, is to develop economic sectors such as agriculture and industry which can guarantee continued economic and livelihood performance. To implement such an approach, it requires policies that support the consumption shifts of Jordanian citizens towards national goods and local production, with the aim of strongly supporting the industrial sector. Although the government had made positive strides in that regards, economists agree that there is more room for growth. For the time being, Jordan is conituing its push to promote forein investment within the country so that to strengthen the economy. The most notable instance is the effort of his Majesty King Abdullah during a meeting with Arab and foreign investors and representatives of major companies at Al Husseiniya Palace, to encourage international stakeholders to invest in Jordan. He did so by also stating that the country is continuing to implement administrative modernisation plans to improve the business environment and attract investments.

Iraq

During this month Iraq was able to score two major successes that can have an impact on the economy. Iraq conducted its first nationwide census in over three decades on November 21-22, a long-awaited effort expected to reshape the country’s economic policies and social planning. Although some critics were quick to criticize the fact that any updated information won’t make a difference as the political tensions, logistical hurdles, and systemic issues are the issues that primarily should be addressed, the endeavor should allow the leadership to enact more precise reforms and policies that would match the reality. Also on the information front, the Iraqi Ministry of Trade announced the issuance of the commodity structure for exports and imports, which provides an integrated database on the volume of trade exchange between Iraq and all countries, in addition to issuing other guides on Iraqi exports and chemical, textile and mineral products. The Iraqi Ministry of Commerce launched the Iraqi Exports Guide, which collects basic details about Iraqi factories and companies with the aim of supporting exports in Iraq and providing export support to Iraqi and non-Iraqi traders and investors. The guide includes information about large, medium and small factories and manufacturing units so that the target groups of investors and exporters can have smooth access to Iraqi products. The goal of this move is to support Iraqi exports, to encourage and increase the export volume.

Lebanon

During November, the Occupier intensified its bombardment of Lebanon before a ceasefire came to effect on the 27th of November. As soon as news started to circulate about the declaration, internally displaced people started packing their belongings to return to their homes. Unfortunately, many were unable to return due to the presence of the Occupier’s forces which in some instances fired on them. Nevertheless, the current period is marked with less hostility and a relief of economic activity. Although the economic cycle is yet to return to normalcy because of fears that the war might restart, there is no doubt that the end (or pause) in fighting allowed municipalities to clear debris and rubble, and temporarily fix critical roads so that vehicles can traverse them and deliver goods to various areas. Moreover, airlines have mildly increased their traffic to Rafik Hariri Beirut Airport. However, the fact remains: the economy is still in tatters. The cost of physical damages and economic losses due to the conflict in Lebanon is estimated at US$8.5 billion, according to a new World Bank report that provides an initial assessment of the impact of conflict on Lebanon’s economy and key sectors. The Lebanon Interim Damage and Loss Assessment (DaLA) finds that damages to physical structures alone amount to US$3.4 billion and that economic losses have reached US$5.1 billion. In figures published on 14 November, the World Bank said there are around 99,000 housing units which have been partially or fully destroyed in Lebanon, with damage to the housing sector amounting to around $2.8 billion. However, Amin Salam, Lebanon’s minister of economy, estimates that actual losses to Lebanon’s economy are over $20 billion, and that reconstruction may require between $20-30 billion. Currently, every Lebanese is hoping for an economic rebound by electing a new President in the coming period. Yet, even this remains a problem as it is not really known whether all parties will agree upon a candidate. Moreover, the situation in the South, despite the mass return of people, remains to be precarious and Is prawn to the resumption of the conflict by a considerable chance.

Palestine

Although a cease fire deal has been put into effect between Lebanon and the Zionist entity, the war in Gaza continues to claim daily lives and to choke the Palestinian economy. It is a though the government of the entity is working on several fronts to eliminate the Palestinian cause and remove the name of Palestine from existence. So far, 45,000 have been killed and 100,000 injured, most of which are women and children and it is slowly succeeding in eliminating any aspects of life inside Gaza, and returning the occupied sector to its pre-medieval era by leveling it to the ground. Also, it intends to cause a rapid and shocking collapse in the Palestinian economy inside the West Bank, of which it controls all its components, whether Foreign exchange revenues, or the proceeds of taxes and fees. One of the most prominent features of [Israel]’s plan to destroy the Palestinian economy is to impose severe restrictions on the movement of Palestinian workers. The occupying state closed its crossings and military checkpoints with the West Bank to workers, and prevented more than 225,000 Palestinian workers from reaching their workplaces within the occupied 1948 territories. Furthermore, it paralyses foreign trade activities, restricting crossings, and prohibiting the employment of workers within the occupied territories. The end result of these actions, is an expected financial deficit of the Palestinian Authority in 2024 will reach $1.86 billion, which is double the deficit in 2023.

To make matters worse, all of this is implemented according to extremist security and ideological considerations and is working to implement a malicious plan whose dangerous effects are no less than the dangers of the genocidal war in Gaza. Alarmingly, there are growing calls from high-ranking government officials to occupy the remains of the West Bank as instructions were issued to prepare to extend Israeli sovereignty over the West Bank next year. This plan also includes expanding the settlements, building more of them, and transferring half a million new settlers to the West Bank, bringing the number to one million settlers.

Syria

Unlike the situation in 2006, when Syria’s economy was considered viable, the negative repercussions of the reverse displacement from Lebanon to Syria began to appear within a record period, not exceeding a few days. The Lebanese war has cast its weight on the collapsed economic and service situation in Syria, in the form of an increase in the prices of most goods, by rates ranging between 10 and 20%. Fuel prices have risen on the black market in Damascus and its countryside, in light of a clear scarcity of these materials. The price of a gas can have reached 250 thousand liras (the dollar equals 14 thousand and 650 Syrian pounds), while the price of a gas can smuggle from Lebanon exceeded half a million liras, despite its scarcity due to the impact of the war on smuggling lines. The price of a liter of gasoline also reached 28 thousand liras. Diesel costs 30 thousand liras. The price jump affected most food supplies. The price of a liter of vegetable oil rose from 21,000 liras to 27,000, and vegetable ghee to 50,000, a kilo of rice jumped to 20,000, lentils to 24,000, and a kilo of sugar rose from 10,000 liras to 13,000. Most public and private means of transportation stopped working, due to the severe shortage of diesel fuel needed to operate buses, including the “Trojan” company, which announced the suspension of all its operations, and the “Al-Qadmus” company, which canceled its excursions to Damascus, due to the lack of diesel fuel.

The contradictory statements from officials about the scarcity of fuel and the new wave of high prices indicate that the government will not be able to control the worsening crises resulting from displacement and the repercussions of the war. The statements varied between complete denial of the price jumps and scarcity of materials, or attributing the causes of the crisis to damage to the fuel smuggling line coming from Lebanon, or to the difficulty of shipping and high costs across the Red Sea. To make matters worse, the government is facing severe economic pressures, and it is unable to provide the minimum basic services except with great difficulty, considering that the majority of services provided are less than the minimum in terms of quantity and quality. In the end, the increasing number of displaced people to Syria will exacerbate these pressures and will be reflected in the form of a decline in the services provided to citizens, because the same services will be distributed to a larger number. Accordingly, the most prominent economic repercussions of displacement will be in the form of clear high prices as a result of high demand and scarcity of some products, especially those that were smuggled from Lebanon. 

Cyprus

According to “Focus Economics” GDP growth edged up to 3.9% year on year in the third quarter from 3.7% in the second quarter, marking the strongest expansion since Q4 2022. The increasing GDP is credited to improvement in sectors related to hospitality, wholesale and retail, IT and communication, and construction. As for 2025, it is expected that there will an increase in consumer and corporate credit demand and reduce household interest payment burdens, freeing up disposable income for discretionary spending which will stimulate growth. Although it is yet to be known the exact figures of 2025, it is expected that the year will continue to register growth. This is specifically the case when Cyprus is set to increase energy production and export. Recently Cypriot Energy Minister George Papanastasiou said that his country will use the Egypt’s infrastructure with the aim of exporting natural gas from Cyprus to international markets. Although he noted his country will begin natural gas production operations during the year 2027, however major companies are already lining up to invest in Cyprus in the energy sector, which will also influence the GDP in 2025. The minister also highlighted an electrical interconnection project which aims to link Cyprus with the European Union and that Emirati companies are interested in investing in the project, explaining that the cost of the large electrical interconnection project amounts to 2 billion euros. The minister also commented that all these advancements will shield Cyprus from the possibility of the war in the region expanding.

4. The Humanitarian Situation

Egypt                                                           

• Although Egypt has been long accused of human rights violations pertaining refugees and asylum seekers, Egypt is only one step away from ratifying a new law on asylum seekers that will shift responsibility from the United Nations refugee agency (UNHCR) to Egypt. Once in place, Egypt will have its own legal framework to address the growing number of refugees in the country and to decide if an asylum request is approved or rejected.

   

Jordan

The UNHCR states that there are currently 687,671 registered refugees in Jordan up until the beginning of November.

The proportion of Syrian displaced people registered within the UNHCR for the beginning of November, are distributed as follows:

-184,821 in Amman Governorate (29.9%)

-158,787 in Mafraq Governorate (25.7%)

-121,199 in Irbid Governorate (19.6%)

-91,787 in Zarqa Governorate (14.8%)

-15,850 in Balqa Governorate (2.6%)

– 12,289 in Madaba Governorate (2%)

-7,993 in Jarash Governorate (1.3%)

-7,836 in Karak Governorate (1.3%)

-8,063 in Maan Governorate (1.3%)

-5,238 in Ajlun Governorate (0.8%)

-3,636 in Aqaba Governorate (0.6%)

-1,289 in Tafilah Governorate (0.2%)

-301 in other (0.1%)

• The Amman Municipality in Jordan has ordered the forced evacuation of dozens of residents from Al-Mahatta Palestinian refugee camp east of the Jordanian capital, and has already begun demolishing shops to make way for a large road expansion project. 

• The clinic operated by Qatar Red Crescent Society (QRCS) from the Qatari Clinics at the Zatari Syrian Refugee Camp in Jordan, provided primary health care services for 31,000 inhabitants, under a project implemented by QRCS with funding from Qatar Fund for Development (QFFD).

   

Iraq

The UNHCR states that there are currently 331,676 registered refugees in Iraq.

The proportion of refugee people registered within the UNHCR up until the beginning of November, are distributed as follows:

-121,617 in Erbil (50.5%)

-40,318 in Dahuk (16.7%)       

-32,068 in Sulaymaniyah (13.3%)

-2,409 in Ninewa (1%)

-28,993 in Baghdad (12%)

-2,788 in Kerbala (1.2%)

-2,391 in Najaf (1%)

-2,285 in Kirkuk (0.9%)

– 1,960 in Anbar (0.8%)

-25,939 in other areas (0.8%)

• USAID has announced a landmark investment of up to $20 million over the next four years, marking the first-ever commitment of this scale to enhance water and sanitation services in Iraq. Through this funding, UNICEF, under the leadership of the Government of Iraq, will scale up transformative interventions across five governorates.

• Kurdistan Save the Children (KSC) has launched a vital initiative to supply essential medical items to the Zhianawa Cancer Center, helping ensure timely, effective treatment for pediatric radiation therapy patients and others in need. Throughout the project 3,000 needed supplies were distributed.

Lebanon

[The UNHCR did not update distribution figures for this month.]

Since the beginning of October, the number of registered Syrian refugees in Lebanon is 768,353.

Refugees in Lebanon are distributed as follows:

-288,296 in Bekaa (37.5%)

-218,427 in North Lebanon (28.3%)

-175,498 in Beirut (22.8%)

-86,132 in South Lebanon (11.2%)

• Between 24th of September and the 10th of November 2024 Caritas Lebanon supported 132,193 displaced people with comprehensive humanitarian services.

• 3,583 people killed and 15,244 injured since 8 October 2023, including at least 231 children killed (MoPH).

•  77 families surveyed by the IRC in Lebanon have reported that their children have been separated amidst the conflict and ensuing displacement. 

• Irish humanitarian organization Concern Worldwide used €142,000 collected from the public in Ireland and the UK to provide 26,100 hot meals to people living in temporary emergency shelters in the Lebanese capital.

• The United Nations World Food Programme (WFP) welcomed a contribution of US$2 million from the people and the Government of Japan to support conflict-affected families across Lebanon.

Syria

• As part of its ongoing humanitarian efforts to support communities affected by crises worldwide, Qatar Fund for Development (QFFD), in collaboration with Qatar Red Crescent Society (QRCS), has announced a financial support amounting to $ 5,000,000 for the United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA) for Syria.

• The Syria Recovery Trust Fund (SRTF) approved new phases of two health projects under the Recovery and Stabilization Programmes, increasing the Fund’s total approved projects to 75 with a budget of EUR 276.6 million.

• In preparation for the upcoming winter season and with the goal of providing safe and dignified shelter to the Syrian displaced families who have endured harsh conditions in tents for many years, Qatar Charity, in collaboration with the Turkish Humanitarian Relief Foundation (IHH), has begun handing over homes in Al Amal City project to displaced families in northern Syria’s camps.

• The SRTF announced the successful closure and completion of Phase II of its Health intervention “Provision of Primary Health Care Services in Deir-ez-Zor Governorate”.

Cyprus

• UNHCR Cyprus declared that 443 refugee arrivals were detected for the preceding month. They come Iran, Syria, Somalia, Sudan, and Afghanistan.