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Covid Pandemic in the Mena Region MEDITERRANEAN AND MIDDLE EAST SPECIAL GROUP (GSM) THE COVID-19 PANDEMIC AND THE MIDDLE EAST AND NORTH AFRICA REGION Special Report Gilbert ROGER (France) Acting Chairperson 095 GSM 20 E rev.2 fin | Original: French | 11 December 2020 TABLE OF CONTENTS I. INTRODUCTION: THE COURSE OF COVID-19 IN THE MENA REGION AND ITS ECONOMIC CONSEQUENCES ............................................................................................ 1 II. ECONOMIC IMPACTS ........................................................................................................... 2 III. ENERGY MARKETS .............................................................................................................. 3 IV. REFUGEES AND CONFLICT ................................................................................................ 4 V. GENDER ................................................................................................................................ 5 VI. YOUTH .................................................................................................................................. 5 VII. THE SITUATION IN MENA COUNTRIES AND REGIONS ..................................................... 6 A. IRAN ............................................................................................................................ 6 B. ISRAEL, GAZA AND THE WEST BANK ....................................................................... 7 C. LEBANON .................................................................................................................. 10 D. JORDAN ..................................................................................................................... 12 E. LIBYA ......................................................................................................................... 12 F. TUNISIA ..................................................................................................................... 13 G. ALGERIA .................................................................................................................... 14 H. MOROCCO ................................................................................................................ 14 I. EGYPT ....................................................................................................................... 15 J. THE GULF .................................................................................................................. 16 K. IRAQ AND SYRIA ....................................................................................................... 18 VIII. CONCLUSIONS ................................................................................................................... 20 BIBLIOGRAPHY .................................................................................................................. 21 095 GSM 20 E rev.2 fin I. INTRODUCTION: THE COURSE OF COVID-19 IN THE MENA REGION AND ITS ECONOMIC CONSEQUENCES 1. COVID-19 first appeared in the Middle East and North Africa (MENA) Region in January 2020 in the United Arab Emirates (UAE). At first, much of the region managed to avoid the kind of rapid growth of the virus that struck Europe and the United States. But since this summer, the number of reported cases in the region has increased substantially. At first, the greatest problem seemed to be the secondary effects arising out of disease-driven shutdowns, the precipitous fall of trade, the collapse of energy prices and the evisceration of the travel and tourism industries. But by late this summer, an epidemiological crisis had struck many of the countries of the region and the outlook has worsened both on the medical and economic fronts. 2. The region’s economy is now set to shrink by at least 5.7% in 2020 with several of those countries in conflict forecast to undergo as much as a 13% fall in GDP this year. By July, Arab stocks had fallen by 27%, suggesting the degree to which oil price falls and shutdowns had triggered knock-on effects in capital and equity markets. These changes will have a profound impact on the lives of those living in the region. The UN forecasts that the number of impoverished people living in the Arab world could increase by 14.3 million to 115 million overall. The International Labour Organisation (ILO) estimates that the equivalent of 17 million full-time jobs were lost in the second quarter of 2020 alone (UN 7/20). Young people and women have suffered particularly hard as a result of this downturn and attendant job cuts. This has serious implications not only for the region but also for Europe. 3. Already by early March 2020, with the threat of infection becoming apparent, the region’s governments began implementing serious containment measures including travel restrictions as well as school, factory and store shutdowns. Limited border closures ensued which undermined trade and supply chains. Places of worship were also shuttered, and several countries invoked emergency laws to impose quarantine measures on the public. Some governments underreported the spread of the disease, making the spread of COVID-19 all the more likely. The pandemic put into even greater relief the adverse impacts of violence and conflict. In several of the region’s war- torn societies wide-spread inequality, mass unemployment, undeveloped social safety nets, human rights neglect, poor governance have exacerbated the epidemiological challenges (UN, July 2020). 4. While the pandemic has triggered a crisis in many of the region’s poorer countries, the wealthier Gulf countries have had the means, infrastructure and know-how to cope with challenges both in terms of public health and economically. They have been in a stronger position, for example to more seamlessly scale up the digital economy to meet consumer goods and service requirements as traditional businesses shut down. That said, even these countries confront serious longer-term challenges stemming from the pandemic, including the dramatic fall of energy prices and the economic recession this has triggered. 5. Indeed, there is a range of new threats that could undermine this highly heterogenous and already unstable region’s security and economic well-being. For some analysts, the crisis, if it endures could supersede what transpired during the so-called Arab Spring—a disparate set of political uprisings throughout the region that ultimately factored into the onset of three disastrous civil wars in Syria, Yemen and Libya and the fall of governments in Egypt, Tunisia and Algeria. The emerging crisis could reignite public anger if governments fail to get ahead of the pandemic and effectively manage its medical, economic, and social consequences. Were such instability to break out in parts of this extensive region, the humanitarian and security consequences would be grave and would pose an immediate challenge to trans-Atlantic security interests. 1 095 GSM 20 E rev.2 fin 6. Many of the MENA region’s countries are not well equipped to manage a pandemic. Health care systems are weak, infrastructure is poor and there are far too few health care givers. Health expenditure levels range between 0.6% of GDP in Yemen to 4.6% in Israel (Talbot, 2020). It is difficult to compare morbidity and case statistics across the region due to significant discrepancies in data collection methods and state capacity. Some countries do not publish morbidity statistics and COVID-19 testing is not uniformly administered throughout the region. These deficiencies have led to a serious regional transparency problem with adverse public health, social and economic implications (MENA Crisis Tracker). As a general rule, the wealthier countries are far better positioned to generate reliable public health data, administer virus testing and enforce effective public health regulations. The most destabilised countries obviously are in a far worse position. War-ravaged and impoverished Yemen, to take one example of the problem, has simply stopped publishing testing data and there are signs COVID-19 rates in that country are soaring. Syria, the densely populated Gaza Strip and Libya, are very poorly positioned to manage this health crisis. 7. Allied countries and institutions like the EU have provided emergency support where it is most needed. For example, Allied countries have offered countries support in this difficult moment. In August for example, Spain dispatched large quantities of disinfectant to Iraq as part of a larger donation of medical supplies. This summer, Poland transported large quantities of medical supplies to Iraq, including 1,000 litres of disinfectant and 50,000 masks. Turkey airlifted supplies including large quantities of masks, ventilators and testing kits. 8. Expected macroeconomic losses arising out of the crisis have increased substantially in recent months and hit an estimated 7.5% of MENA’s 2019 GDP as of 4 September relative to what might be the case had no crisis occurred. The expected GDP losses are greatest for Lebanon, with an expected loss in 2020 approaching 18% of its 2019 GDP. The IMF now anticipates that the economy of the greater Middle East and Central Asia will shrink by 4.1% in 2020 (IMF, October 2020) and the greatest burden of this decline will fall on the most vulnerable sectors of society (UNHCR, March-August 2020). Indeed, economic fallout from the pandemic has significantly increased poverty, and the World Bank has expressed concern that these reported poverty rates are systematically underestimated (World Bank,
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