Economics

As a trailblazer in hydrogen diplomacy, Japan is seeking to develop a new pattern of energy interdependence with its longstanding partners, the Gulf Arab states — countries that are promising production bases for and exporters of green hydrogen and ammonia, and whose leaders have come to regard the development of clean hydrogen as an attractive way to diversify their economies.

In the race to manage climate change, the UAE is ramping up its efforts in a bid to accelerate its transition to a green economy. In the first two weeks of July 2023, it published several important documents laying out its actions and objectives, including a revised version of the national climate pledges it made under the Paris Agreement, as well as a number of targeted policies and strategies.

Read MEI’s weekly briefing featuring expert analysis of key regional developments for the week ahead.

After 500 days of coping with the debilitating impact of Russia’s invasion of Ukraine, Egypt’s economy is faltering. At the core of the crisis is its fragile food security. Now, the Egyptian economy is fast approaching a tipping point and Cairo has no alternative but to boost its domestic agrifood production. In addition to building out its infrastructure, Egypt must also adopt cutting-edge agritech solutions to improve the water-use efficiency of the crops themselves.

The Jordanian government has sought to further develop the Bethany Beyond the Jordan baptism site in an effort to boost the tourism sector and the broader economy. But striking the right balance between economic, religious, political, and environmental considerations won’t be easy.

During the 500 days since Russia’s invasion of Ukraine, the Middle East avoided a catastrophic food crisis, thanks in part to the Black Sea grain initiative. Russia’s decision to cancel that agreement is raising fears that the return of supply shortages and skyrocketing wheat prices could quickly plunge the most vulnerable countries of the region into crisis.

The persistence of high food inflation in Turkey belies a deeper problem. Turkish agrifood production cannot adequately cope with increasing water scarcity due to climate change. Challenging Turkey’s own food security, the growing crisis also threatens Turkey’s role as a food supplier to Europe and the Middle East. Regional food supply chain breakdowns due to a decline in Turkish production would create a debilitating economic impact on both regions.

For resource-rich countries such as Gulf oil and natural gas producers, sovereign wealth funds have emerged as promising tools to save for future generations, mitigate the effects of outsized economic shocks, and/or be deployed as reserve investment and strategic development funds to spend on human, natural, social, and physical capital.

Read MEI’s weekly briefing featuring expert analysis of key regional developments for the week ahead.

In the last few years, the global energy outlook has been transformed. The rise of populist politics and a growing sense of urgency about climate change have roiled debates about energy policy in wealthy countries, generating a dizzying mix of new industrial policies. The COVID-19 pandemic made it far harder to predict fuel prices and consumption patterns and forced many countries to confront their connections to fragile multistate supply chains and legacy petrostates.

Since the early years of the Syrian conflict, the Assad regime has systematically diverted local resources dedicated for reconstruction purposes to rehabilitate facilities in areas and sectors that benefit it and its inner circle, as well as placed the burden of rehabilitating properties onto Syrians themselves. To finance this policy, the regime has exploited four key resources, including imposing multiple reconstruction taxes, diverting U.N. and INGO early recovery and rehabilitation projects, capitalizing on local-led crowdfunding campaigns, and forcing Syrians to bear the cost of repairing their own damaged properties.

For the sake of safeguarding transatlantic — and thus also American — security interests in the South Caucasus, it is becoming increasingly imperative that the United States better anchor itself economically, politically, and militarily in the eastern Black Sea region, especially strategically placed Georgia.

The Gulf states emerged from the global pandemic with the wind in their economic sails. But high-profile events like Qatar’s hosting of the FIFA World Cup and the UAE’s World Expo continued to mask two subtle but major weaknesses that have plagued them for decades. Why do Gulf economies lack innovation? And why do they struggle to create private sector employment for nationals?

The current complex situation in the global oil market seriously tests the abilities of OPEC+ to play the role of a regulator, forcing Saudi Arabia to assume the main burden of responsibility for keeping oil prices from declining further and for shoring up the cartel ranks.