Economics

As the Syrian conflict reaches its 10-year anniversary, the economic consequences of a decade of war have been nothing less than catastrophic. Instability and inflation are likely to remain major problems over next 10 years — and possibly well beyond — but for now they have created a new level of despair in government-held areas. The Syrian economy has entered its most fragile phase yet and the prospects of a serious recovery remain all but a distant hope as the fiscal challenges confronting the country far outweigh the meagre remedies on offer.

After last year’s much-publicized spat between Pakistan and Saudi Arabia — culminating with Riyadh’s demand for early repayment of $3 billion in loans meant to shore up Islamabad’s foreign exchange reserves — tensions between the two countries have since cooled. Pakistan and Saudi Arabia appear to be in the midst of a reset of relations.

Kuwait is stuck in a major predicament. The government continues to engage in significant deficit spending, even as its readily available funds dwindle, while political gridlock limits the government’s ability to replace those shrinking financial resources.

Writing in 1993, Lillian Craig Harris observed that “for China, economic power, not armed conflict, had become the most important factor in the struggle to gain independence, power, and status.” Fast-forwarding more than a quarter-century, this statement is now more true than ever, especially in the MENA region, where economic ties between MENA and China have grown stronger by the year.

The following article addresses the question of how the Middle East might develop in the coming decade. Long-term and detailed strategic predictions are a thankless task and are often doomed to failure. Therefore, this article refrains from attempts at prophecy but deals instead with “thinking about the future.” It opens with an analytical framework for scenario development, supplemented by “trends impact” and “horizon scanning.” The second section studies “the futures of the past,” in terms of what we might learn about the pitfalls of future projection and scenario-building from those outlining possible futures for 2020 from years past. Then, on the basis of the first two sections, four scenarios elaborate some distinctly different pathways that the Middle East might take to 2030. Finally, the article concludes with several key takeaways for Israeli decision makers.

Iran’s attempts to achieve cyber dominance both within the MENA region and around the world have been well documented, particularly its efforts to spread pro-Iranian messaging and “tell Iran’s story.” This strategy is shaped by the challenging international context facing Tehran, which is suffering economically under U.S. sanctions and largely constrained from purchasing weapons under a recently expired U.N. arms embargo.

On Feb. 3, Russian Foreign Minister Sergey Lavrov hosted his Jordanian counterpart Ayman Safadi in Moscow. After their meeting, Lavrov emphasized Russia and Jordan’s shared positions on Syria, Gulf security, and Israel-Palestine.

For years, Lebanon has suffered from chronic electricity shortages, and repeated attempts to resolve the crisis have failed. None have been able to surmount the political impasse that blocks every reform effort in the country.

Abdelmadjid Tebboune’s rise to the presidency was supposed to bring a degree of predictability to Algeria’s military rulers. But since he was pronounced the winner of the presidential election in December 2019, the regime has entered a new phase of uncertainty. The COVID-19 pandemic, continued dissent, political volatility, and deepening economic malaise have affected the ruling oligarchy’s calculations. Two years after the start of Algeria’s popular uprising, known as the Hirak movement, the country is stuck in the same impasse it has faced since 2019.

Lebanon and its citizens have endured many hardships in recent years. Two dimensions of Lebanon’s condition today are especially striking, however, and augur more difficult times ahead. First, Lebanon has become just another pauperized and increasingly militarized Arab country whose citizens rebel against state authorities. Simultaneously, the regional and international powers that once engaged in it for their own purposes seem less interested in saving it from its self-inflicted decline. 

The news coming out of Iran does not paint a pretty picture of its economy. Economic mismanagement, widespread corruption, weak legal and institutional capacity, and unfavorable business regulations, alongside the unprecedented U.S. financial and economic sanctions and the coronavirus pandemic, have been choking the Iranian economy. However, with a population of 85 million, half under the age of 30 and highly educated, as well as a strategic location on the Persian Gulf and vast reserves of energy and other natural resources, including wind and solar energy, Iran’s economy has incredible potential waiting to be unlocked.

The core question for Iran watchers this year is the likelihood and nature of a renewed Iranian nuclear deal. However, the circumstances are very different and the respective bargaining power of the two sides does not mirror the negotiations in 2015. In particular, the macroeconomic backdrop is considerably worse today and the regime more desperate for sanctions relief than it seems.