COVID-19: Health and Economic Crises

Dr. Gawdat Bahgat, NESA

Since mid-February, people in the NESA region and around the world have been suffering from two overlapping crises – a health crisis and an economic one. Turkey and Iran have had the largest number of infected cases, but the virus has not spared any country in the region or in the world. The number of infected people varies from one country to another, but some areas are more vulnerable than the rest of the NESA region. These include war zones in Libya, Syria and Yemen, and refugee camps in Jordan, Lebanon, and the West Bank and Gaza Strip.

In addition to the fighting between different militias, Libya, Syria and Yemen have limited resources and medical infrastructure. Indeed, hospitals and other medical facilities in the three countries have come under direct attack from opposing factions. The Refugees International organization points to Syria as a major cause of concern, noting that more than 5.6 million people have fled the country and some 6.5 million are displaced internally. Most of them lack access to adequate healthcare. Furthermore, the most basic guidance on social distancing and personal hygiene might be difficult to follow where refugees and displaced often live in overcrowded and unhygienic camps.

There are also alarming potential coronavirus crisis-points in the Gaza Strip and the West Bank. The Palestinian Authority, which governs in about 40% of the West Bank, is struggling with limited means to curtail the initial outbreak, but the densely populated Gaza Strip presents an altogether more worrying case. The population there has been under effective lockdown and blockade for more than a decade.

On the economic front, this is a crisis like no other, and there is a substantial uncertainty about its impact on people’s lives and livelihoods. A lot depends on the epidemiology of the virus, the effectiveness of containment measures, and the development of therapeutics and vaccines. In addition, many countries now face multiple crises – a health crisis, a financial crisis, and a collapse in commodity prices, which all interact in complex ways. In addition to the devastating toll on human health, the COVID-19 pandemic is causing significant economic turmoil through simultaneous supply and demand shocks – plunging oil and commodity prices, dropping domestic and external demand, falling consumer confidence, tightening financial conditions, and disruption in production and global supply chains. Several Middle Eastern countries already had a huge youth unemployment rate before the Coronavirus crisis started in early 2020. The reduction in tourism and remittances from oil exporting counties has dealt a heavy blow to several states in the NESA region.

In mid-April, the International Monetary Fund (IMF) issued a report on the economic outlook in the Middle East and Central Asia regions. It projects that growth in the regions will fall from 1.2 percent in 2019 to -2.8 percent in 2020. The good news is, as threats from the virus recede and global policy efforts spur recovery, the IMF projects economic growth in the regions to rise to 4.0 percent in 2021. Regional and international cooperation is needed to overcome these health and financial crises and to resume economic growth.

The views presented in this article are those of the speaker or author and do not necessarily represent the views of DoD or its components.