The World Bank on Wednesday revised downward its outlook for the Middle East and North Africa's economic growth due to heightened uncertainties caused by the Gaza war, although the Gulf region is on track to expand amid diversification efforts.
The Mena region's gross domestic product is forecast to grow at 2.2 per cent this year, a “modest increase” from last year, but half a percentage lower from the World Bank's April projection of 2.7 per cent.
The increase is driven by the Gulf region, where growth is projected to rise to 1.9 per cent this year from 0.5 per cent in 2023, the lender said in its Mena Economic Update. In the rest of the region, “growth is expected to decelerate”, with oil importers' growth forecast to slow to 2.1 per cent this year from 3.2 per cent in 2023, and for non-GCC oil exporters, to 2.7 per cent from 3.2 per cent.
“The continuing conflict in the Middle East is causing profound suffering,” Ousmane Dione, World Bank vice president for the Middle East and North Africa, said in the report.
While the cost of conflict goes beyond what economic indicators can measure, they “lead to immediate economic losses and can have long-term detrimental effects on development”.
“These outcomes stem from human capital losses, forced displacement, the destruction of physical infrastructure, and various forms of economic disorganisation, including supply chain disruptions,” he said.
While the war has brought Gaza's economy to an almost complete standstill, neighbouring countries also continue to be affected. Jordan recorded a 6.6 per cent decrease in tourist arrivals through August, while there was a 62 per cent drop in Suez Canal revenue in Egypt in the first half of this year.
In Lebanon, escalating tensions are causing “human and economic tolls”, although the full extent of the impact “will be shaped by the future trajectory of the conflict”.
The Washington-based institution also said countries in the region affected by conflict could have seen their income-per-capita on average 45 per cent higher without it, measured seven years after its onset. The group said the loss is “equivalent to 35 years' worth of progress in the region”.
The downgrade also partly reflects the extension of Opec oil production cuts, the World Bank said.
Oil prices are expected to end the year slightly lower at $81 per barrel, compared to $83 per barrel last year. Prices climbed to $88 per barrel in April on escalating tensions in the region before retreating. Brent Crude was trading at $74.36 per barrel at 5.42 Pm UAE time on Wednesday, while West Texas Intermediate was trading at $70.60.
Meanwhile, inflation in the region is easing overall, reflecting a broader global trend in tamping down prices. Inflation is projected to decline to 2.2 per cent in the Mena this year after a decrease to 3.6 per cent last year.
However, the disinflation trend will not be felt evenly in the region. In GCC economies, whose currencies are pegged to the dollar, inflation is projected to slow to 1.7 per cent. Inflation is elevated among developing oil exporters at 4 per cent and oil importers at 5 per cent.
'Significant untapped potential'
The World Bank also noted key areas of opportunity for the region, including closing the gender gap.
At 19 per cent, the rate of female labour force participation in the region is the lowest in the world. Closing the gender gap would result in a 51 per cent increase in per capita income on average in the region, it said.
“Despite the region's current challenges, there is significant untapped potential” in the region, the institution said.
The World Bank also called for other reforms including transforming the role and size of the state, promoting innovation and better allocating talent in the labour market.
Mobilising talent towards the private sector would see aggregate productivity gains to increase by 45 per cent, it said.
“Transforming the role of the state would lead to substantial gains in productivity,” said Roberta Gatti, World Bank chief economist for the Middle East and North Africa.
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
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What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
Starring: Alaa Meqdad
Rating: 4/5
How Beautiful this world is!
I Care A Lot
Directed by: J Blakeson
Starring: Rosamund Pike, Peter Dinklage
3/5 stars
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
COMPANY%20PROFILE
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Children who witnessed blood bath want to help others
Aged just 11, Khulood Al Najjar’s daughter, Nora, bravely attempted to fight off Philip Spence. Her finger was injured when she put her hand in between the claw hammer and her mother’s head.
As a vital witness, she was forced to relive the ordeal by police who needed to identify the attacker and ensure he was found guilty.
Now aged 16, Nora has decided she wants to dedicate her career to helping other victims of crime.
“It was very horrible for her. She saw her mum, dying, just next to her eyes. But now she just wants to go forward,” said Khulood, speaking about how her eldest daughter was dealing with the trauma of the incident five years ago. “She is saying, 'mama, I want to be a lawyer, I want to help people achieve justice'.”
Khulood’s youngest daughter, Fatima, was seven at the time of the attack and attempted to help paramedics responding to the incident.
“Now she wants to be a maxillofacial doctor,” Khulood said. “She said to me ‘it is because a maxillofacial doctor returned your face, mama’. Now she wants to help people see themselves in the mirror again.”
Khulood’s son, Saeed, was nine in 2014 and slept through the attack. While he did not witness the trauma, this made it more difficult for him to understand what had happened. He has ambitions to become an engineer.
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The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
UAE currency: the story behind the money in your pockets
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
