2021 to bring some measure of regional relief

Worldwide, the pandemic also exposed multiple divides between the more resilient, well-governed or wealthy (all three are not always present) countries and the rest

  
Digital generated image of financial line charts falling down because of coronavirus COVID-19 on blue background. Image used for illustrative purpose.

Digital generated image of financial line charts falling down because of coronavirus COVID-19 on blue background. Image used for illustrative purpose.

Getty Images
 

As 2020 comes to a close, many people worldwide will be glad to see it go. A historic pandemic rocked our world, cratering economies, shaking societies and polarizing our politics. Poverty numbers worldwide have risen for the first time in two decades, and unemployment spiked just about everywhere. It was, in short, an annus horribilis.

But what of 2021? Where are we headed? More specifically, what will drive the Middle East and North Africa (MENA) in the coming year? Forecasting is of course a fool’s game in our highly disruptive world, but trendspotting is not. There are some substantive trends shaping our world today and into 2021 that will impact the region. Conversely, geopolitical and geoeconomic trends from the region will likely impact the broader world.

Three global trends for 2021 — global economic recovery, growing inequalities across and within countries, and a new geopolitical ordering — will also be reflected in MENA. How the region fares with these three trends will determine whether we face another disruptive year or one that will be marked by steady, if slow, recovery.

Let us start with the biggest trend of all: A post-coronavirus economic recovery. World output took a big hit in 2020, and is headed for a robust recovery in 2021. After a 4.4 percent contraction in 2020, the International Monetary Fund (IMF) forecasts 5.2 percent global growth for the year, which will bring us slightly ahead of where we were at the end of 2019. These “lost years” of growth will drag on the global economy, and many individuals will still be picking up the pieces of their diminished incomes or lost jobs for several years, but at least we are headed in the right direction.

As for MENA, the IMF forecasts 3.2 percent growth in 2021 after a 5 percent contraction this year. As such, the region’s march toward the pre-COVID baseline of output will likely wait another year, into 2022. The IMF foresees 3.1 percent growth in regional economic linchpin Saudi Arabia, 2.8 percent growth for North Africa’s largest economy Egypt, and a 2.5 percent rise for Iraq after a severe 12 percent contraction.

On a global level, the IMF notes that the crisis “disproportionately affected women, the informally employed, and those with relatively lower educational attainment.” The global lending body also noted that the pandemic “will reverse the progress made since the 1990s in reducing global poverty and will increase inequality.”

Similar trends can be seen in MENA. These are short-term trends with long-term impacts because of their disruptive nature. After all, 2021 will mark the 10th anniversary of several milestones in the uprisings that shook the world. The Arab Spring was in full bloom in 2011, with dramatic repercussions for regional leadership and global geopolitics.

Given this short-term trend of rising inequality and increasing pressure on informal economy workers, it is worth remembering the key figure that launched the uprising in Tunisia that spread across the region. Mohammad Bouazizi, the fruit and vegetable vendor who had his license to work taken away and lit himself on fire, represented so much beyond his own tragic fate.

He represented the widespread inequalities in the Arab world. He represented the sad fate of a whole generation of youth burned by corruption, mismanagement and lack of visionary leadership. He was a face behind the numbers of high youth unemployment and underemployment, a real-life human being who was doing everything he could to provide a living for his brothers, sisters and parents.

Where is the region today? In most of the hardest-hit countries in the Levant and North Africa, there has been little improvement on the root causes of the unrest. Remember the 30 percent youth unemployment often discussed during the uprisings? That number remains roughly the same today. What about today’s Bouazizis who experienced the Great Lockdown of the last year? They have a hard time getting by when they miss one week of work, let alone several months.

Worldwide, the pandemic also exposed multiple divides between the more resilient, well-governed or wealthy (all three are not always present) countries and the rest. The well-governed or wealthy generally handled the pandemic better than others. Consider South Korea, Taiwan, Singapore or the UAE — all received high international marks on pandemic response.

Across MENA, these divides were laid bare: Most of the Gulf Cooperation Council (GCC) countries had both the resources and state capacity to handle the pandemic better than many countries in North Africa and the Levant, further exposing the gaps between the GCC and the rest.

As for geopolitics, any time a new US president arrives on the scene, geopolitical systems face a stress test. President-elect Joe Biden will face a region that is both familiar and foreign to his era as vice president. He will face a region that still faces many of the same economic and governance ills, but one that no longer waits for Washington to make geopolitical moves and alliances. Case in point: China’s growing influence across the region despite President Donald Trump’s efforts to roll back Beijing’s geopolitical ambitions.

America’s key allies in the region would rather not choose between Beijing and Washington, so a cooling of tensions between China and the US would be welcome news, particularly at a time when Chinese vaccines will likely play a prominent role in mass vaccinations across the region.

How Biden plays the “Iran file” will also be watched closely. One thing is for sure: Simply walking back into the Iran nuclear deal will not be as simple as it seems given current levels of enriched uranium in the country (12 times agreed levels), a web of new sanctions, and Iranian hardliner distrust of any future US agreements.

Finally, a bit of good news for the region. The IMF forecasts a 12 percent rise in oil prices. Price rises not only benefit oil producers, but also course through regional economies through remittances of workers and regional spending.

The coming recovery year should bring some measure of regional relief, but the economic, social and geopolitical embers remain smoldering — and we all know how quickly a small match can light a big fire.

  • Afshin Molavi is a senior fellow at the Foreign Policy Institute of the Johns Hopkins University School of Advanced International Studies, and editor and founder of the New Silk Road Monitor. Twitter: @AfshinMolavi
Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point-of-view

Copyright: Arab News © 2020 All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.

More From GCC