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The Middle East and the post-Covid 19 challenges

6 June 2020 Expertises   124278  

Fabienne Durand

The consequences of the coronavirus pandemic differ from one region of the world to another. They are most keenly felt in conflict areas where public healthcare systems have collapsed or are severely compromised. The greatest risk is that existing tensions and conflicts, such as those in the Middle East, might be heightened. The stability of this region, that stretches from the Persian Gulf to the Maghreb, is essential for economic and security balance in the world.

COVID-19 has not affected all areas in the region in the same way, so it is understandable that one should wonder about the impact of this public health crisis which has not been managed in the same way by all the States that have been affected by it. First of all, what will the most likely consequences be on the political and social levels as well as on the sustainability of the countries in the region? Secondly, which States in the Arab world or which world powers: the USA, Russia or China stand to gain from this unprecedented crisis?

First of all, one notes that COVID-19 has triggered all the usual reactions in the Middle East although the region, and more specifically the Gulf countries, have already had a brush with a similar virus when, in 2012, they experienced an outbreak of Middle East Respiratory Syndrome Coronavirus, MERS-CoV: denial, at least initially, politicisation of the crisis which was used as a window of opportunity to attack opponents, tightening of social controls and ultimately, the proliferation of conspiracy theories.

We can see how religious radicals are exploiting the public health crisis: some believe that the virus was transmitted by Shiite communities, while others claim that it is an “imperialist” virus. Moreover, the lack of transparency and the unreliability of the statistics pertaining to the number of people affected, are typical of an authoritarian culture. Authoritarian regimes resort to this well-tried practice of telling lies because they believe that their success will not be measured on the basis of their ability to contain the pandemic but rather by how well they manage to hide the human cost of the virus.

From an economic perspective, the consequences of this public health crisis will not be the same in all the States. Certain countries, like the United Arab Emirates, Kuwait, Qatar and Saudi Arabia will fare better. First of all, because these countries possess considerable financial reserves and secondly, because they have hardly accumulated any debt. This is particularly true of Saudi Arabia, whose debt does not exceed 25% of its GDP. Its debt capacity is huge, even at a time when a barrel of oil is fetching $25. Saudi Arabia can easily raise 100 -150 billion dollars on the markets, which would help the kingdom to weather the public health crisis, while pushing oil prices down, for some time, without upsetting its internal equilibrium.

Conversely, Iran will be even weaker in the wake of the crisis. The fact that it turned to the IMF for help for the first time in 60 years, is a clear indication of this. Teheran’s decision to come out of lockdown very early; a decision prompted by economic considerations, is further proof of this. To Iran, it is vital that China rapidly boosts its slacking demand for Iranian oil and also that China keeps buying oil from Iran, while circumventing US sanctions.

Several other States in the region find themselves in a delicate economic situation, which the public health crisis will only serve to aggravate. This is certainly true of Lebanon, which, well before the crisis began, had announced that it would suspend repayment of its public debt; of Jordan, where public debt is at 97% of GDP; of Algeria where 97% of the economy depends heavily on revenue from oil sales, of Tunisia and Egypt whose public debt exceeds 80% of GDP, and where 50% of the population is employed in the informal economy, given that the unemployment rate is over 20% and that the tourism industry, which represents 10% of GDP, has been heavily impacted and this year tourism is virtually non-existent.

The deterioration of the socio-economic situation will have repercussions on internal political tensions. Needless to say, it is in countries that are ravaged by conflict such as Iraq, Libya, Yemen and worst of all Syria, where the consequences will be most devastating, deepening the existing chaos. In light of this and due to the mutual assistance required in the fight against the virus, the United Arab Emirates have stepped up their rapprochement with Damascus. With an eye to providing humanitarian assistance, other countries might also accept a certain normalisation of relations with the Syrian regime.
On the geopolitical level, the seriousness of this unprecedented public health crisis, which is affecting regional actors as well as large powers further afield, should bring about a general easing of tensions and conflict and therefore, less violence. Some, however, be it non-State actors such as Daesh or State actors like Iran, might also regard this as a window of opportunity permitting them to wriggle out of the deadlock they currently find themselves in.
With regard to the “big international game” being played out between world powers (namely the United States, Russia and China) in the Middle East, it is probable that the United States will now accelerate its withdrawal and Russia will consolidate the influence it has thus far acquired, notably in Syria. On the other hand, the pandemic, which shrank China’s production and consequently led to a drop in Chinese demand for oil, has had a knock-on effect on the agreement between OPEC countries, led by Saudi Arabia and those countries referred to as ‘non-OPEC’ countries led by Russia. The meeting held on the 6th March in Vienna, whose main objective was to come up with an adequate response to the drop in oil prices, resulted in Russia withdrawing from the agreement reached in 2016. Therefore, the “OPEC+ group” set up in 2016 which controlled more than half of the world’s oil production is now at an impasse.

As for regional balances, Turkey could benefit from the crisis in Northern Syria, even if Iran succeeds in maintaining its positions despite its weakness. Israel does not stand to gain any influence either. All the more so because, just like its rival, Iran, the Jewish State is experiencing significant internal political discord.
Conversely, the weakened position of the United States and Russia in the region could work in China’s favour. China is already very active in the Gulf and Iraq as well as in Egypt and the Maghreb. Isolated as it is, Iran depends increasingly on China; and its weakness only serves to increase its dependency on Beijing. Furthermore, China could also step in to provide financing to key States such as Egypt, that play a pivotal role in safeguarding regional balances. All the more so because Egypt could represent an important milestone for China in its “Road and Belt Initiative” (the New Silk Road), in the Red Sea and the Mediterranean. China’s strategy to rope in Egypt might strike the right chord with Saudi Arabia and other Gulf States.

Chinese interests, however, have limits and it is hardly likely that Beijing will get involved in a crisis situation such as that unfolding in Iraq or Syria as the United States and Russia had done. It would not pay China to do that. It will, however, need to strike a balance between its interests in Saudi Arabia and those in Iran.
In conclusion, the COVID-19 crisis should not cause major upheaval in the Arab, Persian and Turkish world even though admittedly, this is a trying time both for the region and for the rest of the world. Right now, the mood is conciliatory and open to mutual assistance as none of the influential powers in the region would stand to gain anything by encouraging social upheaval and unleashing a wave of political fallout beyond their control, as was the case in 2011.

* Political scientist & consultant in communication on sustainable development and global warming.