According to the projections of the International Monetary Fund, the economies of the Arab nations—excluding the especially troubled states of Lebanon and Libya—will undergo an economic contraction much more severe than that expected elsewhere, even though the region been spared the worst of COVID-19. Amr Adly explains why:
The global pandemic has exacerbated the region’s already troubled mode of insertion into the world economy. Three factors come to the fore: the heavy and persistent dependence on oil and natural-gas exports as the most defining feature of the Arab nations’ place in the global division of labor; the over-reliance on Europe and the U.S. as the main trade and investment partners; and the low levels of trade integration within the region itself. These longstanding structural weaknesses have magnified the economic impact of the COVID-19 crisis.
In addition, the fact that the EU and the U.S. are the main trade and investment partners of the Arab world has amplified the impact of the health crisis in those areas on the economic performance of the Middle East and North Africa.
The low level of intraregional integration in trade has denied these countries the chance to make use of the relatively better public-health situation in the neighborhood by exploiting a potentially huge market in terms of population and purchasing power.
For the Arab MENA region, then, the story of 2020 has been as much about old economic ailments as new physical ones.
Read more on Bloomberg: https://www.bloomberg.com/opinion/articles/2020-10-27/what-ails-arab-economies-is-older-than-covid-19