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The impact on global growth of the Middle East violence has so far been contained. That’s not the case for Egypt, Lebanon and Jordan, which were already struggling.
By Patricia Cohen
Reporting from London
In the Red Sea, attacks by Iranian-backed Houthi militants on advertising vessels continue to disrupt the direction of the industry and increase shipping costs. The risk of escalation there and around the hotspots of Lebanon, Iraq, Syria, Yemen and now Iran and Pakistan is unfolding throughout the day.
Despite the staggering death toll and wrenching misery of the violence in the Middle East, the broader economic impact so far has been mostly contained. Oil production and prices, a critical driver of worldwide economic activity and inflation, have returned to pre-crisis levels. International tourists are still flying into other countries in the Middle East like Saudi Arabia, the United Arab Emirates and Qatar.
However, for Israel’s next neighbours – Egypt, Lebanon and Jordan – the economic situation is already dire.
An assessment by the United Nations Development Program estimated that in just three months, the Israel-Gaza war has cost the three countries $10.3 billion, or 2.3 percent of their combined gross domestic product. An additional 230,000 people in these countries are also expected to fall into poverty.
“Human progress could simply slow by at least two to three years in Egypt, Jordan and Lebanon,” the research warns, leading to refugee flows, skyrocketing public debt and a decline in industry and tourism, a major source of income, foreign exchange and employment.
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