The Mashora Group webinar on MENA Post-COVID explored what economic recovery would look like for MENA countries.
The webinar provided opportunities for suggestions regarding practical action to be taken by governments, international organisations and the private sector to remove obstacles and create opportunities for a more inclusive transition towards a sustainable growth agenda.
In his opening remarks, Dr. Mahmoud Mohieldin, United Nations, Special Envoy on Financing the 2030 Agenda, highlighted how the pandemic impacted the region’s economic and social indicators and suggested response measures. During the discussion, Dr. Mohieldin pointed to an expected 20% decline in global remittances and 40% decline in FDI. He also emphasized the impact on jobs lost since the pandemic (495 million), and noted the rise in poverty and hunger. Moreover, he stressed the severe debt challenge and pointed to numbers by the Institute of International Finance, which estimated that global debt exceeded $258 trillion in the first quarter of 2020. In discussing countries that conditioned debt relief to sustainability goals, Dr. Mohieldin highlighted the importance of connecting short-term emergency policy responses to long-term goals. According to him, health performance will determine the shape of economic recovery in Arab countries. Dr. Mohieldin emphasized that the region is facing multiple crises affecting people, their lives, their health care, education and the economy.
Mr. Richard Hu Fei, the PowerChina MENA regional manager, discussed the impact of Covid-19 on green energy projects in Oman, Qatar, and the UAE and on PowerChina HYPEC’s revenue in Q1. Arguing that the pandemic would not have a major long-term impact on the Belt and Road Initiative, he explored the potential of future public-private partnerships between PowerChina and various governments in the Middle East.
During his talk, Dr. John Sfakianakis, Chief Economist & Head of Research at the Gulf Research Centre, highlighted that the GCC’s current double whammy, or in some cases, triple whammy, cannot be compared to the 2014-2015 oil crisis. He acknowledged that the Gulf countries needed to diversify their economies, and asserted the challenges involved in this process. In fact, he indicated that there is scant empirical evidence of a country outside the region, with a hydrocarbon intensity as high as the GCC, that has managed to economically diversify. He also pointed out that GCC economies needed to undergo rapid fiscal reform. Any future reform plans, in his view, had to be devised in consideration of current and future deficits and debts. Dr. Sfakianakis explored what a new economic model for the Gulf would look like. He questioned several notions, including the Gulf as a tourist destination, or a foreign investor base. He also noted the comeback of the state in many Arab countries, comparing the model these economies are trying to adopt to the Chinese model. Dr. Sfakianakis concluded his talk, by discussing whether GCC trade, not politics, would veer further away from the west in the future and towards the east.