Arab nations hit by financial crises must listen to experts not politicians, analysts say

A Tunisian farmer ploughs a failed wheat field. Hamza Meddeb said the political leadership of Tunisia as “unwilling” to make hard economic and debt decisions because of the potential political and social costs to the regime.
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Updated 15 April 2023
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Arab nations hit by financial crises must listen to experts not politicians, analysts say

  • Panelists taking part in an event in Washington said political systems in Tunisia, Egypt and Lebanon are to blame for the ‘profound’ debt crises the nations face
  • The COVID-19 pandemic and the war in Ukraine exacerbated existing problems faced by the countries because of their weak economies, they added

Arab countries struggling with high debt and weak economies are particularly vulnerable to the political and economic shocks that can cause destabilization or even government collapse, economic experts from the Middle East and North Africa region warned on Friday.

They said politicians in such countries often wield too much power over the economy, which prevents better-qualified experts from making the necessary decisions to address and resolve the problems.

During a panel discussion titled “The Political Economy of Debt and Adjustments in Tunisia, Egypt and Lebanon” at the Middle East Institute in Washington, which Arab News attended, the experts said the political systems in the three countries were part of the reason why they have been plunged into a “profound debt crisis” or even economic collapse. The COVID-19 pandemic and the war in Ukraine had exacerbated existing problems faced by countries with weak economies, they added.

In the case of Egypt, the country is run by four groups, said Timothy E. Kaldas, the deputy director of the Tahrir Institute for Middle East Policy: The military, the presidency, state security, and the general intelligence department.

These powerful bodies “have ultimate control over the decisions that are central to the economy of Egypt, as well as the policies that have contributed significantly to its current economic crisis,” he added.

Through this monopoly they hold on economic decisions they have prevented financial experts from attempting to fix the problems, said Kaldas.

“The political economic strategy in Egypt was to leverage the state to finance their (power) consolidation, and while doing so they have established a relationship of dependency between them and Egypt’s capitalist class, where a lot of the state spending was funneled through contracts to regime-owned enterprises, particularly the military,” he added.

Kaldas painted a bleak picture of the current fiscal situation in Egypt and state spending in recent years. He said authorities had invested heavily in costly mega-construction projects that far exceeded Egypt’s needs and capabilities. The projects were “grandiose and luxurious” in a country struggling with a financial crisis and massive levels of poverty, he added.

For Egypt to move to the safe zone of economic recovery and stability, Kaldas said, the country’s political leaders need to get out of the way and allow the more capable ministers and experts to take the lead in making economic decisions.

“The state’s solvency is at risk and the ability to raise financing is coming under extraordinary strain,” he added.

He also called on Egypt’s international partners to stop enabling the kind of financial mismanagement that is undermining the country’s economic recovery.

Ishac Diwan, director of research for the Finance for Development Lab at the Paris School of Economics, said countries with weak economies, such as Lebanon and Tunisia, are at greater risk of political upheaval.

“The shock that came on a weak (economic) structure gave rise to the Arab Spring” just over a decade ago he said. In its aftermath, he added, “nothing was fixed” and nations with weak economies instead took advantage of the abundant credit available in the markets, which caused them to sink deeper into debt crises without any clear path to recovery.

Diwan said that although Lebanon had attracted billions of dollars of capital investment from abroad, the nature of its fractured political system had prevented the formation of a unified government capable of making sound economic decisions.

The capital from abroad, which mainly came from the Lebanese diaspora, was not used productively but instead consumed by the state and the public, he added, ultimately causing the economy to collapse as a result of the lack of a strategic vision among warring political groups.

In Tunisia, the situation is much the same: Politics takes precedence over economics, according to Hamza Meddeb, a fellow at the Malcolm H. Kerr Carnegie Middle East Center in Lebanon.

He said that as a result of a lack of political cohesiveness, and uncompromising coalition governments, authorities have failed to make necessary fiscal adjustments. He described the political leadership of Tunisia as “unwilling” to make hard economic and debt decisions because of the potential political and social costs to the regime.


Israeli forces must halt ‘active participation’ in settler attacks on Palestinians: UN

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Israeli forces must halt ‘active participation’ in settler attacks on Palestinians: UN

Geneva: The UN voiced grave concern Tuesday over escalating violence in the West Bank, demanding that Israeli security forces “immediately end their active participation in and support for settler attacks” on Palestinians there.
“Israeli authorities must instead prevent further attacks, including by bringing those responsible to account,” Ravina Shamdasani, spokeswoman for the United Nations rights office, told reporters in Geneva.
Israel is still imposing “unlawful” restrictions on humanitarian relief for Gaza, the UN rights office said on Tuesday. “Israel continues to impose unlawful restrictions on the entry and distribution of humanitarian assistance, and to carry out widespread destruction of civilian infrastructure,” said Ravina Shamdasani, spokesperson for the UN human rights office, at a press briefing in Geneva.

Heavy rains lash UAE and surrounding nations as the death toll in Oman flooding rises to 18

Updated 53 min 47 sec ago
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Heavy rains lash UAE and surrounding nations as the death toll in Oman flooding rises to 18

  • Lightning flashed across the sky, occasionally touching the tip of the Burj Khalifa, the world's tallest building

DUBAI: Heavy rains lashed the United Arab Emirates on Tuesday, flooding out portions of major highways and leaving vehicles abandoned on roadways across Dubai. Meanwhile, the death toll in separate heavy flooding in neighboring Oman rose to 18 with others still missing as the sultanate prepared for the storm.
The rains began overnight, leaving massive ponds on streets as whipping winds disrupted flights at Dubai International Airport, the world's busiest for international travel and the home of the long-haul carrier Emirates.
Police and emergency personnel drove slowly through the flooded streets, their emergency lights flashing across the darkened morning. Lightning flashed across the sky, occasionally touching the tip of the Burj Khalifa, the world's tallest building.
Schools across the UAE, a federation of seven sheikhdoms, largely shut ahead of the storm and government employees were largely working remotely if able. Many workers stayed home as well, though some ventured out, with the unfortunate stalling out their vehicles in deeper-than-expected water covering some roads.
Authorities sent tanker trucks out into the streets and highways to pump away the water.
Rain is unusual in the UAE, an arid, Arabian Peninsula nation, but occurs periodically during the cooler winter months. Many roads and other areas lack drainage given the lack of regular rainfall, causing flooding.
Initial estimates suggested over 30 millimeters (1 inch) of rain fell over the morning in Dubai, with as much as 128 mm (5 inches) of rain expected throughout the day.
Rain also fell in Bahrain, Qatar and Saudi Arabia.
In neighboring Oman, a sultanate that rests on the eastern edge of the Arabian Peninsula, at least 18 people had been killed in heavy rains in recent days, according to a statement Tuesday from the country's National Committee for Emergency Management. That includes some 10 schoolchildren swept away in a vehicle with an adult, which saw condolences come into the country from rulers across the region.


Iran closed nuclear facilities in wake of Israel attack: IAEA chief

Updated 16 April 2024
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Iran closed nuclear facilities in wake of Israel attack: IAEA chief

  • Israel has carried out operations against nuclear sites in the region before
  • Israel accuses Iran of wanting to acquire an atomic bomb, something Tehran denies

United Nations: Iran temporarily closed its nuclear facilities over “security considerations” in the wake of its massive missile and drone attack on Israel over the weekend, the head of the UN’s atomic watchdog said Monday.
Speaking to journalists on the sidelines of a UN Security Council meeting, International Atomic Energy Agency (IAEA) chief Rafael Grossi was asked whether he was concerned about the possibility of an Israeli strike on an Iranian nuclear facility in retaliation for the attack.
“We are always concerned about this possibility. What I can tell you is that our inspectors in Iran were informed by the Iranian government that yesterday (Sunday), all the nuclear facilities that we are inspecting every day would remain closed on security considerations,” he said.
The facilities were to reopen on Monday, Grossi said, but inspectors would not return until the following day.
“I decided to not let the inspectors return until we see that the situation is completely calm,” he added, while calling for “extreme restraint.”
Iran launched more than 300 drones and missiles at Israel overnight from Saturday into Sunday in retaliation for an air strike on a consular building in Damascus that killed seven of its Revolutionary Guards, two of them generals.
Israel and its allies shot down the vast majority of the weapons, and the attack caused only minor damage, but concerns about a potential Israeli reprisal have nevertheless stoked fears of all-out regional war.
Israel has carried out operations against nuclear sites in the region before.
In 1981, it bombed the Osirak nuclear reactor in Saddam Hussein’s Iraq, despite opposition from Washington. And in 2018, it admitted to having launched a top-secret air raid against a reactor in Syria 11 years prior.
Israel is also accused by Tehran of having assassinated two Iranian nuclear physicists in 2010, and of having kidnapped another the previous year.
Also in 2010, a sophisticated cyberattack using the Stuxnet virus, attributed by Tehran to Israel and the United States, led to a series of breakdowns in Iranian centrifuges used for uranium enrichment.
Israel accuses Iran of wanting to acquire an atomic bomb, something Tehran denies.


’No longer a shadow war’: Iran says attack on Israel marks strategic shift

Updated 16 April 2024
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’No longer a shadow war’: Iran says attack on Israel marks strategic shift

  • Israel’s military said it intercepted 99 percent of the aerial threats with the help of the United States and other allies, and that the overnight attack caused only minor damage
  • Israel has killed at least 33,797 Palestinians in Gaza, mostly women and children, according to the health ministry in the Hamas-run territory

TEHRAN: Iran’s missile and drone barrage against Israel was the first act of a tough new strategy, Tehran says, warning arch foe Israel that any future attack will spark “a direct and punishing response.”
This spells a dramatic shift from past years in which the Islamic republic and Israel have fought a shadow war of proxy fights and covert operations across the Middle East and sometimes further afield.
Iran from late Saturday launched hundreds of drones and missiles, including from its own territory, directly at Israel, to retaliate for a deadly April 1 strike on Iran’s consulate in Damascus.
Israel’s military said it intercepted 99 percent of the aerial threats with the help of the United States and other allies, and that the overnight attack caused only minor damage.
Iran said it had dealt “heavy blows” to Israel and hailed the operation as “successful.”
“Iran’s victorious... operation means that the era of strategic patience is over,” the Iranian president’s political deputy, Mohammad Jamshidi wrote on X.
“Now the equation has changed. Targeting Iranian personnel and assets by the regime will be met with a direct and punishing response.”
President Ebrahim Raisi said the operation had “opened a new page” and “taught the Zionist enemy (Israel) a lesson.”
Iran said it acted in self-defense after the Damascus strike levelled the consular annexe of its embassy and killed seven members of the Islamic Revolutionary Guard Corps (IRGC), including two generals.
Western governments denounced Iran’s retaliation as “destabilising the region.”
Iran, however, insisted the attack was “limited” and urged Western nations to “appreciate (its) restraint” toward Israel, especially since the outbreak of the Gaza war on October 7.
Regional tensions have soared amid the Israel-Hamas war which has drawn in Iran-backed armed groups in Lebanon, Syria, Iraq and Yemen.
Several IRGC members, including senior commanders, have been killed in recent months in strikes in Syria which Iran has also blamed on Israel.

Since the 1979 Islamic revolution, Iran has frequently called for Israel’s destruction and made support for the Palestinian cause a centerpiece of its foreign policy.
But it had refrained from directly striking Israel until Saturday, an attack on a scale which appeared to catch many in the international community by surprise.
For decades, Iran relied on a network of allied groups to exert its influence in the region and to deter Israel and the United States, according to experts.
A 2020 report by the Washington Institute said that Tehran had adopted a policy of “strategic patience,” which had “served it well since the inception of the Islamic republic in 1979.”
Former moderate president Hassan Rouhani was a staunch defender of the strategy, especially following Washington’s 2018 withdrawal from a landmark nuclear deal, advocating for Tehran not to take immediate countermeasures and taking a longer view.
Even after the 2020 US killing of Qasem Soleimani, an IRGC commander revered in Iran, Tehran gave prior warning to Washington, US sources said, before it launched missiles against two American bases in Iraq, and no soldiers were killed in the attack.
After Saturday’s attack on Israel, Guards chief Hossein Salami also said Iran was “creating a new equation.”
“Should the Zionist regime attack our interests, our assets, our personnel and citizens at any point, we will counterattack it from the Islamic Republic of Iran,” he was quoted as saying by local media.
The attack was also hailed as a “historic” success by Iranian media, with the government-run newspaper Iran saying the offensive “has created a new power equation in the region.”
The ultra-conservative daily Javan said the attack was “an experience Iran needed, to know how to act in future battles” and that it would make Israel “think long before (committing) any crime” against Tehran.
The reformist Ham Mihan newspaper said the attack “ended the status quo and broke the rules of the conflict that pitted the two sides against each other for 20 years and pushed the situation into another phase.”
“This is no longer a shadow war,” it said.
 

 


Lebanese officials charge Mossad killed Hamas financier

Mohammed Srour. (X/@HasanDorr)
Updated 16 April 2024
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Lebanese officials charge Mossad killed Hamas financier

  • A Lebanese judicial official and a security source told AFP that Mossad likely masterminded Sarur’s killing, both speaking on condition of anonymity as they were not authorized to speak to the press

BEIRUT: A Lebanese minister and two senior officials said preliminary findings suggest Israel’s Mossad spy agency was behind the killing of a US-sanctioned Lebanese man accused of sending Iranian money to Hamas.
The body of Mohammad Sarur, 57, was found riddled with bullets in a villa in the Lebanese mountain town of Beit Mery last Tuesday.
Interior Minister Bassam Mawlawi told Al-Jadeed TV late Sunday that, “according to the data we have so far, (the killing) was carried out by intelligence services.”
Asked whether he was referring to Mossad, Mawlawi confirmed.
AFP has requested comment from Israeli government officials but has received no response so far.
The US Treasury said in August 2019 that it had sanctioned Sarur for funnelling “tens of millions of dollars” from Iran’s Revolutionary Guards “to Hamas for terrorist attacks originating from the Gaza Strip,” through Lebanon’s Hamas-allied Hezbollah.
The Lebanese group has been exchanging near daily cross-border fire with the Israeli military since October 7 when Hamas launched its unprecedented attack on Israel, triggering the war in Gaza.
A Lebanese judicial official and a security source told AFP that Mossad likely masterminded Sarur’s killing, both speaking on condition of anonymity as they were not authorized to speak to the press.
“The preliminary results of the investigation indicate that the Israeli Mossad was behind the assassination,” the security official told AFP.
Initial findings “suggest the Mossad used Lebanese and Syrian agents to lure Sarur to a villa in Beit Mery,” the official said, adding that they had wiped fingerprints from the crime scene and used silenced weapons.
The judicial official also told AFP that preliminary information pointed to Mossad, but that the probe was ongoing, with investigators collecting evidence “especially from communications data.”
The US Treasury said Sarur “served as a middle-man” for money transfers between the (Revolutionary) Guards and Hamas “and worked with Hezbollah operatives to ensure funds were provided” to Hamas’s armed wing.
Sarur “has an extensive history working at Hezbollah’s sanctioned bank, Bayt Al-Mal,” the Treasury said.
In January 2019, the Lebanese army said it had arrested a suspected Mossad agent over a failed bid to assassinate a Hamas official in the country’s south a year earlier.
In the 1970s, Israel launched a targeted assassination campaign against Palestinian militants in retaliation for the killing of 11 Israelis at the 1972 Munich Olympics, leaving several militants dead in Beirut.