Global economic decline likely as Gaza war rages on

He warned against moving from a regional conflict to a clash of civilisations between East and West. This development, he added, would amount to an act of arrogance and an attempt to impose a horizontal culture.

A far-right government in Israel, with extreme ideas and beliefs, uses internationally banned phosphorous weapons, while militant group Hamas counters with opposing beliefs and convictions.

Meanwhile, the civilians suffer – children, women, and the elderly – from infiltration, invasion, and killing.

Gone are the times of military wars between secular Arabism and Zionism while respecting the rules of engagement. The world is witnessing a conflict of abolition and extermination in the name of religion, the chosen people, and the promised land.

Critically, the space for neutrality has been shrinking with each new tragedy.

The fall of hypotheses

For the first time in a long time, the IMF and the World Bank have revised global economic growth forecasts four times in one year.

This is not due to weak hypotheses or the incompetence of experts, but rather a succession of challenges and shocks, mostly negative, that have spoiled economic calculations and future projects.

Even before the annual meetings ended in Marrakech last month, many were aware that any assumptions and expectations shared with participants were outdated and up for review.

Through the smoke of war, uncertainty rises; the levels of uncertainty were at about 50% during the Russian-Ukrainian war, but are approaching 100% with the Gaza war, according to the Moroccan daily newspaper l'Economiste.

After IMF forecasted that the global economy would grow by 3% by the end of 2023, and 2.9% by the end of 2024, other indicators pointed to global growth declining to as low as 2.2% next year.

This is due to world developments, the Chinese economy's weakness (its growth fell to less than 5%), and the quasi-contraction of EU economies (their growth fell to 0.1%) in contrast with an unexpected but unguaranteed improvement in US economic growth towards 5%.

France's Compagnie Française d'Assurance pour le Commerce Extérieur (COFACE) says this year's growth won't exceed 2.4% and could fall to 2.2% next year.

Since these forecasts were made before the Gaza war, there is a strong possibility of reassessing or revising initial assumptions, marked by a further decline.

A new global Covid?

The European side seems to be the weakest link in the global economy due to a decline in Germany's industrial exports; the country is the locomotive of the eurozone's economy.

This drop was born out of several reasons, including the war in neighbouring Ukraine, and the higher cost of energy after gas supplies from Russia were cut off.

Growth in the rest of the bloc constitutes less than 1% at best, estimated at 0.7% in France, which is heavily indebted and suffers from eroded pension fund balances and social hardships.

Germany's Allianz Trade predicted that the risk of bankruptcy of European companies will grow by 6% in 2023 and go up to 10% in 2024 – this could threaten the stability of the labour market and have negative impacts on the conditions of immigrants.

(Important to note that hiring is marred by racism; in France, unemployment among immigrants from Maghreb countries equals to 17%, compared to less than 8% for European immigrants.)

Despite the decline in inflation rates by 50% since the beginning of the year, due to high interest rates and weak domestic consumption, the slow economic growth of 0.1% in the third quarter will reflect negatively on the mood of European citizens, who keep an eye on the Gaza war through the lens of pro-Israeli media.

In European societies, a rift is widening by the day due to media attacks on Arabs and Muslims, who make up about 11% of the total population, several of whom support the Palestinian cause. This will also have economic repercussions.

Media war in Europe

The Le Monde Diplomatique newspaper mocked what it called cheap French media spreading fake news to influence viewers' emotions, referring to reporting that Israeli children were beheaded by Al-Quds Brigades fighters on 7 October, a claim that was later walked back.

It said that today, the Arab situation is the best it's been since any previous war, adding that there are Arab countries that play weighty roles in formulating any subsequent solutions regionally or internationally.

Meanwhile, Israel has appeared weak; its economy needs time to recover. The confidence of rating agencies has fallen, with Moody's and Fitch placing Israel under negative surveillance.

It needs US military and economic support worth $14.3bn out of a total of $92bn, which Washington will spend to support allies, such as Ukraine, Taiwan, and some Middle Eastern countries, and to fortify its land border with Mexico; the latter is primarily an electoral card

In France, some channels, such as LCI, BFMTV, and CNEWS, went exceedingly far in providing false descriptions of the Gaza war based on fabricated photos or unprofessional coverage.

These channels hosted racist analysts who critiqued immigrants for posts condemning the killing of children and civilians in Gaza or sympathising with the Palestinian cause.

An example is the footballer Karim Benzema. French voices demanded that he be punished and stripped of his citizenship because he published on X (formerly Twitter), much like millions of others, denouncing war and violence against civilians.

Notably, he was less bold than UN Secretary-General Antonio Guterres, who linked the current crisis to attempts to obliterate the Palestinian cause.

This is the same position of the Arab League, Russia, China, and all countries of the South.

But the most dangerous piece published by the French press quotes the extremist lawyer Jordan Bardella, who called Islam the Nazism of the 21st century and urged the European Union to stop aid to Arab and Muslim countries and shut down places of worship in France.

The right-wing magazine Marianne went in the same direction: it declared war on the Islamic presence in France. It called for the testing of Arab and Muslim French nationals, evaluating their intentions, and giving them either the option to defend the principles of the republic or to give up their European passport.

It also called for speeding up the expulsion of Asian Muslim "terrorists" because of their religious extremism and their weak French.

Parts of La France Insoumise, a party led by Tangier-born Jean-Luc Mélenchon, fear the growth of xenophobic attitudes in France, under the banner of fighting anti-Semitism, and the division of society into Muslims and Jews, which could threaten national stability and relations with North Africa.

The left-wing opposition party has refused to label Hamas a terrorist movement and considers it a liberation movement, angering the political elite and the French government.

Morocco bets on peace

On the sidelines of the draft 2024 financial law discussions, through which Morocco seeks to achieve growth of 3.6%, Fouzi Lekjaa, Morocco's minister delegate in charge of the budget, told Al Majalla:

"The current international situation is going through difficult circumstances, due to the succession of crises, the latest of which being the war in Gaza, the war that's still ongoing between Russia and Ukraine, violent climate changes that threaten food security, natural disasters such as the earthquake that struck the Atlas Mountains, price inflation in the international market, and other difficulties."

Under royal instructions, direct support will be adopted for poor Moroccan families, ranging from $50 to $20 per month, at the beginning of next year, to counter price fluctuations and support the purchasing power of vulnerable groups, he said.

He also mentioned that the middle class will receive assistance of $10,000 for new homes with a price tag of $30,000 and $7,000 for homes valued at $70,000.

These additional social expenditures will cost about MAD 45bn in next year's budget.

Morocco fears the widening of the conflict in the Middle East, a new crisis in markets and supplies, and rising prices, as happened with the Ukraine war.

The Moroccan economy has been gradually recovering for two years from a severe drought and a devastating earthquake (reconstruction is due to cost $12bn).

Morocco, which has diplomatic relations with Israel under the Abraham Accords that included the United Arab Emirates, Bahrain, and Sudan, has called for an immediate ceasefire, opening the way for the delivery of aid, food, and medicine to the Gaza Strip population. It has also called for no civilian attacks on both sides.

Additionally, it has called on all parties to adopt a discourse of hope to open the way for peace in the future – the only solution required after every conflict.

Morocco paved the way for the Oslo negotiations in 1993 and hosted the 1994 Economic Peace Summit in Casablanca.

The Kingdom supports Spain's position in convening a world peace conference in Madrid that would present the idea of resolving the conflict based on two states coexisting in peace and security.