Decades of Gulf aid to war-torn Arab countries tops $363bnhttps://en.majalla.com/node/322686/business-economy/decades-gulf-aid-war-torn-arab-countries-tops-363bn
Since 9/11 and America's subsequent war on terror from 2001 onwards, war and conflict have been a mainstay in the Middle East. In 2003, the US toppled Saddam Hussein in Iraq and dismantled the Baathist regime there. Iraq's institutions collapsed, and the country descended into chaos, with corruption and sectarianism running rampant.
Violent events in Lebanon further complicated regional politics. The 2005 assassination of former Prime Minister Rafic Hariri and the failure to bring his murderers to justice allowed Hezbollah to grow its influence and power in the country.
Then came the so-called Arab Spring—a wave of popular uprisings against autocratic rule in the Middle East. It started in Tunisia and quickly spread to countries like Syria, Yemen, and Libya. In 2023, Sudan abruptly descended into civil war, having a long and sordid history of bloody internal conflict.
All in all, the region has been stuck in a vicious cycle of devastation, destruction and political dysfunction. Millions of people have been caught in the crosshairs, leading to widespread human suffering and a desperate need of humanitarian assistance.
This has left Gulf states, Egypt and international institutions with the heavy burden of providing such assistance. They have done a lot, but hundreds of billions more are needed to rebuild war-stricken countries and get their economies back on a steady path of growth and development. However, massive debt, high unemployment rates, and rapid population growth in these countries pose enormous challenges to players trying to lend a helping hand.
The region has been stuck in a vicious cycle of destruction and dysfunction. Millions desperately need humanitarian assistance.
Gulf states have a longstanding and established track record of supporting Arab states in need—from Iraq to Syria to Lebanon. A study by the International Institute for Strategic Studies (IISS) published in October 2023 shows that between 1963 and 2022, the Gulf states provided around $363bn to 22 countries in the Middle East and North Africa.
However, Gulf states no longer enjoy the large financial surpluses of previous decades following the fall in oil prices and the increase in their spending levels. Some countries have actually been running budget deficits since 2014, which has restricted their ability to contribute at the same levels they did before. However, the need is still there, and Gulf states will remain to play a key role. Here is a round-up of Arab countries in special need.
Lebanon
Lebanon stands out as a country that needs special assistance. From the devastating port explosion in 2020 to its financial collapse and its continued political paralysis, Lebanon is currently navigating some of its darkest times. Israel's current relentless bombing all across the country has only added insult to injury.
Gaza
The United Nations has estimated the cost of rebuilding the Gaza Strip to be more than $80bn and warned that the reconstruction process could take several decades. It remains unclear whether the Strip will ever fully recover, given the extent and scale of Israel's destructive military campaign against it. The situation before the current war was already grim. Israel placed Gaza under a crippling siege since 2007, when Hamas took over control, with international groups referring to it as "the world's largest open-air prison".
The current war that began on 7 October 2023 has left more than 40,000 Palestinians killed—a toll that is likely a massive undercount, given the near-complete collapse of the health sector. Tens of thousands more are wounded, some with life-altering injuries. Approximately 90% of the population is displaced, with their homes destroyed or damaged by Israeli air strikes.
With a barely functioning economy, rampant unemployment and a population almost completely dependent on foreign aid, the humanitarian need is overwhelming. Discussions about reconstruction and 'the day after' have suggested Gulf states may play a key role in footing the bill for reconstruction, but with the war still raging with no end in sight, everything still remains unclear.
And Gulf states will certainly have conditions for providing such aid, most importantly a unified and internationally-recognised Palestinian government that would rule over both the occupied West Bank and Gaza. They will also likely link their aid to the comprehensive solution for the Palestinians based on the establishment of their own independent state in accordance with previously passed UN resolutions.
Palestinians carry their belongings as they flee areas north of Gaza City in the northern Gaza Strip on October 12, 2024.
Syria
Syria has suffered the consequences of the civil war that erupted in 2011, with an estimated 500,000 people killed, many more wounded, and millions of people displaced, both within and beyond its borders. Economically, the country's currency has collapsed, and inflation has skyrocketed. Around 90% of the population lives in crippling poverty. The Syrian pound has lost 83% of its value, with one dollar now costing 14,650 pounds.
Making matters worse, the north of the country was hit by a devastating earthquake in February 2023 that killed tens of thousands and caused widespread destruction. Meanwhile, the country is still politically deadlocked, with regional and international efforts failing to secure a political solution acceptable to the country's myriad parties. The lack of national consensus complicates economic recovery.
Sudan
Sudan is still in the midst of a civil war that erupted in April 2023, with the prospect of any side winning militarily unlikely. There is no clear path toward forming a civilian government capable of running the country, and previous attempts have failed.
Sudan has suffered from political instability since its independence in 1956. Since then, the resource-rich country has had several military coups and civil wars. Despite its mineral and agricultural wealth, Sudan's economy was weak even before the outbreak of the current war due to political instability.
Gulf countries, including Saudi Arabia, Kuwait, and the United Arab Emirates, have invested in several sectors in Sudan. One of the most important projects financed by Kuwait and Saudi Arabia since 1975 is the Kenana Integrated Sugar Project, which currently produces 400,000 tonnes of white sugar per year and other related products.
