Economy

A recent statement from the European Union Foreign Policy Commissioner, Josep Borrell, urging Israel's allies, notably Washington, to cease supplying weapons to Israel has ignited widespread controversy. This call comes amid heightened concerns over the significant civilian deaths in the Gaza Strip. Coinciding with this plea, a Dutch appeals court decision has prohibited the export of all spare parts for F-35 fighter jets destined for Israel. These developments unfold against the backdrop of Israel's plans to initiate an expanded military operation in Rafah. Such an operation raises the spectre of a potential humanitarian catastrophe, particularly concerning the over 1.3 million displaced individuals from the Gaza Strip who have sought refuge in Rafah since the commencement of military activities in the enclave.   The United States provides Israel with annual military aid worth $3.8 billion, which stands as one of the most substantial military aid packages supplied by the U.S. to any country globally. This commitment was reaffirmed by U.S. officials, including President Joseph Biden, who, during his tenure as Vice President under Barack Obama, emphasised the enduring strategic alliance between the two countries. Then Vice President Biden said the U.S. commitment to Israel transcends moral obligations and is a deeply rooted strategic obligation. During a visit to Tel Aviv amid the events of Oct. 7, he underscored that “the existence of an independent and secure Israel within globally recognised borders aligns with the practical strategic interests of the United States.” He further emphasised, “I have long said: If Israel didn't exist, we would have to invent it.” Evidence of the depth of relations and continued support is further demonstrated by Congress' approval of an additional $14.1 billion in military aid to Israel. This aid is intended to bolster Israel's capabilities in its conflict with the Hamas movement, specifically by providing air and missile defence support and replenishing U.S. military stock granted to Israel. This level of support echoes the assistance provided by the United States to Israel during the October 1973 War with the Egyptian Army.   The generous and unconditional support provided by the U.S. to Israel prompts numerous inquiries, particularly in the context of the U.S.'s inability to exert pressure on Israel to stop its war on Gaza. Additionally, its loss of control over the right-wing government's decision-making process regarding the potential expansion of the war to include Rafah, portending an imminent conflict with Egypt. Hence, this analysis endeavours to address a pivotal question: Will these developments prompt a shift in the U.S. stance toward Prime Minister Benjamin Netanyahu and his right-wing government, potentially leading to a withdrawal from the notion of an expanded operation in Rafah? Furthermore, can the United States feasibly cease its military aid to this strategic ally in the Middle East?

Growing climate risks in the MENA region pose a number of threats to the investment environment, which could jeopardise both current and future economic plans. While the progress that countries in the region have made by establishing climate action strategies and confirming their commitment to the green transition has signalled to investors that there is a market for mitigation and adaptation technologies, the impact of climate change may be moving at a faster pace. Forecasts show that temperatures in the region have been increasing at double the rate of the global average and that by 2050 they may increase by 4 degrees; potentially making many cities uninhabitable. In the next few years, it is likely that MENA countries will be faced with the challenge of simultaneously managing the impact of extreme weather conditions alongside the risks accompanying the transition towards emission reductions and sustainability policies. Are the region’s economies ready to navigate the impact that climate risks could have on investments and growth? And what could this mean for investments needed to support the growth of new technologies for the green transition?