Economic analysts have been drawing attention to some common denominators that are affecting developmental growth in various parts of the world- not only South Asia and Africa but also the Middle East and Central Asia. Quite correctly they are pointing out that regulatory constraints and lack of upgrading suitable infrastructure are reducing the chance of countries to move forward at a faster pace in their quest for development and the creation of new opportunities.
In this context, it is also indicated that geo-political and health pandemics have also greatly affected movement forward. Disruptions from the pandemic, geo-economic fragmentation, and Russia’s war in Ukraine have also cast long shadows on the world trade undercurrents.
However, analysts are suggesting that while these factors have created challenges, the redirection of trade has also generated new opportunities, particularly for the Caucasus and Central Asia. In this regard J. Azour has mentioned that after the war began, the region’s economies have shown continued resilience and trade activity in many countries -fueled in part by alternative trade routes. In 2022, Armenia, Georgia, and the Kyrgyz Republic saw their share of trade- excluding oil and gas with major partners such as China, the European Union, Russia, and the United States- rise by as much as 60 percent”.
Hence, despite some moderation, gross domestic product growth in the Caucasus and Central Asia is now projected to remain robust at 3.9 percent in 2024 before picking up to 4.8 percent in 2025.
Trade volumes between China and Europe via Central Asia have more than quadrupled. Though this route, known as the Middle Corridor, represents a small fraction of overall trade between China and Europe, it holds significant promise for economic development in the Caucasus and Central Asia and its integration into global supply chains.
Shifting trade patterns have also opened opportunities elsewhere. For example, countries in the Middle East and North Africa- such as Algeria, Kuwait, Oman, and Qatar- have almost doubled their energy exports to the European Union in 2022–23 to meet surging demand for non-Russian oil and gas. The Caucasus and Central Asia has also seen an increase in trade with several key trading partners like the United States and the European Union
since 2022.
In the recent past, activities stemming from the conflict in Gaza and Israel have not only disrupted maritime trade and impacted neighboring economies but also increased the level of uncertainty. Suez Canal transits are down more than 60 percent since the conflict in Gaza and Israel began as ships are rerouted around the Cape of Good Hope. Cargo volumes also have contracted sharply in Red Sea ports such as Jordan’s Al Aqaba and Saudi Arabia’s Jeddah. However, some trade has been redirected within the region to Dammam, Saudi Arabia, on the Persian Gulf. Nevertheless, persistent Red Sea disruptions could have sizable economic consequences for the most exposed economies.
Analysts in this regard have observed that countries on the Red Sea (Egypt, Jordan, Saudi Arabia, Sudan, Yemen) might lose about 10 percent of their exports and close to 1 percent of GDP on average if disruptions continue in this manner through the end of this year. Prolonged maritime shipping disruptions could also prove to be costly for the neighboring countries in the Red Sea area.
It is generally agreed that in the current uncertain landscape of international trade, strategic foresight and proactive policy reforms will be the key factors enabling countries to achieve trade and income gains. Addressing the challenges posed by these shocks and seizing the opportunities ahead will require that countries tackle longstanding trade barriers arising from elevated non tariff restrictions, infrastructure inadequacies, and regulatory inefficiencies.
Targeted policy reforms can help do this, though preparation is crucial. Reducing nontariff trade barriers, boosting infrastructure investment, and enhancing regulatory quality could help increase trade by up to 17 percent on average over the medium term. Economic output could also be 3 percent higher. This would also enhance resilience against future trade shocks. achieve higher exports and GDP and guard against future shocks through positive reforms.
Countries in the Middle East and North Africa can mitigate ongoing shipping disruptions by improving their supply chain management, securing new suppliers in the most affected sectors, seeking alternate shipping routes, and assessing air freight capacity needs. In the medium term, countries can increase their resilience to trade disruptions by strengthening and expanding regional linkages and connectivity. In turn, investing in transportation infrastructure, including by developing innovative sea–land routes, would be important.
Building a more diversified trade profile—spanning partners, products, and routes—would significantly bolster the region’s ability to withstand disruptions. Shifting trade patterns present a unique opportunity for countries to redefine their place in the global economic framework. Caught between the longstanding policy of externalizing migration management to third states and the promise of supporting political transitions, democracy, human rights and good governance in Europe’s neighborhood, the EU’s policy towards Tunisia has recently faced difficult choices.
While the renewed European urgency approach to Tunisia may be justified given the looming risk of economic collapse facing the North African country, little or no consideration appears to have been given to the country’s political and institutional trajectory, where an increasingly dysfunctional management of the economy risk further undermining the few potentials of an EU-Tunisia engagement for a comprehensive partnership. Given this context, and with a focus on examining the local, regional and international dynamics shaping Tunisia’s recent challenges and opportunities, the volume seeks to enhance comprehension of the country’s numerous social, political, economic and governance obstacles in the near to medium future and to cultivate a greater understanding within Europe of the complexities inherent in Tunisia’s turbulent transition.
Countries in the Middle East and North Africa can mitigate ongoing shipping disruptions by improving their supply chain management, securing new suppliers in the most affected sectors, seeking alternate shipping routes, and assessing air freight capacity needs. In the medium term, countries can increase their resilience to trade disruptions by strengthening and expanding regional linkages and connectivity. In turn, investing in transportation infrastructure, including by developing innovative sea–land routes, would be important.
Building a more diversified trade profile—spanning partners, products, and routes—would significantly bolster the region’s ability to withstand disruptions. Shifting trade patterns present a unique opportunity for countries to redefine their place in the global economic framework.
Drawing on her experience as a United Nations mediator and a senior American diplomat, Stephanie Williams has provided a first-hand examination of post-Qaddafi Libya. Using concrete examples from her experience in the country, Williams analyses the underlying drivers of the Libyan conflict, as well as the motivations of the international actors and the various Libyan protagonists.
She bears witness to the horrific effect of General Haftar’s attack on Tripoli in 2019, how it tore apart a UN peace process, and how she worked alongside UN envoy Ghassan Salamé to reassemble some semblance of an international consensus under the Berlin Process and accompanying intra-Libyan tracks: military, economic and political.
Williams has recounted her leadership of the UN mediation during the Covid pandemic, adopting new technologies and blending hybrid and physical meetings to produce the October 2020 ceasefire agreement, as well as progress on the economic track and an inclusive political agreement. She has also presented the pernicious effect of new media on peacemaking, and how disinformation and hate speech have exacerbated Libya’s fragmentation. Finally, Williams has also offered ideas on how to break Libya’s cycle of division and dysfunction to meet the longstanding aspirations of the people to live in peace and dignity.
The aforementioned dimensions indicate one common denominator. Every nation needs to examine the other side of the coin and find connotations to create a balancing act that will enable each country to move forward within the socio=economic paradigm.
(Muhammad Zamir, a former Ambassador, is an analyst specialized in foreign affairs, right to information and good governance, can be reached at <muhammadzamir0@gmail.corn>
