With the looming threat of regional escalation, it is imperative for the Gulf Arab states to intensify efforts towards a ceasefire in Gaza. Beyond humanitarian concerns, the call for de-escalation is grounded in the shared economic self-interest of these nations, underscoring the need for proactive diplomatic engagement.
The ongoing Gaza war has inflicted a severe human toll, particularly on the Palestinian civilian population, with over 25,000 casualties at the hands of Israeli forces and a staggering 90% displacement rate. Beyond its human impact, the conflict has wrought extensive economic damage, affecting not only Gaza and the West Bank but also neighboring countries, including Israel itself. The urgent call for a ceasefire is reinforced not only by compelling political and humanitarian considerations but also by a robust case grounded in the shared economic self-interest of the involved parties.
The repercussions of the ongoing conflict extend beyond countries like Jordan and Egypt, whose already fragile economies have experienced substantial setbacks. The economic strain also affects major Gulf Arab states, who are expected to play a crucial role in financing a significant portion of the extensive reconstruction and recovery costs associated with the aftermath of the conflict. The financial burden underscores the interconnected economic interests of nations in the region, reinforcing the imperative for a collective and comprehensive approach to address the fallout.
Prior to the 7 October attack on Israel by Hamas and other armed factions in Gaza, the surrounding countries were facing varying degrees of economic difficulty. Lebanon remained mired in a deep financial crisis, mitigated to a small extent by increased tourism and remittances.
Jordan registered some modest improvements on the back of a revival in tourism, but its growth rate was below 3%, unemployment was over 20%, and heavy spending commitments for state salaries, subsidies and the army meant that there was little left for investment, while public debt was about 90% of GDP.
The Gulf Arab powers have yet to play their hand. Qatar has been involved in mediation over hostages, while, along with the UAE and Saudi Arabia, shipping humanitarian aid that has dribbled into Gaza.