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Is Covid-19 a Game-Changer for the Middle East and the Maghreb?

Is Covid-19 a Game-Changer for the Middle East and the Maghreb?
 Michel Duclos
Special Advisor and Resident Senior Fellow - Geopolitics and Diplomacy
 Hakim El Karoui
Former Senior Fellow - Arab World, Islam

The region stretching from the Persian Gulf to the Maghreb is vital to both French and European interests. Home to the world’s largest hydrocarbon reserves, it has been affected by multiple crises for several decades. Its stability is essential to the balance of the globalized world, both economically and in terms of security. What will be the impact of the Covid-19 crisis in this region? How are different countries dealing with the situation? What will be the political and social consequences for each of them? Who will be benefiting in the Arab world, and how will the power play between the United States, China and Russia be affected?

A common backdrop

It is not only religion, language or cultural factors that give a certain unity to this otherwise obviously diverse region. It is also a political culture marked by authoritarianism, albeit to varying degrees and according to different national traditions. In most of the states in focus here, Covid-19 has triggered some typical reactions: an initial denial of reality, a politicisation of the crisis used to counter opponents, tighter social control and even conspiracy theories. Yet the region is familiar with this type of virus, especially the Gulf countries which were hit by MERS-CoV only a few years ago.

We are thus witnessing the usual exploitation of crises by religiously extremist circles: for some the virus was transmitted by Shiite communities, for others the disease is the result of an "imperialist" or Sunni virus. The unreliability of figures is a consequence of authoritarian practices, further reinforced by the lawlessness of areas such as Syria, Yemen and Libya. It is also important to factor in the deceptive methods of these authoritarian governments, for whom success will be measured by the most effective dissimulation of the human cost of the pandemic, rather than the ability to curb it.

Moreover, though alongside oil monarchies, a number of these countries are in a difficult economic situation, making the shock of the health crisis particularly severe. Such is the case for Jordan, Lebanon (who shortly before the crisis announced the suspension of its public debt repayment), Tunisia and Egypt. These countries are dealing with public debt levels of more than 80% of the GDP (97% in Jordan), more than 50% of the population working in the informal economy, unemployment rates of over 20%, and with no tourism revenues in sight (over 10% of the GDP). 

In order to make an initial assessment of the impact of the coronavirus on the Arab-Muslim world, it is necessary to take into account the geographical diversity, as well as the economic and political divides of the region. 

Oil monarchies at the forefront, Iran in trouble, Assad (perhaps) strengthened

Let us examine a first set of countries which are linked geographically and politically. Vulnerable to the projections of the confrontation between Iran on the one hand, and the US and Gulf monarchies on the other, the situation in Iraq and Syria is inevitably tied to the "Gulf-Iran axis". 

Iran was the initial source of the pandemic in the region and appears to be the country most affected by the crisis so far: China is building a high-speed railway line in Qom, the city which soon became the epicenter of the epidemic and where Chinese students study religion. The delay in the decision to halt flights from China can be explained by the economic importance of this country in Iran.

To date, there are over 5,000 Covid-19 victims in Iran and more than 80,000 infected cases. The Gulf neighbours have rapidly closed their borders to Iranians, despite their more robust healthcare structures.

Internal divisions within the system encumbered the response of the regime, as was the case in many other areas. The Supreme Leader and the Revolutionary Guards showed significant reluctance before announcing the closure of mosques and sites of pilgrimage, no doubt out of loyalty for the regime’s core principles. Having had to handle the consequences of a catastrophic year of American sanctions and a 10% drop of GDP, the government delayed the lockdown as much as it could. Despite the highly competent doctors in Iran, the government had to reckon with the poor organisation of healthcare and the low quality of the paramedic system. Though masks can be easily found in Tehran, there are insufficient beds, machines and medical devices.

To date, there are over 5,000 Covid-19 victims in Iran and more than 80,000 infected cases. The Gulf neighbours have rapidly closed their borders to Iranians, despite their more robust healthcare structures.

How will the current forces shaping the region evolve tomorrow? Far from an attempt to predict the future, but rather to contribute to the reflection, let us put forward a few possible trends:

  • Some countries are expected to emerge from the crisis in a better position than others: this is the case for the United Arab Emirates, Kuwait, Qatar and Saudi Arabia. The financial reserves of these countries are very large and they have little debt.

    Saudi Arabia, whose debt does not exceed 25% of its GDP, has an immense debt capacity, even at $25 a barrel. They could easily raise $100 to $150 billion on the markets, which would enable it to get through the health crisis and play oil down for a while without endangering its internal balances. It was critical for the country to respond very quickly to the crisis, considering that they come in second for obesity cases in the world, after Tonga and before the United States. While more political considerations will be taken up further one, it should be noted that the Crown Prince, MBS, has for the time being consolidated his internal position, even if some of his projects - Vision 2030 - will certainly be affected by the crisis.
  • Unlike its Saudi rival, Iran will come out of this crisis severely weakened. The necessity to call on the IMF for the first time in 60 years is in itself revealing, as is the decision taken by Tehran to lift the lockdown very early. It is vital for Iran that the Chinese demand for oil resumes as soon as possible, and that China continues buying Iranian oil while circumventing American sanctions. Furthermore, the worsening economic and social situation will inevitably lead to additional tensions in the internal political game, which we will be explored further on in the article.
  • Finally, countries that are currently suffering from conflict or failed states are expected to pay the highest price in the coronavirus crisis. They will come out of the ordeal even weaker, and more chaos is expected to ensue. 

    This last assertion must of course be clarified. First of all, the protest movement in Iraq has been silenced, as is the case for Lebanon or Algeria. In such countries the discontent of large swaths of the population is not only due to resurface when the time comes, but will be amplified by the devastating effects of the pandemic and the resentment towards its poor management by the authorities.

    In Syria, the Assad regime can hope to reap the benefits of the unfortunate situation: the United Arab Emirates are stepping up their rapprochement with Damascus in the name of the fight against the virus, while other countries could also accept a certain normalisation with the regime in order to provide humanitarian aid. 


Neighbouring the aforementioned countries, and a major player in the region, Turkey is a special case. The pandemic erupted around March 10 and seems to be at the outset of its exponential increase. For the time being, approximately 60% of infected cases are concentrated in Istanbul. The official toll as of April 22 stands at 98,674 cases of infection and 2,376 deaths.

The management of the pandemic by President Erdogan is similar to that of other "neo-authoritarians": priority is given to the survival of the economy.This led to a selective lockdown by age groups, causing tensions between the President and the Minister of Health, and between the government and the Mayor of Istanbul. In this atmosphere, further distress was caused by humanitarian diplomacy operations which were maintained, including those aimed at Europe and Israel, and the sudden imposition of a weekend curfew in the evening of April 10. Carried out with no prior consultation, this measure caused frustration even within the President’s support base.

In Turkey, the pandemic strikes at a time of economic deterioration and dangerous external ventures undertaken by the "sultan".

In Turkey, the pandemic strikes at a time of economic deterioration and dangerous external ventures undertaken by the "sultan". However, if we have to make a prognosis, Turkey should a priori not count among the major losers of the crisis: its healthcare system is above the regional average, and its society and economy have demonstrated resilience when faced with numerous crises.

However, Recep Erdogan may well turn to Europe eventually to ask for financial support, with claims that the virus is spreading in the refugee camps and in Istanbul. In doing so, Erdogan would once again threaten to open the floodgates for refugees into the Schengen area.

Egypt weakened

Egypt faces worrying prospects, not least because of the size of its population, which exceeds a hundred million. 
As of April 20, there are more than 200 deaths, and just over 3000 infected cases. The regime reacted as it usually does: denying the reality on the ground, militarising the fight against the pandemic, cracking down on the whistle-blowers. Given the significant number of informal and unemployed workers, the risks of political destabilization are high. On March 14th, the Egyptian government adopted a first large-scale plan to support the economy. Since the agreement with the IMF in 2016, the Egyptian economy has been experiencing a period of recovery with a growth rate of 5%. However, a combination of factors and the shock of Covid-19 make Egypt vulnerable to a very serious crisis. The poverty rate, estimated at more than 32% by the authorities, has been on the increase for years. Meanwhile, the recent recovery has largely been permitted by the influx of external capital, especially from the Gulf. However, this source is drying up under the double effect of the fall in oil prices and the pandemic. Similarly, income from tourism is going to be severely affected (12% of GDP, 10% of jobs), as will be the case for revenues from the Suez Canal, remittances from emigrants, etc. More than a third of the Egyptian budget is devoted to repaying its colossal debt and interests. In such a situation, where will Egypt find new credits? What conditions will they come with?

Maghreb countries in difficulty

The same assessment of the winners and losers that could be made in the case of the Gulf countries does not apply to the Maghreb. The countries of this region will all face a considerable challenge in financing their losses and reviving their economies.

The Maghreb also has a favourable demographic profile (6% over 65 years of age), which puts the necessity of implementing a quick lockdown into question.

The Gulf region and the Maghreb share similar demographic features, especially with regards to the young age of the population. Those over 65 years of age represent only 5% of the population in the Arab world and Iran. The most emblematic case is that of the Gulf countries, especially the small monarchies, which have a very high proportion of immigrants in their population: 80% in Qatar and 90% in the United Arab Emirates. Two thirds of this immigrant population are male, and almost all of them are active members of the workforce, aged between 20 and 60.

As a result, the number of people over 60 years of age is extremely low in these two countries (1%), extremely far from Asian or European levels (20% in Western Europe for example).

The Maghreb also has a favourable demographic profile (6% over 65 years of age), which puts the necessity of implementing a quick lockdown into question. How is each of the states concerned reacting to the crisis?

  • Morocco has set up a special fund for the management of Covid-19, the aim of which is to finance a livelihood income for the poorest, especially those from the informal sector. This fund has been generously endowed with 3 billion euros financed by the State (1 billion), the European Union (540 million euros), the King himself (200 million euros), the OCP group (Office chérifien des phosphates) (300 million) and all the large companies and fortunes of Morocco. The State will also set up a system of partial unemployment and a minimum monthly income of around 80 euros per person for a household of two people or less (120 euros for a household of more than four people). 
  • Algeria, which used to count among the wealthy Arab oil and gas countries, has over time tipped over to the poor side. The barrel of oil is currently worth $25, whereas the state budget was built on the basis of a $60 barrel (and it should be worth $110 to balance the budget). Algeria has not announced any economic support measures at this stage. 
  • Tunisia, like Algeria, does not have a partial unemployment scheme,but it does have a minimum income for the poorest. It benefits from a European Union grant of €300 million (0.8% of national GDP).

Geopolitics: the crises continue

Turning to the issue of geopolitics, the first question concerns the consequences of the health crisis on the other current crises.

A preliminary observation on this subject is that the pandemic has not changed the fundamental balance of power in the region. For example, the rift between Qatar and Turkey on one side, and between the Gulf States and Egypt on the other remains intact. In addition, the confrontation between Iran on the one hand and the United States and its regional allies on the other has not subsided, even though the United Arab Emirates and Oman have made additional humanitarian gestures towards Iran. For the time being, there is nothing to suggest that Covid-19 will profoundly call into question the current dynamics.

Two general remarks can be added to this. First the gravity of the crisis, which affects not only regional players but also major external powers, should lead to a general decline in the level of conflict and of violence. Conversely, these conditions may trigger risk-taking behaviours on the part of opportunistic players (militia groups, for example) or other players wanting to break out of what they perceive as a strategic deadlock (Iran?). Further observations can be made on the ground:

  • The announcement of a ceasefire by Saudi Arabia may enable a de-escalation of the crisis in Yemen; 
  • In Syria, the ceasefire in Idlib, although precarious, is probably more durable (under Russian influence in particular) than it would have been in the absence of the health crisis. However, Turkey continues to reinforce its military means in Idlib and the Syrian regime has also carried out demonstrations of strength; in the areas controlled by the regime, warlords are taking the law into their own hands;
  • In Libya, the situation is not too different: Russia, Turkey, and the local players have not switched paths. The ceasefire is not really respected;
  • Finally, in Iran, and more generally in the possible areas of an Iranian-American or even an Iranian-Israeli conflict, politics on the brink of the abyss continue: no escalation for the moment, but resolution maintained on the side of the hard wing of the Iranian regime and its counterpart in Washington.

In the same vein, in Iraq and Syria we can see whole swathes of territory turning into real anarchy, favouring a resurgence of terrorist cells, including Daesh. 

Geopolitics: the great international game

The second main geopolitical issue is the rivalry between great powers. It would be tempting to say that great power dynamics will not be affected by the health crisis. However, this crisis should accelerate the trends already that are already under way: the American disengagement, however relative, and what could be called "the declining returns on Russian investment in Syria". In fact, even Russia has achieved its initial objectives in Syria, and should logically seek to consolidate its gains through an international settlement. In the Gulf, Putin has just suffered a setback in the battle over the price of oil, which will certainly affect his regional standing.

Could a regional actor fill the power vacuum that might open up? Turkey probably could do so in the north of Syria, but hardly beyond. Iran will seek to maintain its positions, but seems too weakened to take on a greater role. Israel should emerge strengthened from the crisis, but not to the extent that its regional influence drastically changes. Its internal crisis seems to be entering a new phase, although it remains unclear whether Netanyahu - inching ever closer towards neo-authoritarianism - will manage to use the pandemic to stay in power.

Will there be a ‘Chinese moment’ in this crisis for the Middle East and North Africa? Several factors seem to indicate so.

Another player must be added to the equation: will there be a ‘Chinese moment’ in this crisis for the Middle East and North Africa? Several factors seem to indicate so:

  • The weakening American and Russian involvement in the region leaves room for China, already deeply involved in the Gulf and in Iraq (as well as in Egypt and Tunisia);
  • The isolation and decline of Iran suggest that Tehran's dependence on China will increase;
  • China can ensure that the financial needs of states essential in regional balances are covered. That could be the case for Algeria, where China's economic presence is already significant, and Egypt, whose needs will break through the usual ceiling, despite its traditional donors (IMF, Gulf, West). For China, Egypt would represent an important milestone in its "Road and Belt Initiative" project (Red Sea, Mediterranean);
  • A strategy of Chinese penetration may concur with Saudi Arabia and other Gulf States: MBS, worried about the American attitude and now disappointed by that of Russia, may find it advantageous to reach an agreement with the world's main hydrocarbon consumer and its second largest customer after Japan.

Let there be no misunderstanding: it is very unlikely that China will engage in crisis situations (Iraq/Syria) where it has no direct interests. It will also have to adjust between its interests in Saudi Arabia and its opportunities in Iran. This does not rule out the possibility that China will exert a growing influence as a consequence of the relative withdrawal of other global powers, on either axis (Saudi Arabia/Red Sea/Egypt in particular) in line with its strategic aims (the "Silk Roads" lead to Egypt).

What courses of action for France and Europe?

Unless a social explosion sets in motion uncontrollable political consequences, and provided that our analysis of China’s role in the region holds, the Covid-19 crisis might not lead to major shifts in the Arab, Persian and Turkish world. It is clear, however, that the region, like the rest of the world, is entering a dangerous phase. What are the preliminary conclusions for Europeans?

  • Europe must above all focus on maintaining stability in the Maghreb. In the short term, the priority is to help Morocco and Tunisia, whose increasingly difficult socio-political challenges present multiple risks for Europe (mass emigration, Islamism, anti-Western populism).

    Could the Covid-19 crisis present an opportunity for the Maghreb-Europe relationship? One of the consequences of the current upheaval should be the reorganization of some of the value chains. Is this not an opportunity to include the Maghreb, as an African country, in some of the production lines of the large European companies that will want to find alternatives to China? 
  • Similarly, on the side of the Gulf states, reaching out to Iran seems to be the right humanitarian approach. Trump’s strategy seems to be exploiting the health crisis to hasten a regime change in Tehran. The risk is that such a regime change will benefit the hardliners of the regime, who will inevitably turn to Russia and even more so to China.

    Saudi Arabia currently chairs the G20. A coordinated approach by a number of countries should aim to convince MBS that it would be in his interest to promote a humanitarian aid plan specifically aimed at the most troubled countries in the Gulf area - including Iran. Such an initiative could have positive political repercussions for Saudi Arabia, especially in finding a solution to the crisis in Yemen, thus allowing the kingdom to withdraw in good conditions, as it now hopes to do.
  • Finally, Europeans must seriously rethink their relationship with China in the whole region - first and foremost by giving themselves the means to exist in the eyes of the Chinese.

    In the Maghreb - where Europe's role remains comparatively much greater (and more positive!) than that of China - it is a question of taking up the gauntlet in a competitive game. In the Gulf, an incentive approach on the part of the Europeans could encourage China to position itself as a balancing power. With regards to the Iranian nuclear issue, our analysis shows that China could become more involved than it had been in the past. In the event of increased tensions between the People's Republic and the West, China may be tempted to use this card.




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