$100 Billion Needed Annually to Sustain Infrastructure in MENA Region

An aerial view of the New Administrative Capital east of Cairo (Reuters) and Navid Hanif, Director of Financing for Sustainable Development Office at the United Nations (Asharq Al-Awsat)
An aerial view of the New Administrative Capital east of Cairo (Reuters) and Navid Hanif, Director of Financing for Sustainable Development Office at the United Nations (Asharq Al-Awsat)
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$100 Billion Needed Annually to Sustain Infrastructure in MENA Region

An aerial view of the New Administrative Capital east of Cairo (Reuters) and Navid Hanif, Director of Financing for Sustainable Development Office at the United Nations (Asharq Al-Awsat)
An aerial view of the New Administrative Capital east of Cairo (Reuters) and Navid Hanif, Director of Financing for Sustainable Development Office at the United Nations (Asharq Al-Awsat)

Navid Hanif, Director of Financing for Sustainable Development Office at the United Nations, said that the Middle East and North Africa region would need to spend at least 8.2 percent of GDP to achieve infrastructure goals by 2030.

“With the population of the Middle East and North Africa expected to increase by more than 40 percent over the next few decades, and with increasing industrial demand, the region will need to invest more than $100 billion annually to maintain and build the infrastructure to serve the growing communities and cities,” Hanif told Asharq Al-Awsat.

A World Bank study estimated the investment required for a reliable, strong, secure and resilient infrastructure in the Arab region at up to $100 billion. Conflicts and wars have amplified this need, with the destruction of roads, buildings, and water, electricity and communication networks in a number of countries. Syria, for example, saw the loss of an estimated $117.7 billion in housing and infrastructure in 2017.

Hanif stressed that new investments need to focus on making the infrastructure more resilient. A large part of the Arab region is located in harsh climatic zones, he underlined, noting that the average spending on infrastructure over the past decade has reached just 3 percent of GDP, with financing coming mostly from the public sector.

According to the UN official, global warming is aggravating desertification, water stress, and the rising of sea levels. He added that rainfall has become unstable and climatic disasters, such as droughts and floods, more frequent; thus, endangering life and livelihoods.

This calls for strengthening national and local capacity in managing climate-resistant infrastructure assets, to support sustainable and equitable development, he emphasized.

Moreover, Hanif warned that increasing conflicts in the region were causing physical damage to vital infrastructure for basic services such as water, energy, health care and education.

He stressed that the Arab region faces a huge demand for new and upgraded infrastructure due to the increase in population growth, urbanization and rising inequality.

The UN official added that urban slums were a major challenge in many cities, pointing to poor infrastructure that further marginalizes entire urban and rural communities, which lack access to adequate water and sanitation services, and frequent power rationing.

According to Hanif, these conditions exacerbate the impact of poverty and negatively affect human health, as well as the availability and quality of health care services.

Moreover, poor transportation means and insecure access to energy or telecommunications networks impede entrepreneurship and livelihoods, and limit job opportunities and school enrollment in some areas, especially for girls and women.

The director of the UN Financing for Sustainable Development Office said that the launch of the Arabic version of the United Nations Handbook for Sustainable Development highlighted a wide range of challenges to asset management that fall into several categories, including scarcity of information and lack of clarity of roles, responsibilities and accountability at the government or interagency levels.

Lack of essential materials and equipment, such as storage facilities and technology, can impede asset management, Hanif underlined, pointing to uncertainty about the effects of climate change, public health emergencies and other systemic shocks that affect the design, construction, operation, maintenance, and therefore service delivery of physical assets.

The handbook provides local and national governments with a set of practical tools and includes guidance on how to adapt them to current social, economic and environmental challenges, including climate change and health emergencies, he remarked.



Investors Weigh Market Risks as Israeli-Iranian Tensions Rise

Traders monitoring the movement of stocks on Wall Street (Reuters)
Traders monitoring the movement of stocks on Wall Street (Reuters)
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Investors Weigh Market Risks as Israeli-Iranian Tensions Rise

Traders monitoring the movement of stocks on Wall Street (Reuters)
Traders monitoring the movement of stocks on Wall Street (Reuters)

As the conflict between Israel and Iran escalates, investors are analyzing several potential market scenarios, especially if the United States deepens its involvement. A key concern is a sharp increase in energy prices, which could amplify economic consequences across global markets.

Rising oil prices could fuel inflation, weaken consumer confidence, and diminish the likelihood of interest rate cuts in the near term. This may prompt initial stock market sell-offs and a flight to the US dollar as a safe-haven asset.

While US crude oil prices have surged by around 10% over the past week, the S&P 500 index has remained relatively stable, following a brief decline after the initial Israeli strikes.

Analysts suggest that if Iranian oil supplies are disrupted, market reactions could intensify significantly. A serious supply disruption would likely ripple through global petroleum markets and push oil prices higher, leading to broader economic consequences.

Oxford Economics has outlined three possible scenarios: a de-escalation of conflict, a full suspension of Iranian oil production, and the closure of the Strait of Hormuz. Each scenario carries escalating risks to global oil prices. In the most severe case, prices could soar to $130 per barrel, pushing US inflation to nearly 6% by year-end. In such a scenario, consumer spending would likely contract due to declining real income, and any possibility of interest rate cuts this year would likely vanish under rising inflationary pressure.

So far, the most direct impact has been felt in oil markets, where Brent crude futures have jumped as much as 18% since June 10, reaching nearly $79 a barrel, the highest level in five months. Volatility expectations in the oil market now exceed those of major asset classes like equities and bonds.

Although equities have largely brushed off the geopolitical turmoil, analysts believe this could change if energy prices continue to climb. Rising oil prices could weigh on corporate earnings and consumer demand, indirectly pressuring stock markets.

While US stocks have held steady for now, further American involvement in the conflict could spark market anxiety. Historical patterns suggest any sell-off might be short-lived. For instance, during the 2003 Iraq invasion, stocks initially dropped but recovered in subsequent months.

As for the US dollar, its performance amid escalating tensions could vary. It may strengthen initially due to safe-haven demand, although past conflicts have sometimes led to long-term weakness, especially during prolonged military engagements.