The United Nations Development Programme (UNDP) has warned that the ongoing military escalation in the Middle East threatens to reverse development gains across the Arab region and push millions more people into poverty.
In an assessment released Tuesday, the UNDP said Arab economies could face GDP losses ranging between 3.7 and 6 percent, equivalent to USD 120-USD 194 billion, due to supply chain disruptions, declining trade, and energy market volatility.
The report highlighted that unemployment rates could rise by around four percentage points, with up to 3.6 million jobs lost across multiple economic sectors, reflecting mounting pressures on labor markets in the region.
According to the assessment, the impacts are uneven. GCC states and the Levant are expected to suffer the largest economic losses due to direct exposure to trade and energy disruptions, while lower-income Arab countries could face harsher consequences in terms of poverty and social vulnerability.
The crisis could push an additional 2.8-3.3 million people into poverty, representing roughly 75 percent of the projected increase in regional poverty levels. Human development vindicators are also expected to decline by 0.2-0.4 percent, equivalent to losing between half a year and a full year of developmental progress achieved in recent years.
The report relies on economic models simulating multiple conflict scenarios, ranging from moderate disruption to severe turmoil accompanied by energy sector shocks, which could dramatically increase trade costs and partially or completely halt hydrocarbon production.
The UNDP cautioned that continued escalation could produce long-term economic and social consequences, including reduced investment, increased fiscal pressures, and slowed growth. It urged enhanced regional cooperation, accelerated economic diversification, and stronger resilience against external shocks. – Kuna
