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The widening Middle East conflict and attacks on Red Sea shipping pose a “significant risk” to the prospects of an economic pick-up in the region, UN trade officials warned on Tuesday.
Forecasts by the UN's trade and development agency show the Western Asia region including the Middle East and Turkey on course for 2.4 per cent growth this year, up from 2.0 per cent last year. It said growth could accelerate to 3.9 per cent next year but only “in the absence of a further escalation of tensions”.
The agency said “significant risks remain as widening conflicts spur tensions throughout the region, with ripple effects for international shipping in the Red Sea”. The risks are particularly concentrated in Israel, Lebanon, Yemen and the Palestinian territories, says an annual trade and development report.
Yemen's Iran-backed Houthi rebels have been attacking Red Sea shipping in a show of solidarity with Hamas in Gaza, forcing mariners to take long-haul alternative routes. The rebels have claimed responsibility for three fresh strikes in recent days, although the pace of attacks appears to have slowed.
Longer sea voyages boosted revenue in the maritime transport industry but came with a “darker side” due to the higher environmental footprint, according to the UN agency, known as Unctad. It said the Red Sea security threats led to increases in both shipping costs and carbon dioxide emissions.
Israel, the US and Britain have launched strikes at Houthi targets in Yemen in an attempt to stop the blockade. Israel's military operations have widened in recent weeks to include a ground campaign in Lebanon and retaliatory strikes against Iran.
The 2024 and 2025 forecasts also consider the possibility of the Middle East conflict and Red Sea disruption leading to volatile commodity prices. The projected growth in Western Asia is based on the stabilisation of oil prices and a rebound in major oil-exporting economies.
Global risks
Geopolitical tensions and uncertainty over how governments will behave are “likely to limit the rebound” globally, the UN officials warn. The agency's secretary general, Rebeca Grynspan, said the sluggish “new normal” growth experienced since 2008 was showing signs of deteriorating further.
“Important shifts in geopolitics and economic thinking – including the return of industrial policy, multipolar trade patterns and new technological innovations – signal that globalisation itself is at an inflection point,” she said.
The report forecasts global GDP growth of 2.7 per cent for both 2024 and 2025, marking three consecutive years below the three per cent pre-pandemic growth trend. The US, China and the EU are all on “decelerating or weakened growth trajectories”, officials believe.
Meanwhile, liberal trade policies brought in since the 1990s are “shifting towards more fundamentally protectionist and interventionist policies” while immigration and labour market rules are also “becoming even more restrictive”, they warn.
They say the world's recovery from Covid-19 has been “marred by widespread discontent” amid high prices and fears of job losses, which “feeds fragility internally and contributes to risks of fragmentation internationally”.
These shifts could “limit possibilities to pursue export-led growth and development strategies … this poses a major challenge for developing countries, where development plans almost always involve export-led growth”, it is feared.
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Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
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The Bio
Hometown: Bogota, Colombia
Favourite place to relax in UAE: the desert around Al Mleiha in Sharjah or the eastern mangroves in Abu Dhabi
The one book everyone should read: 100 Years of Solitude by Gabriel Garcia Marquez. It will make your mind fly
Favourite documentary: Chasing Coral by Jeff Orlowski. It's a good reality check about one of the most valued ecosystems for humanity
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
Your rights as an employee
The government has taken an increasingly tough line against companies that fail to pay employees on time. Three years ago, the Cabinet passed a decree allowing the government to halt the granting of work permits to companies with wage backlogs.
The new measures passed by the Cabinet in 2016 were an update to the Wage Protection System, which is in place to track whether a company pays its employees on time or not.
If wages are 10 days late, the new measures kick in and the company is alerted it is in breach of labour rules. If wages remain unpaid for a total of 16 days, the authorities can cancel work permits, effectively shutting off operations. Fines of up to Dh5,000 per unpaid employee follow after 60 days.
Despite those measures, late payments remain an issue, particularly in the construction sector. Smaller contractors, such as electrical, plumbing and fit-out businesses, often blame the bigger companies that hire them for wages being late.
The authorities have urged employees to report their companies at the labour ministry or Tawafuq service centres — there are 15 in Abu Dhabi.
