Will 2022 hold more promise for the Middle East?

Ambitious megaprojects and economic reform efforts could stumble amid a pandemic resurgence

As 2022 begins in the Middle East, a new year means a fresh start on key issues including cancelled elections, stalled megaprojects and, of course, a new coronavirus variant.

In 2021, governments breathed a sigh of relief as vaccine data poured in, showing jabs could be effective at preventing serious illness in most Covid-19 patients. January brought hope as 11 countries in the region signed up to the international Covax vaccine scheme, securing shots at a discount.

By the end of the year, it had become clear that some regional countries were vastly ahead in pandemic preparedness, with Israel and the UAE leading the world in vaccination rates.

Other Gulf states, including Saudi Arabia, Bahrain and Kuwait, were quick to vaccinate their populations. Oil prices, which began a swift recovery, also boosted the energy exporters of the region.

But Syria, Yemen, Libya and Iraq were struggling to reach vaccination rates of 20 per cent. Beset by internal conflict, political deadlock and, in Iraq's case, slow reconstruction, this was just one problem among many for these countries. Not for the first time, the region was split between internal strife and the green shoots of economic reform.

Now, after the end of 2021 brought with it the emergence of the Omicron variant, the region's most fragile countries could struggle to escape another severe wave of the pandemic.

Back-channel diplomacy between long-term rivals Iran and Saudi Arabia is expanding to include more countries, aiming to calm tensions that have affected the region for decades.

This development — with Iraq and Jordan hosting meetings — and the ongoing consolidation of the Abraham Accords between Israel, the UAE, Bahrain, Morocco and Sudan, could provide a vital stabilising factor amid ongoing pandemic uncertainty in 2022.

Will diplomacy succeed? Can national development “vision” strategies lessen dependence on oil revenue? On this and other pressing issues, The National's correspondents share their views on what to expect next year.

EGYPT

Egypt lost an estimated $1 billion per month in tourism revenue at the height of the Covid crisis in 2020, according to the Tourism and Antiquities Ministry.

The recovery of the sector — about 11 per cent of the country's GDP — which began in earnest in late 2021 as countries re-opened borders, is now under threat from Omicron.

Amid this uncertainty, President Sisi will continue vital reforms in the electricity sector, reducing subsidies and trying to spur foreign investment. In 2021 alone, Egypt's Ministry of Electricity and Renewable Energy discussed green energy contracts that would total almost 10GW of power if implemented, or almost twice the entire electricity generation capacity of Lebanon.

A general view of the Benban plant of photovoltaic solar panels in Aswan, Egypt, November 17, 2019. Picture taken November 17, 2019. REUTERS/Amr Abdallah Dalsh

The ongoing $45 billion New Administrative Capital project will turn heads in 2022, but fundamental reforms in the investment environment will provide the bedrock for more immediate gains. El Nasr Automotive Manufacturing will be preparing for production of 20,000 electric vehicles per year with an as-yet unnamed foreign partner, another pillar in its ongoing green energy push.

But there are foreign policy challenges afoot as well.

The National's Cairo correspondent Hamza Hendawi writes that there will likely be no breakthrough in Egypt’s water dispute with Ethiopia over the latter’s construction of a massive Nile dam, at least before the civil war in the Horn of Africa nation ends.

IRAQ

Iraq is set to face tough political and security challenges in 2022, after the country held a national election on October 10 nearly a year early, in a bid to appease a pro-reform protest movement that has faced violent crackdowns since October 2019.

But the vote didn’t produce the fundamental change sought by the protesters as the major political parties still hold sway.

Baghdad correspondent Sinan Mahmood writes that the results have deepened the rifts among Shiite parties. The losing parties, mainly Iran-backed Shiite militias, have rejected the results as manipulated and demanded annulling the elections.

Iraqis carrying posters of killed anti-government protesters attend a march to honour the memory of the protesters killed in 2019, at the Zeitoun bridge, near Habboubi Square in Nasiriyah. AFP

It is highly likely that negotiations to form the new government could drag on for weeks or months, jeopardising the already fragile political scene and worsening social unrest.

Rising oil prices will do little to help: the government spends the majority of oil revenue on public sector salaries, rather than vital public services.

Violence cannot be ruled out between armed groups linked to the country's elites, as Iran-backed militias and internationally-backed official armed forces flex their muscles in a struggle for the future of the state.

ISRAEL

After Israel’s fragile coalition survived its first six months in office, there are signs that the unusual alliance may survive 2022, writes Jerusalem correspondent Rosie Scammell. Led by right-wing Prime Minister Naftali Bennett, the government includes left-leaning lawmakers and an Arab-Israeli party for the first time.

While the cabinet’s diversity means there is constant compromise, it also leaves little space for bold policy changes.

But there could be trouble on the foreign policy front.

Senior government officials, including defence minister Benny Gantz, have warned that Iran's nuclear programme is a red line and have hinted that a military option to derail further nuclear development could be on the table. All eyes next year will be on the aftermath of a potential return to the 2015-18 “nuclear deal,” which allowed UN inspections of Iranian nuclear sites in return for the easing of trade sanctions.

An Israeli air force F-35 fighter takes off during the "Blue Flag" multinational air defence exercise at the Ovda air force base north of  Eilat. AFP

JORDAN

The economy is set to dominate domestic concerns in Jordan in 2022, after a severe economic downturn in the past two years.

Amman correspondent Khaled Yacoub Oweiss reports that unemployment is officially at a record high of around 24 per cent and popular discontent has been growing, alongside relatively small funding allocations for unemployment welfare and government services.

A slight recovery in tourism will be tested by the new Omicron variant of the coronavirus. Although the authorities say there will be no return to lockdowns and other virus restrictions, some officials say a partial re-imposition of controls may be necessary as infections rise sharply in the kingdom.

Jordan's King Abdullah II. Jordanian Royal Palace/AFP

Parliament is expected to pass constitutional amendments supported by King Abdullah that aim to give more leverage for political parties in the legislature. The king described the proposed amendments as “political modernisation”.

He is expected to further promote his son, Crown Prince Hussein, whom he sent on trips to Egypt and Qatar in 2020.

On the diplomatic front, Jordan will continue to seek more profile in the region and accommodate President Bashar Al Assad of Syria, and strengthen ties with Russia, while avoiding jeopardising its alliance with the United States.

LEBANON

All eyes in Lebanon are set on the country’s 2022 parliamentary elections.

Nearly three years after unprecedented protests directed at the country’s political elite, in which sectarian parties govern by consensus, political parties are more entrenched than ever, The National's Senior Beirut Correspondent Sunniva Rose writes.

The country’s economic meltdown, which spurred the protests before they died down, has caused the state’s near collapse. The state-run national utility company does not provide more than a few hours of power a day, and security forces are witnessing record-high numbers of desertions.

Parties are stepping in to secure basic services such as fuel or public transport, in what is widely seen as a thinly disguised attempt at consolidating their power and buying votes next year.

Yet it remains unclear when elections will take place — two of Lebanon’s veteran politicians, President Michel Aoun and Parliament Speaker Nabih Berri, are at odds over the issue.

Bank customers scuffle with riot police as they try to storm a bank in Beirut in November 2021. AP

Parliament recommended that legislative elections take place on March 27 but President Michel Aoun said on Monday he would only sign a decree for them to take place in May 15. The day is yet to be officially confirmed as both Prime Minister Najib Mikati and Mr Aoun must sign the decree for the election date to be officially adopted.

The power struggle has caused significant delays in administrative procedures that are mandatory to organise elections, leading many to believe that they will probably not be held in March.

Meanwhile, activists say that the outcome of the August 4 post blast investigation — in which leading politicians are suspected of negligence — would have major implications in ending Lebanon’s culture of impunity.

Coupled with the worsening economic crisis, Lebanon’s deep political polarisation may have potentially explosive consequences in 2022.

PALESTINE

The forecast is gloomy for Palestinian politics, more than 15 years after residents last voted in legislative elections, writes Jerusalem correspondent Rosie Scammell.

It has been eight months since Palestinian President Mahmoud Abbas postponed polls, planned for May, and he is yet to set a new date.

While the fragile ceasefire reached between Gaza militants and Israel has largely held since May, the risk of renewed violence remains high at the start of 2022. With no substantive peace talks in the past decade, there is little optimism of long-term solutions to the Israeli-Palestinian conflict arising over the next 12 months.

A Palestinian woman in a traditional tatriz dress sells pickles at a shopping and entertainment bazaar organized by the municipality in the West Bank city of Ramallah. AFP

SAUDI ARABIA

Saudi Arabia will press ahead with its Vision 2030 economic diversification strategy next year: expect more showcases of the country's spectacular landscape and archaeological heritage, such as the heritage site at Al Ula.

The drive is part of an attempt to bump tourism revenue up to 10 per cent of GDP, an acknowledgement that oil revenue alone cannot sustain long-term growth.

Take the Red Sea Development Company's megaproject to bring millions of tourists to the spectacular emerald waters of the country's rugged wester coastline.

It covers an astonishing 28 sq km and construction of hotels is well under way. An airport will also be built at the site next year, but preserving cultural heritage and the natural environment has been a key part of the plan, spanning a 90-island archipelago. Developers are wrapping in a conservation project, training locals in preservation of the area's rich biodiversity, including the distinctive acacia trees.

A development by The Red Sea Project. Photo: The Red Sea Development Company

These headline-grabbing projects, including the futuristic Neom sustainable smart city development in Tabuk, are just as important as ongoing social reforms however.

Mohammed bin Salman has said that some of the country's budget next year will be spent on promoting “a vibrant society,” a nod to ongoing efforts to bring more women into the workforce and strengthen the human capital base of the country. Female participation in the kingdom's workforce jumped from 20 per cent to 33 per cent from 2018 to 2020, a rate of growth that is unlikely to slow soon.

TUNISIA

2022 will be a major turning point in Tunisia's history — the year where it becomes clear whether the country's experiment with democracy prevails or fails, Tunis correspondent Erin Clare Brown writes.

Much of Tunisia's fate rests in the hands of President Kais Saied who seized sole power of the country in July and empowered himself to rule by decree in September.

The stiff constitutional law adjunct, called “Robo Cop” by fans and critics alike, has rebuffed attempts for dialogue with civil society or political parties, whom he sees as anathema to his political vision of a grassroots political structure.

The biggest test facing Tunisia's President Kais Saied could be securing loans to stabilise Tunisia's economy. AFP

Winter is always Tunisia's season for protests, and 2022 demonstrations are likely to fall into two categories: those concerned with the political direction of the country, and those enraged by social issues.

Protests in November over the country's trash crisis could provide a glimpse into what will come from the social side if Mr Saied fails to deliver significant reforms.

Mr Saied's greatest test will be securing the loans to stabilise Tunisia's economy. Talks with the IMF to secure a $4bn loan were paused for four months after his consolidation of power, and the country is facing a tight timeline to repay foreign debts.

It appears Mr Saied is running out of time to deliver what he ran on — “what the people want”. Many supporters have said if he fails do live up to their demands, they will oust him as they did Zine el Abeddine Ben Ali in 2011.

Updated: December 31st 2021, 8:31 AM