Peacefulness has declined to its to lowest level in 15 years fuelled by post-COVID-19 economic uncertainty and the Ukraine conflict, according to the the 16th edition of the Global Peace Index from the Institute for Economics & Peace (IEP).

Out of the 163 countries ranked, 48 out of the 57 member countries of the Organisation of Islamic Council (OIC) were included. No OIC countries featured in the top 15 slots, the ‘very high’ state of peace. Eight OIC countries were in the ‘high’ state of peace category, 21 in the ‘medium’ category, 11 in the low category, and eight in the ‘very low’ category.

Iceland remains the most peaceful country worldwide, a position it has held since 2008. New Zealand, Ireland, Denmark and Austria also top the Index. For the fifth consecutive year, Afghanistan is the least peaceful country, followed by Yemen, Syria, Russia and South Sudan. Out of the 14 countries in the very low peace category, eight are in the OIC.

Seven of the 10 countries at the top of the Index are in Europe, with Turkey the only country in the region to be ranked outside the top half of the Index.

Malaysia topped the list for OIC countries in the ‘high’ state of peace category, in 18th place, followed by Qatar in 23rd place (up six places on the previous Index), Kuwait at 39 (down one place), Albania at 41, Indonesia at 47 (down two places), Jordan at 57 (up 15 places), the UAE at 60 (up one place).

Most OIC countries were in the the medium category. Senegal dropped 12 places to 70, Kosovo rose 8 places to 71, Morocco rose 9 places to 74, Gabon was ranked 75, and Tunisia dropped three places to 85. Tanzania was ranked 85, Uzbekistan 86 (up 7 places), Kyrgyzstan 91 (down 21), and Tajikistan to 92 (up six places). Bangladesh was 96 (up 6 places), Kazakhstan was ranked 97 (down 29), and Bahrain came 99th. Turkmenistan was at 104, Guyana at 107, Cote d’Ivoire at 108, Algeria 109, Mauritania at 112, and Djibouti at 113. Saudi Arabia was ranked 119, up 8 places, Uganda 121, and Egypt at 126 (up five places).

In the ‘low’ category, Azerbaijan was ranked 128, Palestine 133, Chad 136, Lebanon 138, Niger 140, Iran 141, Cameroon 142, Nigeria 143, Turkey 145 (up five places), Burkina Faso 146 (down 12 places), and Pakistan at 147 (up one place).

In the ‘very low’ category – the least peaceful - Mali was ranked 150, Libya 151, Sudan 154, Somalia 156, Iraq 157, Syria 161, Yemen 162, and Afghanistan at 163.

Dark green ‘very high’ state of peace, green ‘high’, yellow ‘medium’, orange ‘low’, red ‘very low’ (Global Peace Index 2022).

The Index’s measure of global peacefulness showed a deterioration of 0.3% in 2021, the eleventh deterioration in peacefulness in the last 14 years. Ninety countries improved, and 71 deteriorated, which the reported said highlighted “that countries deteriorate much faster than they improve”.

The global economic impact of violence was $16.5 trillion in 2021, equivalent to 10.9% of global GDP, or $2,117 per person. For the 10 countries most affected by violence, the average economic impact was equivalent to 34% of GDP, compared to 3.6% in the countries least affected.

On the positive side, terrorism attacks declined, with 70 countries recording no attacks in 2021, the best result since 2008. Twenty-eight countries have high levels of instability, and 10 countries recorded the worst possible political terror score.

Nonetheless, the political terror scale, political insecurity, neighbouring country relations, refugees and internally-displaced-persons (IDPs) reached their worst score since the inception of the Index.

However, inflation, which has increased food insecurity, and political instability is having a negative impact, with Africa, South Asia and the Middle East under the greatest threat, the report notes.

The global inequality in peacefulness has continued to increase. Since 2008, the 25 least peaceful countries deteriorated on average by 16%, while the 25 most peaceful countries improved by 5.1%. Since 2008, 116 countries reduced their homicide rate.

“Last year we warned about the economic fallout from COVID-19. We are now experiencing supply chain shortages, rising inflation, and food insecurity that have been compounded by the tragic events in Ukraine. The political and economic consequences of this will reverberate for years to come. When combined with the record poor scores for neighbouring relations, political insecurity and intensity of internal conflict, governments, organisations, and leaders must harness the power of peace,” said Steve Killelea, Founder & Executive Chairman of IEP, to the press.

“The economic value of lost peace reached record levels in 2021. There is a need to reverse this trend, and the Index has shown that those countries that implement the attitudes, institutions and structures that create and sustain peaceful societies, witness an improved economic outcome,” he added.

The intensity of violent demonstrations has increased by 49% since 2008, with 126 of the 163 countries in the Index deteriorating. The report stated that this is a global trend, affecting all regions of the world except the Middle East and North Africa.

South Asia has the highest frequency and intensity of violent demonstrations by region, with India, Sri Lanka, Bangladesh, and Pakistan recording their highest levels since the first index. In Europe, there were widespread anti-lockdown protests, especially in Belgium, France, the Netherlands, Austria, Croatia and the UK, with similar developments in North America, according to the report.

A high-level Gulf country business delegation, including the United Arab Emirates (UAE), said Jammu and Kashmir was a significant investment opportunity and its members would soon finalise their investment plans.

Delegates representing more than 30 companies participated in the Gulf Business Summit at the Srinagar Sher-e-Kashmir International Convention Centre (SKICC) in mid-March to convert about $450 million in memorandums of understanding (MOUs) signed earlier this year into reality. 

Intending to explore massive investment opportunities in the Jammu and Kashmir Indian Union Territory, the delegation expressed its interest in exploring business prospects in education, real estate, food processing, cold storage, cold chains, hospitals and hospitality. Several UAE-based companies have signed MOUs with the region.

The development comes a month after India signed the comprehensive economic partnership agreement (CEPA), an important and liberal free trade agreement, with UAE. India is the UAE’s second-largest trading partner while the UAE is India’s third-largest trading partner.

In 2019/20 foreign trade between the two amounted to $60 billion, while the CEPA is predicted to boost bilateral commerce to $100 billion within five years. This is testimony to the deep ties between the two nations.

According to the Jammu and Kashmir lieutenant governor Manoj Sinha, Kashmir has evolved from a quiescent commercial destination to a place of opportunity and investment. 

“The government is hopeful to bring in an investment of over US$ 9.3 billion in the next six months. In 2021 the Union Territory secured $2.5 billion in investments, demonstrating the region’s business potential and vast opportunities. If and when the investments take place, it will generate a minimum of 600,000 to 700,000 jobs in the region,” he said.

The Gulf countries have evinced interest in investing in Kashmir, although it is a disputed Muslim majority region wracked by an insurgency since 1989 that has claimed 41,000 lives, according to the last available government data released in 2017.

On 5 August 2019 the Indian Parliament revoked the temporary special status or autonomy granted under the Indian Constitution to Jammu and Kashmir. The central government said the special status had hindered the region’s industrial development.

Sinha said now people who were not original Kashmir residents could own land and immoveable property in the state, effectively encouraging investment particularly Muslim countries wanting to exploit the region’s investment potential. 

Abdulla Mohammad Yousuf Abdulla Alshaibani, the CEO of Emirates International Investment Group, asserted, “There was a big opportunity to invest in Kashmir for the visiting delegation that included CEOs of top companies, entrepreneurs, start-up representatives and exporters”.

Sinha added the visit was an expression of confidence by industry leaders in the potential for business cooperation between Jammu and Kashmir and the Gulf countries and to make the “paradise on earth the most beautiful investment destination” in the world. 

Kashmir has been universally acknowledged as heaven on earth.

The Gulf countries are drawn to Kashmir as they seek local support. Government statistics indicate unemployment is one of the region’s biggest problems, estimated at 46.3% among educated youth. The industrial leaders hope job creation opportunities will win local trust.

Ranjan Prakash Thakur, Jamma and Kashmir principal secretary industry and commerce, said initially investors had apprehensions about the strife-torn conflict zone. In that light the visitors had been invited to check independently; it had not been a sponsored visit.

The Kashmir Chamber of Commerce and Industry (KCCI) said the government initiative would open doors for further opportunities in Kashmir. 

Sheikh Ashiq Ahmad, KCCI president, told Salaam Gateway that “before coming to the conclusion about the meeting, I always believed it was a welcome thing that a delegation has come and interacted with officials. My belief is the day when the members of the business community meet each other, the business starts,” he said. 

In facilitating Kashmir-based start-ups in establishing their operations in Gulf countries, the visiting delegation also announced plans to open a Dubai-based Kashmir business centre to support and connect Jamma and Kashmir-based entrepreneurs with relevant people and businesses.

However, there are fears more violence could occur in the region following reports that separatist groups in Kashmir have acquired weapons the Taliban seized from the US army after the latter’s withdrawal from Afghanistan last year.

This has not been officially confirmed by the Indian army or government authorities, but in an unsubstantiated video released by terror group People’s Anti-Fascist Front (PAFF), militants are seen using US-made rifles and pistols. Equally, terrorists killed in Kashmir by security forces in different operations were found carrying US-made M4 carbine rifles.

According to some media reports, the Taliban is selling leftover arms and ammunition that could end up in Kashmir.

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Released in October 2021, the latest Anholt-Ipsos Nation Brands Index (NBI) (https://www.ipsos.com/) listed Germany, Canada and Japan as the top three nations when considering six dimensions of the country’s national competence.

The global nation brand survey examines the images of nations annually via online interviews with adults aged 18 and older in 20 core panel countries. It takes into account exports, governance, culture, people, tourism, immigration and investment to holistically provide an indication of the country’s reputation.

Launched in 2005 by national image specialist Simon Anholt, this was the first time the NBI published the complete list of countries’ rankings and scores and revealed the OIC nations only feature in the lower third. Anholt has authored six books about countries, cultures and globalisation.

“What people call brand image is nothing more than prejudice. It can be a positive prejudice; it can be a negative prejudice, but it's something we receive from the culture around us,” Anholt told Salaam Gateway.

In 2021 NBI’s global sample size tripled to 60,000 interviews per year. Each panel country, including Turkey and Saudi Arabia, corresponds to a three-fold increase in samples to 3,000 interviews. Another 10 countries were included, bringing the 2021 figure to 60.

Anholt said there was increased interest in the concept from poorer states because an enhanced image might create more favourable conditions for foreign direct investment, tourism, trade and even political relations.

The impact of Saudi Arabia’s Vision 2030

Saudi Arabia’s concerted effort to diversify its economy saw the Kingdom launch Vision 2030 in 2016 and open its doors to international visitors and investors. However, despite hosting international business and sporting events and producing all-female-led tourism campaigns, the Kingdom only ranks five countries from the bottom with a score of 51.74.

Describing Vision 2030 as “one of the most rigidly domestic national strategies I've ever read”, Anholt warns about myopia but believes Saudi Arabia can potentially improve its image.

“If Saudi Arabia chooses collaboration, enlightened self-interest and multi-lateralism, tackling climate change and religious intolerance and misunderstanding, it could become one of the world’s most valued countries, because it straddles the fault lines of these hugely important problems.”

However, change is required for the Kingdom to achieve its pre-pandemic national tourism strategy objectives. This demands boosting annual tourism stays from 41 million (2019) to 100 million by 2030; providing 1 million Saudi jobs and increasing tourism’s gross domestic product (GDP) share from 3% (2019) to 10% by 2030.

According to the World Tourism Organisation, Saudi Arabia’s tourism revenue crashed nearly 70% to $5.96 billion in 2020, or 0.85% of the total $700 billion GDP reported by the World Bank. This makes Saudi’s 2022 milestone of 5.3% GDP via tourism a challenging target.

“Tourism is the quintessential soft power business,” Anholt said. “You will not get mass tourism or even niche tourism to Saudi Arabia unless you do something about the country's image.”

Fair showing from newcomer Morocco, but Palestine finishes the list

After Egypt (position: 36) and Turkey (38), newcomer Morocco (42) slipped in ahead of Indonesia (43) to rank as the third-best OIC nation. Anholt said Morocco was added to the survey since North Africa had generally been inadequately covered.

The World Travel & Tourism Council stated travel and tourism contributed 6.2% to Morocco’s $113.55 billion economy in 2020 – less than half of what the country secured the previous year.

Anholt said Palestine's inclusion in the index was based on establishing solid data on how the country would perform. He was “often asked” about global perceptions of the Israel-Palestine issue and believed it was “fascinating to have proper survey data on that topic”.

“It was about time, even if it's only for one year, to collect some hard data.”

However, he said the image of any country involved in a conflict, whether the nation is perceived as the aggressor or victim, is damaged by association.

“A hypothesis I wanted to test was whether Israel and Palestine suffered equally from being associated with conflict and that public opinion doesn't necessarily blame one significantly more than the other,” Anholt said.

Palestine ranks last with a score of 46.73. Already featured in previous years, Israel (47) scored 54.11.

Changing perceptions

According to Anholt, it’s nearly as difficult to spoil a positive country image as it is to improve a negative one. Germany, ranking in first place for the seventh time overall and fifth consecutive year, teaches the world a lesson on what is required to build a strong nation brand.

Its reputational strengths lie in exports, immigration, investment, governance and culture. Respondents were particularly optimistic about buying German products; the appeal of investing in German businesses; the government’s initiatives to fight poverty and the country’s ability to excel in sports. Collectively, these placed Germany in the top-two in all five categories in 2021.

Anholt believes only internationally prominent leaders and consumer brands have the power to raise a nation’s profile. Propaganda appears to achieve nothing, but nurturing domestic brands to become global and a country’s ambassadors, requires patience.

“You need a lot of them, and it takes a long time,” Anholt said.

Regarding propaganda, Anholt, who has advised the presidents, prime ministers and governments of 63 countries since 1998, has just one recommendation.

“Don't tell people what you've done. Don't tell people what you're going to do. Just make your country useful to the world and keep doing it,” he said.

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Selangor, Malaysia; Dhaka and Dubai: The Russian invasion of neighbour Ukraine has triggered a political divide on global response with Western nations imposing sanctions while many Muslim countries, governments and businesses adopting a strained neutrality towards the world superpower.

Malaysia is a case in point – its close relations with European, North American and Asian countries, including Japan and South Korea, means it is loathe to breach those trading partners’ sanctions on Russia. However, the south-east Asian country has not imposed its own sanctions.  

Azmi Hassan, Senior Fellow at the Nusantara Academy for Strategic Research (NASR) in Selangor, told Salaam Gateway that should Russian companies be subject to non-Malaysian sanctions, the Malaysian government and businesses have “considerable leeway” in deciding whether or not to impose similar restrictions.  

In March a Russian-registered vessel was declined entry into Malaysian ports with the country’s transport ministry confirming the action was in accordance with international sanctions. Azmi said in that case the country did impose sanctions “if other countries specifically sanction a company or in this case, a vessel”.

Last year Russia celebrated its 30-year tie with the Association of Southeast Asian Nations (ASEAN) nations and has adopted a revised 2021-25 ASEAN-Russia Trade and Investment Cooperation Roadmap. However, Russia’s economic and trade performance with ASEAN has been underwhelming with turnover between the partners peaking at $23 billion in 2014 and falling to $15 billion by 2020.  

Regional economists from the Singapore-based Overseas Chinese Banking Corporation (OCBC) Bank said Malaysia’s exports to Russia were merely 0.33% of the country’s total shipments in 2021, while its imports of Russian goods were under 1% during the same time-period. 

Azmi affirmed Russian’s overall trade with Malaysia was worth less than $1 billion – not enough to shift business sentiment towards resisting (or promoting) sanction compliance. 

“So far, we are not on either side, even though we supported the United Nations General Assembly resolution a few weeks ago (that condemned Russia’s invasion), but we are neutral, so I don't see any dampening of our trade with Russian counterparts,” said Azmi.  

The same applies to all Malaysian companies, whether run by its Muslim Malay majority or (largely) non-Muslim Chinese, Indian and other minorities with Azmi indicating there would be “some impact”, but it would be minimum rather than drastic.

Bangladesh’s position

Bangladesh has shown a similar reluctance to take sides. Despite the unprecedented sanctions against Russia by key Western business partners, Bangladesh is likely to continue doing business with the superpower.

One reason was the Russian support for Bangladesh during the 1971 Liberation War that delivered the country’s independence from Pakistan. Russia is also one of Bangladesh’s major trading partners and its biggest supplier of wheat, oil and fertiliser and the country helped develop Bangladesh’s first nuclear power plant at Rooppur, Pabna. 

Khondaker Golam Moazzem, industrial economist and research director of Centre for Policy Dialogue, added Bangladesh exports ready-made garment products, mainly knitwear, woven, leather, some agro-products and a few light engineering products, to Russia.

As with the rest of the world, Moazzem said the war has impacted Bangladesh in terms of inflation in oil and fertiliser prices as the country now imports these products from alternative sources like Brazil.

This will eventually translate into hiked electricity, gas and food prices with Moazzem stressing the government faced the potential of increasing oil and fertiliser subsidies as a cost-reduction measure given inflation was affecting consumers’ purchasing power. 

“One solution Bangladesh can explore is taking a short-term soft loan from international banks like the Islamic Development Bank or World Bank to (help fund) subsidies,” Moazzem said.  

As for garment exports to Russia, according to the financial newspaper Business Insider Bangladesh, the country exported goods worth $700 million to Russia in the fiscal year 2020-21 of which 90% was ready-made garments.  

The problem now was that international sanctions by the European Union, US, UK, Japan and Australia on Russian banks and major companies, including the exclusion of major state-linked banks from global financial payment network SWIFT, was impeding the receipt of payments for up to 300 Bangladeshi factories, said Mohiuddin Rubel, director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).  

“The government is trying to find an alternative transaction system. They are holding dialogues with Russian counterparts, but when it will see the daylight is a matter of concern,” he added, indicating one solution being explored was for Bangladesh to use other banks not subject to SWIFT’s sanctions.

The country can also explore making transactions via a third country such as China or Iran.

Meanwhile, Russia has expressed interest in importing potatoes from Bangladesh to better secure its food supplies with Rubel saying this could be a potential future market.

However, Moazzem warned that Bangladesh should be careful about building new diplomatic and economic relationship with Russia and advised the government watch the trade policy of its neighbour India among others “to be on the safe side with both Russia and the Western world”. 

The GCC’s stance

With their multifaceted relations with Moscow and ties to the West, the six Gulf Cooperation Council (GCC) states, namely Saudi Arabia, Kuwait, Qatar, Bahrain, Oman and the United Arab Emirates (UAE), have taken a neutral position. The UAE, that the country’s state-news agency WAM credits with being the largest Arab investor in Russia and accounting for more than 80% of Arab investments in the superpower, has particularly high stakes in the crisis and has refrained from sanctions.  

More than 4,000 Russian companies operate in the UAE and several dozens of Emirati companies are registered in Moscow, including Abu Dhabi’s sovereign investor Mubadala, with more than $3 billion in Russian investments.  

The UAE is also Russia’s second-largest Arab trading partner. In 2021 foreign trade between the two countries reached $4 billion, up from $3.3 billion the previous year, states WAM.  

“Many of the Gulf-based sovereign wealth funds have significant exposure to investments in Russia, often in partnership with the Russian Direct Investment Fund and have already suffered significant drops in their value,” said Kristian Ulrichsen, a non-resident senior fellow at the Arab Centre Washington.  

The Russian Direct Investment Fund has been heavily sanctioned by the West.

Russia’s flagship carrier Aeroflot has halted international flights, including to the GCC region, while Dubai’s government-owned low-cost airline flydubai has suspended certain flights to Russia. However, the UAE’s Emirates, AirArabia and Etihad Airways, the UAE’s second flag carrier, continue to operate Russia flights.  

“Travel restrictions and downward pressure on the Russian currency, along with individual sanctions and sanctions on Russian banks and firms, could impact on the (GCC) region’s property and hospitality sector. Conversely, the conflict could encourage some financial transfers and efforts to conceal assets in the Gulf,” said Karen Young, senior fellow and director of Program on Economics and Energy at the Middle East Institute.  

The influx of capital to Dubai through Russians looking for safe financial havens has created lucrative opportunities for the real estate sector. Tabani Real Estate, one of the oldest brokerage firms in Dubai, participated in last year’s Moscow Overseas Property & Investment Show and said it was “overwhelmed” by the response received regarding its properties.  

Emirati business executive Hussain Sajwani, founder of Dubai property developer DAMAC, similarly told CNBC the UAE stood to benefit as Russians seek to protect sanctions-threatened fortunes.  

By contrast, the tourism sector is expected to take a blow as the UAE heavily depends on Russian tourists. In 2021 Russia was the second-largest source market for tourists in Dubai, with nearly 440,000 people visiting the city – a 50% hike on the 2020 figures, according to government statistics.  

“Dubai can discount tourism from Russia for the time being. With the collapse of the Russian ruble, along with the likely increase in travel costs due to oil supply generated inflation, it will be very expensive for Russians to travel and invest overseas,” said Mohanad Alwadiya, CEO at Harbor Real Estate.  

Equally, the invasion has raised GCC food security concerns, said Li-Chen Sim, assistant professor at Khalifa University in Abu Dhabi. 

Among the GCC, the UAE, Oman and Qatar have significant dependence on wheat imports from Russia and Ukraine. Between 2015 and 2019, Russia and Ukraine increased their market share from one-third to almost half of all wheat imported by the UAE, said Sim.  

She said while ample grain storage facilities mean there is no short-term danger of supply shortages in the UAE, in Saudi Arabia – which only opened its market to Russian wheat in 2020 – the disruptive effects on supply reliability may cause it to re-evaluate increasing wheat imports from Russia to offset declining local production.

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Farmers have been hit particularly hard with the cutting off of their main export market of Saudi Arabia after the Kingdom in late October 2021 barred all Lebanese agriculture from entering its borders, citing a series of recent drug smuggling attempts, allegedly hidden in fruit and vegetable shipments. And because Lebanese trucks are not allowed to traverse Saudi Arabia’s territory, their access to other Gulf markets has been severely impacted as shipments must now travel by sea, according to Ibrahim Al Tarshishi, head of the Farmers Association in the Bekaa Valley, Lebanon's main agricultural region. 

According to data from the International Trade Centre, Lebanese exports to Saudi Arabia amounted to $247 million in 2020, with fruits and vegetables topping the list and worth around $36 million. The leading crops are potatoes, followed by tomatoes, cucumbers, gherkins, grapes, apples, cherries, figs, mint, coriander, parsley and radishes.

“Due to the ban, our sale prices are falling down to the ground and there are fewer customers,” said George Hana Fakhry, member of the Social and Economic Council (SEC) at the General Council for Agricultural Trade Unions in Lebanon. “I had to sell my products at very low prices, often less than the cost of production,” he said.

Agriculture is the second biggest employer in Lebanon following the services sector. It represents 4% of total employment in Lebanon, including nearly 64,000 workers, half of whom face dire circumstances as a direct result of the ban.

“Everything is expensive due to the collapse of the currency and now the export ban. I buy all my materials with US dollars and yet I have to sell them in Lebanese Lira,” said Ali Shokor, a farmer from the Bekaa.

Most farmers are employed seasonally, mainly in the summer to cover the high cost of winter heating. “Before the ban, Lebanese merchants who export to the Gulf used to come and buy my products, but this season I have not seen any of them,” Shokor said. “So I sold my products in the local market at low prices, without being able to save any money for winter. I do not know how we will make it.”

Saudi-Lebanese trade iis more than 60 years old, Tarshishi said, adding: “We have inherited these markets from our parents and planned on passing them to our sons because our parents have worked so hard to build trust between us and the Saudi merchants.” He said there were no alternative markets to turn to.

“We hope the Lebanese government takes some steps to solve the ban issue to go back to normal relations and to live in peace,” he said. A food security crisis is looming for the country, and a collapse of the agriculture sector will only hasten its arrival, Tarshishi said.

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There will be much to discuss at the General Secretariat of the OIC’s 35th session of the Islamic Committee of the International Crescent (ICIC) on 5 January. While there are pockets of stability and socio-economic development in the OIC, notably the Gulf countries and the more economically developed Southeast Asian nations of Malaysia and Indonesia, the challenges are particularly acute in the Middle East, Africa and Central Asia, with humanitarian crises, rising unemployment, inequality and inflation.

According to medical and security specialist International SOS’s Risk Outlook 2022, OIC countries are among the most ‘extreme’, with Afghanistan, Syria, Libya and Iraq in the top five most dangerous countries to visit this year. Other nations in the ‘extreme’ category include Mali, Yemen, and Somalia as well as certain parts of Nigeria and Pakistan.

Yet while the situation is difficult in much of the OIC, it is the same across much of the world, with the World Bank and World Health Organisation estimating more than half a billion people were pushed into extreme poverty in 2021.

North Africa and the Sahel

In North Africa, the instability in Libya over the past decade continues to impact the region and its neighbours. Libya was a major destination market prior to 2011 for exports and foreign labour, which has largely dried up, while the political situation has remained fragile.

The pandemic hit the country hard, with the economy contracting by 36.4% in 2020, according to Fitch Solutions, although is set for a rebound this year on the back of higher oil prices. The Libyan conflict has had dire spillover consequences for the Sahel region, with the French military and UN presence in the region spluttering since 2013.

Last year was the most violent in the past decade for Mali, Bukina Faso and Niger, with 2,246 terrorist attacks and battles, compared to 244 in 2013, and 5,317 deaths, according to the Armed Conflict Location and Event Data project. Instability in the Sahel and parts of North Africa are also feeding the drive to migrate to Europe, with the area a conduit for human trafficking routes to Libya and beyond.

As the Europe Union’s response continues to focus on the military in the Sahel, and through strengthening its border force, Frontex, which is set to having a standing force of 10,000 by 2027, major challenges for the region are set to continue. In 2022, the UN notes that more than 30 million Sahelians will need assistance and protection, over 1 million more than 2021. Some 3.5 million people have been forced to flee their homes.

Sub Saharan Africa

The pandemic has disrupted economies across Africa, with the IMF estimating an additional 30 million people have been plunged into extreme poverty. On top of the impact of COVID-19, conflict and severe climatic events are causing further instability. Millions of people have been displaced over the past year in Ethiopia, Cameroon, Nigeria, and the Sahel.

In West and Central Africa, the crises are impacting more than 61 million people, with 28 million currently food insecure, notes the UN. Climate change, heavy rains and flooding affected more than 1.2 million people in 13 countries in 2021. In Southern Africa, the picture is also not rosey, with drought across much of the region. In Eastern Africa, the Ethiopian conflict has impacted the whole region, while political instability in Sudan is also causing negative ramifications.

On the flip side, Sub-Saharan African economies are forecast to grow by 3.8% in 2022, largely on the back of improved global trade and commodity prices. However, food inflation is expected to be particularly challenging, having risen from 2% per year in 2019, to 11% in 2021, while globally, food inflation rose 30% in 2021, according to the IMF.

The Middle East

The conflicts in Syria and Yemen continue to loom large over the Middle East. While signs of rapprochement between Gulf states and Syria holds some promise for greater stability, the Syrian economy has been ravaged, and there seems minimal funds available for substantive reconstruction to take place. The Syrian conflict, which is entering its twelfth year, is also hobbling the chances of Lebanon’s economic recovery, which has been hit by a financial crisis since October 2019, and the depreciation of the currency by over 90%.

Syria’s currency has also seriously depreciated, in part due to the Lebanese financial crisis, with the country having been Syria’s business and financial window to the world, and a major destination for deposits. Lebanese parliamentary elections in March are not expected to cause a sea-change amid deteriorating economic conditions, with an estimated 70% of the population on or below the poverty line.

In Iraq, the country is still reeling from the US-led invasion and the wider Syria conflict, while a record low rain-fall in 2021, has impacted the agricultural sector. In neighbouring Turkey, the lira’s deprecation by 44% to the US dollar in 2021, has caused serious problems for the economy, with the cost of energy and inflation rising, although exports reached an all-time high on the back of the weak lira.

In Yemen, over six years of conflict has devastated the country, with over 20 million people in need of aid – equivalent to 66% of the population – and over 4 million internally displaced.

Southern Asia

The withdrawal of US and NATO military forces from Afghanistan in August 2021, attracted significant global media attention, but the aftermath has been less covered as the country has descended into further economic malaise. OIC countries gathered in Islamabad, Pakistan, to discuss the Afghan humanitarian crisis in December, agreeing to help Afghanistan on humanitarian grounds and the Islamic Development Bank to establish a Humanitarian Trust Fund.

The poorest country in Asia, per capita incomes declined from $650 in 2012, to $508 in 2020, and is forecast to drop to $350 this year, according to UN figures. Afghanistan’s GDP is slated to decline by 20%, to $16 billion, and could potentially decline by 30% if the situation continues to deteriorate. Some 22.8 million face acute food insecurity.

Neighbouring Pakistan continues to be impacted by the Afghan crisis, but the economy is looking more optimistic this year, with growth forecast at 3.2%.

On the other side of the Indian subcontinent, Bangladesh has had a tough couple of years, with the pandemic impacting the economy, and the country hosting 884,000 Rohingya refugees. The outlook for 2022, is more positive, with the country’s biggest export segment, garments, set to rebound as buying increases in the major export markets of Europe and North America, while the economy could reach half a trillion dollars this fiscal year if double-digit growth is achieved.

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