Amid coronavirus crisis, wealthy Gulf States can no longer provide aid to struggling Arab neighbors and may soon lay off millions of foreign workers.
No sooner than one estimate is made of the economic damage the coronavirus epidemic is wreaking on the Middle East, a more dire forecast supercedes it. The Arab Tourism Organization, for example, is predicting losses of $40 billion in the tourism sector by the end of April if there is no change in the epidemic’s current direction, and that doesn’t include losses of more than $14 billion that airlines could suffer.
These estimates are based on the losses up to this point, but they don’t include indirect damage caused, for example, by the layoff of thousands of employees, compensation and assistance grants to the newly unemployed and to the airlines. In some countries in the region, including Egypt, Iran and Turkey, tourism is a strategic part of the economy, accounting for a significant portion of their GDPs. It could take between a year and a half to two years to rehabilitate them.
At the moment, these countries are split between those that are wealthy and hold huge foreign currency reserves that can help fund impressive economic assistance plans, and those that are poor and are now seeking to figure out how they will finance ongoing essential needs at a time when international financial institutions are concerned about making risky loans. In each of the countries in the region – both rich and poor – there are two simultaneous wars of survival being fought: One on the part of governments trying to protect their countries’ economies, and the other on the part of private citizens, who are looking for alternatives in the face of their governments’ powerlessness.
The United Arab Emirates and Saudi Arabia have established special funds with tens of billions of dollars in financing, and through which they are funneling grants and loans at negligible interest rates to business owners and private citizens. At the same time, in Syria, Jordan and Morocco, the assistance is measly at precisely a time when citizens are being disgracefully exploited by major companies and by the suppliers of food and other essential products. That’s in addition to the transportation problems that the people are encountering trying to get to the jobs that still remain.
In a video posted on a Syrian website, a group of young people explained how they decided to set up a production line at home to make disinfectants. With large tanks of liquid and a hand mixer as a backdrop, they are seen filling plastic bottles with sanitizing liquid through a cloth funnel, as they explain that in their town, the besieged city of Idlib, no disinfectants remained.
Other reports from Syria recount how merchants have hoarded huge quantities of disinfectants in recent months and are now selling them at prices ten times the going rate prior to the coronavirus pandemic. In Saudi Arabia, the authorities also discovered a giant warehouse with about a million face masks. In Morocco, packages of 50 face masks are being sold for about $50. Before the outbreak, they were going for $3.50.
Lodging a complaint with the region’s health ministries over price gouging is generally futile in the absence of sufficient manpower to provide oversight. In an expose, the Al-Araby Al-Jadeed website reported that a cadre of merchants and smugglers in much of the Arab world is currently reaping huge profits on the sale of masks and gloves, most of which don’t meet international standards and may even endanger the users’ health.By Zvi Bar’el