Middle East, not the West, should lead rebuilding, say experts

Reuters

• Palestine and Lebanon hit hard
• Region’s conflicts costing billions
• Private sector demands stability

Rebuilding Palestine and Lebanon will take upwards of a decade once the conflict between Israel and Hamas and Iran-backed Hezbollah ends, according to the International Monetary Fund. But the two countries should be assisted by Middle East neighbours and not left in the hands of Western superpowers, say experts.

The United Nations Development Programme’s initial estimates for the reconstruction of the Gaza Strip come in at more than $30 billion. Lebanon will need $250 million a month to help more than 1 million people displaced by Israeli attacks, according to Nasser Yassin, the country’s minister in charge of responding to the crisis.

Since hostilities began on October 7 last year more than 43,100 people have died.

Jihad Azour, regional director of the IMF, told a media briefing on Thursday that rough estimates were for the Gaza economy to contract by 80 percent this year. Lebanon’s GDP is to drop by “north of” 10 percent, he said.

Azour said that even if a peace deal were brokered tomorrow it would take around 10 years to build back up the damaged areas of Palestine and Lebanon. Even then, GDP would still be 10 percent lower than before the conflict started.

“This is much lower than other countries in the world who went into conflict,” he said. “It’s very important to help those countries survive.”

Economist Nasser Saidi, founder of Nasser Saidi and Associates and AGBI columnist, said the cost to rebuild countries in the region impacted by conflict in recent years – including Iraq, Syria, Lebanon, Jordan, Egypt, Sudan, Libya and others – could be as much as $2.5 trillion.

“The private sector will not invest until they see stability and a political strategy,” he said.

He suggested forming an organisation called the Arab Bank for Reconstruction and Development to unite the countries in the region in helping rebuilding efforts.

The Middle East already has the Arab League, formed in Cairo in 1945, which has 22 members. Its goals are to coordinate collaboration, safeguard sovereignty and  independence, and consider the interests of the Arab countries.

However, Paul Salem, vice president for international engagement at the Middle East Institute, branded it a “dead institution”. 

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In late October more than 70 countries met in Paris, where they pledged $1 billion in humanitarian aid and support for the Lebanese army.

US secretary of state Anthony Blinken has completed 11 visits to the Middle East in the last year as he tries to broker a peace deal.

Salem, who believes a period of de-escalation in the ongoing conflict is “heading closer”, said it was up to countries in the Middle East to take care of their own affairs. “The region needs to stop looking to the US to solve its problems, which we have done for many decades,” he said.

“It’s time, given the maturity of these countries in the GCC and other places, their leadership and vision, both regionally and globally, to step up and do the hard work of organising our region rather than waiting for US presidents to do it for us.”

The conflict is also weighing heavily on the economies of countries across the Middle East and North Africa. The IMF has downgraded its growth projection for the region to 2.1 percent for 2024 in what is the fourth time it has dropped since a 3.4 percent growth estimate in October 2023.

The forecast for next year has also been revised down 0.4 percentage points to 4 percent.

Projections for the UAE and Saudi Arabia are slightly more positive for 2025 at 5 percent and 4.2 percent respectively,

“The recent escalation in Lebanon has greatly increased the uncertainty,” said Azour.