"ESCWA" to Arabic: $140 Billion Bill for Trade Disruptions in the Region

Listen to the article. The audio text is automatically generated by a machine system.

Rania Al-Mashat, the Assistant Secretary-General of the United Nations and the Executive Secretary of the United Nations Economic and Social Commission for Western Asia (ESCWA), stated that trade disruptions, supply chains, and the rebuilding of infrastructure linked to crises in the region and the Iran war impose a cost estimated at about 4% of the regional GDP.

Al-Mashat explained in an interview with "Al Arabiya Business" that ESCWA's updated estimates from last June reduced the cost estimate from about $150 billion to $140 billion, noting that this decline reflects the ability of countries in the region to cope with disruptions through cumulative policies and measures that helped mitigate the severity of the decline witnessed in the early months of the crisis.

She added that the recent disruptions in Bab al-Mandab confirm that supporting routes cannot compensate for key bottlenecks, explaining that the repercussions of navigation disruptions are not limited to the economies of the region but extend to the global economy and markets in America, Europe, and commodity markets.

Al-Mashat pointed out that the repercussions of the crisis are not distributed evenly among Arab countries, noting that countries experiencing crises or emerging from them are among the most affected economies, followed by energy and food importing countries, while Gulf countries are relatively less affected.

It was confirmed that the reform efforts, diversification of economies, and investment in infrastructure over the past years have helped Arab countries to face the repercussions of the crisis, making its effects less than what was expected at the beginning of the disturbances.

Regarding the role of "ESCWA", Al-Mashat stated that the committee worked with Arab countries through a regional technical team for transport, logistics, and supply chains, focusing on maintaining business resilience and continuity and managing risks, in addition to developing mechanisms for coordination and early monitoring.

She added that the next phase requires doubling investments in ports and land, rail, and maritime connectivity networks, and assessing the necessary investment needs to mitigate the repercussions of any future disruptions in trade and supply chains.