Yemen + 6 more

Circularity as a lifeline for MENA economies in distress

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Analysis
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EXECUTIVE SUMMARY

In the past decade, the economic situation in the Middle East and North Africa (MENA) region has deteriorated as a result of continued instability driven by geopolitical, intra-religious conflicts, natural resource availability and stalled economic and governance reforms, resulting in political, institutional, and economic fragmentation. Though some shifts towards progress were noted in the wake of the Arab spring through popular mobilization, demonstrations and democratic aspirations, subsequent years also witnessed tension and conflict as a fallout of revolutions.

Key factors such as high unemployment, in particular for MENA’s youth, costly and ineffective public services, as well as high energy subsidies, are preventing sustainable recovery, and many countries have slipped into particularly dire economic situations, with currency devaluation reaching record levels in Yemen, Lebanon, Syria and more recently Iraq.

The COVID-19 pandemic only exacerbated ongoing economic and financial crises, due to border closures, restrictions on individual movement and business operations and increased public costs from public health and containment measures, ultimately driving millions of the region’s population into dependence on humanitarian assistance.

In this context, the effects of climate change and resource deterioration are acting as conflict multipliers in the region, exacerbating the aforementioned issues.

While environmental preservation is often deprioritized or considered as non-essential in times of dire economic crisis, this briefing serves to highlight how the current context of sharp economic decline in MENA has triggered numerous unique opportunities for promoting a circular economy and circular resource management which could have catalytic effects in economic recovery. In these contexts, circular approaches have the potential to stimulate job creation, increase value extraction, increase productivity, reduce government expenditures and improve accessibility of public services.

This type of market-based approach can contribute to a more sustainable economic recovery in these regions, in which natural resource mismanagement contributes significantly to budgetary expenditures and degrades existing livelihood opportunities, putting long-term livelihood prospects of these populations at risk. While structural and legislative reform are other necessary factors to veritably develop circular market systems, it is essential for the relief and development community to seize these immediate opportunities in order to accelerate economic recovery through sustainable production and consumption practices, while pursuing the integration of these reforms into longer-term development plans.