ALBAWABA – We have previously reported on the effects of the ongoing Israel-Hamas war on neighboring Jordan’s economy, causing around $2.1 billion in losses for the economy; mainly caused by retraction of the tourism sector, which bring about 12 percent of the overall country’s Gross Domestic Product (GDP), it also resulted in fear among investors looking onto the country.
However, the economic effect of the war does not appear to be limited only to Jordan; as expected, the already economically-suffering region is being hit hardly by the war, with the United Nations Development Programme estimating a loss of $10.3 billion for Jordan, Egypt and Lebanon, which is about 2.3 percent of their overall GDP.
Aqaba-Jordan (Shutterstock)
This is coming at a time where Egypt and Lebanon are suffering critical financial crises, with the Egyptian Pound losing about half its value in the past couple of years and inflation reaching 39.7 percent, with some estimating the actual number to be upwards of 100%, and Lebanon still not close to recovering from its 2019 liquidity crises, which devalued the Lebanese Lira by 90 percent. Jordan, on the other hand, is still suffering from COVID’s impact as well as the country’s well-known high unemployment rate of 21.9 percent.
The red sea crisis, mainly caused by the Houthis is adding insult to the injury, with traffic from the Suez Canal down by 30 percent and revenue by 40 percent, according to financial expert James Swanston from Capital Economics. Jordan, being the world’s second exporter of Potash, has 76 percent of this output leaving through the Aqaba’s port on the red sea, which is expected to be disrupted largely by the situation.
Airline flights have also been hampered throughout the region, with bookings in Jordan down 18 percent, and 25 percent Lebanon, who’s Hezbollah is in combat with Israel’s northern region. The Egyptian Ministry of Tourism, however, claimed back in November that bookings are down only by 10 percent.
Cairo-Egypt, Daily Life (Shutterstock)
However, the region has been holding a boycott movement firmly since November, advocated for by BDS, a not violent protest movement meant to disrupt Israel’s economy by boycotting companies affiliated with it. According to a survey by Al-Jazeera, 91 percent of Jordan’s population believe in the boycott movement and its positive effects on pressuring Israel to end its bombardment on Gaza, with local merchants expecting it to improve local product sales and consumption as protesters look for alternatives to foreign products that support Israel.
