One month of the American-Israeli war with Iran could plunge four million more people across the Arab world into poverty and shave off up to 6 percent of the region’s economic output during that time, according to projections by the United Nations Development Program.
The report, released on Tuesday, uses an economic simulation to project the effects of an ongoing conflict, and warns of “profound and widespread socio-economic impacts across the Arab region.”
Abdallah Al Dardari, the director of the U.N.D.P.’s regional bureau for Arab states, told The New York Times that the projections were based on just four weeks of war, which the current conflict has already exceeded.
He said that the agency had used such a simulation to predict the economic impact of the war in Gaza and Israel’s last offensive against the Iran-backed Hezbollah militia in Lebanon in 2024. According to the models, he said, the economic damage of the current war gets exponentially worse as the conflict drags on.
“Every week we add to the destruction, the structural weaknesses sink in and that will make the recovery more difficult and more costly,” he said.
One month of war, Mr. Al Dardari said, is projected to cost the Arab region $194 billion in lost economic output, a downturn he described as “unprecedented.”
As the war inflicts economic pain across the world, Arab nations in the Middle East are particularly vulnerable. Gaza and Lebanon were already facing huge reconstruction needs after the most recent Israeli military offensives. Syria is also in dire need of investment as it tries to recover from a 13-year civil war.
Now, regional officials warn that the current war could tip more countries, including Iraq, Jordan and Egypt, into severe economic crises. Egypt, the most populous Arab country, at around 120 million people, is already facing the strain of rising fuel prices and is struggling to finance its heavy debt. Like many countries in the region, it is also reliant on investments from oil-producing Gulf countries whose energy production has come under attack during the war.
Dependency on Gulf investments is a dilemma that the region must grapple with in the years to come. Even after the war ends, Mr. Al Dardari said, the Gulf nations that have often bankrolled postwar rebuilding efforts in the Middle East will be consumed with funding their own economic reconstruction.
“There isn’t enough surplus revenue in the Gulf to invest in the recovery of those countries,” he said. “That’s a structural challenge we never faced before.”
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