According to a brief published the United Nations Economic and Social Commission for Western Asia (ECSWA), the coronavirus crisis could cause more than 1.7 million people in Arab countries to lose their jobs 2020.
The coronavirus crisis is set to endanger the jobs of over 1.7 million people living in the Middle East and North Africa. A report released by the United Nations Economic and Social Commission for Western Asia found that unemployment will rise by 1.2% as the outbreak impacts businesses across the region.
In response to the coronavirus pandemic, governments across the MENA region are instructing businesses to shut, employees to work from home and public spaces to close. The ECSWA report found that the services sector will be the worst hit. This includes companies focused in retail, tourism and recreation among others.
Since January this year, the region has suffered a $420 billion loss of market capital. This constitutes 8% of the total market capital, a detrimental impact on the region.
The report suggests the coronavirus outbreak has resulted in a significant reduction in oil prices. This, along with the recent Saudi-Russia price war, is detrimental for a region that relies so heavily on oil revenues. The ECSWA evaluation shows that these factors have already cost the region $11 billion in net oil revenues between January and mid-March of this year.
The GDP of Arab states is expected to decline by at least $42 billion in 2020. However, the report warns that this number could increase, as closure of private enterprise and public institutions, combined with the drop in oil prices will have a compounding effect on the economy of Arab countries. The report warns that the longer the lockdown, the higher the economic cost.
ECSWA has recommended that governments in the MENA region begin a coordinated response. Social protection should be improved and should focus on the poor and vulnerable groups in society. Businesses should be supported, through wage subsidies, a postponement of debt obligations, and an extension of tax exemptions.
The coronavirus has already reached many countries in the MENA region, with the number of cases increasing each day.