Global Risk Indexes (04-01-2025)

Global 93 (-1 ▼)
MENA 98 ( —)
APAC 96 ( —)
Europe 95 ( —)
Africa 85 (+1 ▲)
AMERs 93 (+1 ▲)
Markets 92 (-4 ▼)
Farid al-Khaleqi, Middle East region analyst at Worldwise Analytica

Farid al-Khaleqi

Navigating the Sands of Time, Illuminating the Geopolitical Horizon

MENA Under Strain: Gaza Escalations, Syrian Governance Hurdles, and Gulf Realignments

The Middle East remains a focal point of geopolitical tension as Israel's military actions escalate in Gaza, Syria's new rulers face governance and diplomatic challenges, and Gulf economies adapt to shifting global dynamics. These developments underscore the interconnected crises defining the region.

Israel's military campaigns in Gaza continue to exact a heavy toll. Over 110 Palestinians were killed in two days of airstrikes, with more than 45,600 deaths reported since October 2023. Strikes targeted Hamas command centers and civilian areas, including a humanitarian safe zone in Al-Mawasi. Severe winter weather compounds the humanitarian crisis, with displaced families struggling in makeshift shelters. Concurrently, ceasefire talks mediated by Qatar, Egypt, and the United States resumed in Doha, reflecting the fragile and contentious nature of conflict resolution efforts. Hamas' demands for a complete withdrawal and Israel's insistence on Hamas' destruction underline the persistent impasse.

Syria's transitional administration, led by HTS, faces mounting challenges in consolidating power and fostering inclusivity. Plans for a national dialogue to chart Syria's post-Assad future remain stalled amidst accusations of opaque preparations and limited outreach to opposition groups. Foreign delegations from Riyadh signal a cautious engagement by Gulf states, with Saudi Arabia emphasizing stability and humanitarian aid. However, restrictions on Lebanese border crossings and reports of Assad-era family evictions highlight lingering societal divisions and governance hurdles.

Gulf economic strategies are navigating a complex landscape. The UAE's stock market saw declines due to profit-taking, with Dubai and Abu Dhabi indices reflecting mixed performances. Rising oil prices offer short-term relief but underline the Gulf's dependence on volatile energy markets. Saudi Arabia's efforts to recalibrate fiscal policies, including a $2.5 billion credit facility, underscore the region's balancing act between economic diversification and immediate fiscal needs.

Islamic State's resurgence continues to pose a security threat. Lone-wolf attacks, such as the New Orleans truck-ramming incident, reflect ISIS' ability to inspire violence despite territorial losses. Concerns over its resurgence in Syria amid governance gaps heighten risks, as the group seeks to exploit regional instability to regain influence.

Strategic implications: The MENA region's multifaceted crises necessitate urgent and coordinated international efforts to address escalating conflicts, governance challenges, and economic vulnerabilities. Israel's military campaigns and Syria's transitional governance highlight the fragility of post-conflict environments, while Gulf economic adjustments reveal the interplay between energy dependency and diversification efforts. Without sustained engagement, the risks of prolonged instability and spillover effects will grow.

Geopolitical Risk Assessment for the Middle East
(04-01-2025)

The MENA region continues to grapple with severe geopolitical challenges, from Israel's intensifying operations in Gaza and its broader regional implications, to Syria's transitional governance struggles and Gulf economic recalibrations. These dynamics highlight the region's persistent volatility and its critical role in shaping global stability.

Geopolitical Risk Index

Developments to Follow for the Middle East (See All Global)

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