Global Risk Indexes (17-01-2025)

Global 96 (0 —)
MENA 97 ( —)
APAC 98 ( —)
Europe 98 ( —)
Africa 91 (+2 ▲)
AMERs 97 (-1 ▼)
Markets 96 (+3 ▲)
Farid al-Khaleqi, Middle East region analyst at Worldwise Analytica

Farid al-Khaleqi

Navigating the Sands of Time, Illuminating the Geopolitical Horizon

Ceasefire in Gaza, Shifting Alliances, and Strategic Rivalries Define MENA's Unsteady Path

The Middle East continues to witness seismic shifts as ceasefire agreements, political recalibrations, and economic realignments shape its trajectory. Key developments on January 17, 2025, highlight the region's fragility and the complexities of managing intertwined conflicts and alliances.

The Gaza ceasefire agreement represents a moment of cautious optimism, but its fragility cannot be overstated. After 15 months of devastating conflict, the truce, mediated by Qatar, Egypt, and the U.S., paves the way for phased hostages-for-prisoners exchanges and a gradual Israeli troop withdrawal. However, Hamas' future role, coupled with Israeli hardliners' opposition to the deal, underscores the enduring challenges. National Security Minister Itamar Ben-Gvir's threat to resign from the government reflects internal divisions, while intensified bombardments in Gaza post-announcement highlight the ongoing risks of escalation. Meanwhile, the humanitarian crisis in Gaza remains catastrophic, with $10 billion estimated for rebuilding its healthcare system alone.

Lebanon's political realignment continues to evolve as French President Emmanuel Macron visits Beirut to bolster support for the new government. Prime Minister Nawaf Salam and President Joseph Aoun, with backing from Western and Gulf actors, face the daunting task of implementing reforms amidst sectarian tensions. Saudi Arabia's potential financial support signals renewed Gulf engagement, but Hezbollah's exclusion from governance risks exacerbating divisions, potentially destabilizing the delicate balance achieved after years of political deadlock.

Syria's transitional phase presents opportunities for stabilization but remains fraught with challenges. U.N. forces are poised to enter buffer zones to mitigate tensions with Israel, while Turkey pushes for the removal of PKK-linked groups in northeastern Syria. The evolving U.S.-Turkey-SDF dynamic reflects a broader contest over Syria's post-Assad future, with implications for Kurdish autonomy and regional stability. Qatar's diplomatic overtures, marked by its Prime Minister's visit to Damascus, signify attempts to engage Syria's new administration, though deep-seated mistrust persists.

Yemen's Red Sea conflict underscores the ongoing proxy dynamics involving Iran, Israel, and regional actors. Houthi attacks on ships have disrupted global trade, compelling rerouted shipping and elevated insurance rates. Speculation of a Houthi ceasefire signals potential de-escalation, but skepticism remains, as maritime security officials warn of continued fragility in the region. The Houthis' alignment with Iran highlights the enduring influence of the 'Axis of Resistance,' even as Tehran recalibrates following setbacks in Lebanon and Syria.

The Gulf's economic resilience reflects a strategic pivot amidst global economic shifts. Saudi Arabia's lithium exploration and the UAE's deepening trade partnerships demonstrate ambitions to lead in energy transitions and global commerce. However, global monetary policies and volatile energy markets remain persistent vulnerabilities. The Gulf Cooperation Council's alignment with U.S. Federal Reserve rate decisions further ties its economic fortunes to external factors, necessitating diversification strategies.

Strategic Implications: The Gaza ceasefire is a critical but precarious step toward de-escalation, requiring sustained international support and robust mechanisms to address humanitarian and governance challenges. Lebanon's political realignment offers a pathway to stability but hinges on managing sectarian tensions and securing Gulf investment. Syria's transitional governance demands inclusive reforms to prevent renewed conflict, while Yemen's Red Sea dynamics emphasize the urgency of maritime security. As the Gulf adapts to energy transitions, its broader geopolitical posture underscores the interconnectedness of regional and global stability.

Geopolitical Risk Assessment for the Middle East
(17-01-2025)

The MENA region remains volatile despite a ceasefire agreement in Gaza, as unresolved governance issues, intensified geopolitical competition, and economic pressures intersect. Strategic recalibrations by major powers and regional actors underline the fragility of the status quo.

Geopolitical Risk Index

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

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