Global Risk Indexes (23-01-2025)

Global 96 (0 —)
MENA 95 ( —)
APAC 96 ( —)
Europe 97 ( —)
Africa 93 (-1 ▼)
AMERs 97 (+1 ▲)
Markets 97 (+1 ▲)
Farid al-Khaleqi, Middle East region analyst at Worldwise Analytica

Farid al-Khaleqi

Navigating the Sands of Time, Illuminating the Geopolitical Horizon

Gaza Rebuilding, Yemen Tensions, and Evolving Gulf Strategies Shape MENA's Fragile Equilibrium

The MENA region on January 23, 2025, reflects a mix of fragile ceasefires, shifting alliances, and strategic recalibrations. Key developments highlight the interconnected risks and opportunities shaping the region's future.

The Gaza ceasefire continues to hold but exposes deeper governance and humanitarian challenges. While over 200 bodies have been recovered from rubble, the sheer scale of destruction'50 million tons of debris'is overwhelming local resources. The re-emergence of Hamas as the de facto authority underscores a governance dilemma for both Israel and international actors. Although rebuilding efforts, including bulldozer shipments from Egypt, are underway, the absence of a long-term political framework risks entrenching divisions. The Palestinian Authority's attempts to assert control at key crossing points signify a power struggle that could undermine broader peace efforts.

Yemen's Red Sea tensions remain a critical chokepoint for global trade. The Houthis, newly re-designated as a Foreign Terrorist Organization by the U.S., have limited attacks to Israeli-linked vessels but maintain their disruptive potential. The re-designation may bolster U.S. leverage against Iran's proxies but risks exacerbating Yemen's humanitarian crisis, with organizations like Oxfam warning of dire consequences for food and medical supplies. The alignment of the Houthis with Iran's broader strategy highlights the enduring risks of proxy warfare in this vital region.

Syria's post-Assad transition reflects cautious optimism amidst significant obstacles. Foreign Minister Shibani's calls for foreign investment and constitutional reform suggest an openness to engage international actors. However, the EU's potential suspension of sanctions faces resistance from member states concerned about retaining leverage. Meanwhile, Turkey's insistence on Kurdish disarmament continues to strain U.S.-Turkey relations, complicating Syria's stabilization.

Iran's dual strategy of conciliation and escalation reflects its attempt to navigate growing pressures. Vice-President Zarif's call for talks at Davos seeks to counter growing fears of military escalation, especially amidst accelerating uranium enrichment. However, Iran's increasing stockpile of weapons-grade material highlights the narrowing window for diplomacy. The potential for U.S.-Israeli strikes on Iranian nuclear facilities looms large, threatening regional stability.

Gulf economic recalibrations underscore both ambition and disparity. Saudi Aramco's entry into WTI trading reflects a strategic pivot toward integrating global energy markets, signaling Riyadh's adaptability amidst shifting demand dynamics. However, Qatar's efforts to attract foreign direct investment highlight its lag behind Gulf peers like the UAE and Saudi Arabia. Legislative reforms in Doha, including bankruptcy and public-private partnership laws, are necessary but insufficient to close the competitive gap, particularly given Qatar's negative FDI inflows in 2023.

Strategic Implications: The MENA region remains precariously balanced between fragile progress and systemic instability. Gaza's ceasefire highlights the need for sustained international engagement to prevent relapse into conflict and address governance challenges. Yemen's Red Sea disruptions illustrate the broader consequences of proxy conflicts for global trade. Syria's transitional governance and Iran's nuclear advancements underscore the risks of fragmented international strategies, while Gulf states' economic diversification efforts reveal both resilience and vulnerability. Without a coordinated multilateral approach, these dynamics will likely perpetuate instability across the region.

Geopolitical Risk Assessment for the Middle East
(23-01-2025)

MENA remains a region in flux, with ongoing geopolitical rivalries, fragile political transitions, and evolving economic initiatives. The interconnected crises in Gaza, Yemen, Syria, and broader Gulf dynamics underscore systemic vulnerabilities, requiring coordinated multilateral responses to prevent further destabilization.

Geopolitical Risk Index

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

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