Global Risk Indexes (28-01-2025)

Global 96 (0 —)
MENA 95 (+1 ▲)
APAC 96 ( —)
Europe 98 (+1 ▲)
Africa 97 (+1 ▲)
AMERs 95 (-1 ▼)
Markets 96 (-1 ▼)
Farid al-Khaleqi, Middle East region analyst at Worldwise Analytica

Farid al-Khaleqi

Navigating the Sands of Time, Illuminating the Geopolitical Horizon

Gaza Ceasefire and Syrian Transitions Highlight Fragile Progress Amid Escalating Proxy Rivalries in MENA

The Middle East and North Africa on January 28, 2025, illustrates a dynamic interplay between fragile ceasefires, persistent proxy conflicts, and shifting political landscapes. While efforts to stabilize Gaza and rebuild Syria gain traction, regional power rivalries and humanitarian challenges remain critical flashpoints.

The situation in Gaza reflects the delicate balance required to maintain the fragile ceasefire. Tens of thousands of displaced Palestinians began returning to northern Gaza, with approximately 300,000 crossing back over the past 24 hours under tight security protocols overseen by Egyptian and Qatari contractors. Despite the momentous nature of these returns, challenges remain profound, with 650,000 displaced individuals still in limbo. Hamas' commitment to releasing hostages has temporarily stabilized the situation, but continued Israeli airstrikes, including the targeted killing of militants in Tulkarm and Jenin, highlight the risks of renewed escalation. Internally, Hamas has consolidated its control over Gaza's reconstruction process, underscoring its entrenched role as a political and security actor. The phased release of hostages'coordinated through Qatar'remains central to this fragile truce, but public skepticism in Israel, coupled with political tensions, underscores the uncertainty surrounding the ceasefire's durability.

Meanwhile, the Lebanese-Israeli border remains tense, with clashes leaving 24 Lebanese citizens dead amid growing frustration over Israel's extended military presence in southern Lebanon. Hezbollah has sharply criticized U.S.-led efforts to extend the ceasefire deadline, calling for immediate Israeli withdrawal. This rhetoric, combined with escalating violence, reflects Hezbollah's broader agenda to leverage its regional influence, particularly against a backdrop of heightened Iranian-Israeli tensions.

Syria continues to undergo significant transformations following Bashar al-Assad's ousting. The EU's gradual easing of sanctions, starting with energy and transport sectors, marks a strategic effort to foster economic stability and encourage refugee returns. However, these efforts remain limited by lingering divisions within the bloc over broader financial restrictions. The interim government's focus on financial reform, including unfreezing certain bank accounts, indicates an attempt to jumpstart economic recovery, though it faces substantial hurdles in gaining international trust and securing necessary investments. Refugees' cautious optimism about returning underscores the importance of inclusive governance and sustainable reconstruction efforts to ensure long-term stability.

In Yemen, the Red Sea remains a focal point of global concern. Houthi actions continue to disrupt maritime security, despite their strategic recalibration to focus on Israeli-linked vessels. The detention of U.N. personnel and sporadic attacks emphasize the Houthis' alignment with Iran's regional strategy, highlighting the broader implications of proxy conflicts for global trade and regional stability.

On the economic front, Saudi Arabia's expanded foreign investment initiatives signal its ongoing effort to diversify and strengthen its economic position amidst shifting global dynamics. The opening of Mecca and Medina real estate markets to foreign investment highlights Riyadh's ambition to attract capital while leveraging its religious tourism industry. Similarly, Abu Dhabi's acquisition of stakes in healthcare ventures across Europe and the Gulf reflects the UAE's broader strategy to transition away from oil dependency. However, these initiatives underscore the uneven progress of economic diversification across the Gulf Cooperation Council states.

Strategic Implications: The developments across MENA reflect a fragile equilibrium that demands sustained multilateral engagement. The Gaza ceasefire underscores both the potential for de-escalation and the inherent risks of unresolved governance disputes. Tensions along the Lebanese-Israeli border and in the Red Sea illustrate the enduring impact of proxy conflicts on regional stability. Syria's transitional progress and Gulf economic recalibrations highlight the importance of inclusive strategies to address both immediate and long-term challenges. Without comprehensive coordination, these dynamics risk perpetuating instability across the region.

Geopolitical Risk Assessment for the Middle East
(28-01-2025)

The MENA region remains entrenched in a volatile equilibrium, characterized by precarious ceasefires, intensifying proxy rivalries, and systemic humanitarian crises. While progress in Gaza and Syria offers a glimmer of hope, broader regional power struggles and economic fragilities sustain high geopolitical risk.

Geopolitical Risk Index

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

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