Global Risk Indexes (31-01-2025)

Global 98 (+1 ▲)
MENA 96 (+1 ▲)
APAC 97 ( —)
Europe 99 (+1 ▲)
Africa 98 ( —)
AMERs 97 ( —)
Markets 99 (+2 ▲)
Farid al-Khaleqi, Middle East region analyst at Worldwise Analytica

Farid al-Khaleqi

Navigating the Sands of Time, Illuminating the Geopolitical Horizon

Gaza's Ceasefire Strains, West Bank Tensions Surge, and Lebanon's Crisis Deepens: MENA on the Brink of Wider Unrest

The Middle East remains in a state of precarious stability as the ceasefire in Gaza faces major challenges, Israel's expansion of military operations in the West Bank threatens broader escalation, and Lebanon's economic and security crises deepen. Additionally, Syria's new leadership is implementing sweeping economic reforms that could redefine the country's post-Assad trajectory.

The humanitarian crisis in Gaza continues to worsen despite ongoing ceasefire efforts. The European Union has reactivated its border monitoring mission at the Rafah crossing, aiming to facilitate aid deliveries and medical evacuations. However, logistical constraints, Israeli-imposed delays, and infrastructure destruction have significantly hampered efforts to stabilize the enclave. U.N. estimates suggest that the full reconstruction of Gaza could take over a decade, with over 50 million tons of debris still blocking roads and essential areas. The situation is further complicated by reports that Israel has halted the release of Palestinian prisoners under the ceasefire agreement, citing security concerns. This decision, combined with growing discontent among Palestinian factions, raises concerns about the sustainability of the truce.

In the West Bank, tensions have escalated dramatically following Israel's decision to expand military operations in Jenin and Tubas. Defense Minister Israel Katz confirmed that Israeli troops would maintain a long-term presence in Jenin, reinforcing fears that the West Bank could become a new focal point of conflict. The release of prominent Palestinian militant Zakaria Zubeidi as part of the prisoner exchange has added another layer of complexity, as he remains a key figure in the armed resistance. The resurgence of Israeli raids, mass arrests, and targeted assassinations in the West Bank risks triggering another uprising, particularly as the Palestinian Authority continues to lose influence.

Lebanon's economic and security situation is deteriorating further, with the U.S.-brokered ceasefire between Hezbollah and Israel at risk of collapse. Israeli airstrikes in the Bekaa Valley and along the Syrian border have targeted Hezbollah arms facilities, exacerbating tensions. Meanwhile, UAE billionaire Khalaf Al Habtoor has confirmed that he will withdraw all planned investments from Lebanon, citing Hezbollah's dominant influence and security threats. The UAE's recent reopening of its embassy in Beirut suggests cautious diplomatic engagement, but without substantial economic support, Lebanon's financial crisis will continue to deepen. Hezbollah's ongoing alignment with Iranian interests remains a major point of contention, limiting Beirut's ability to attract Gulf investments.

Syria's new Islamist-led government is embarking on radical economic reforms that could reshape the country's financial system. The administration, led by transitional President Ahmed al-Sharaa, has announced plans to privatize state-run industries and cut the public workforce by nearly one-third. These measures aim to dismantle the Assad-era economic structure, which was heavily controlled by loyalist networks. However, the transition is proving turbulent, with government workers protesting against mass layoffs and concerns growing over the sectarian and ideological motivations behind the reforms. Meanwhile, Qatar has pledged to provide financial assistance to the new government, raising speculation about Doha's increasing influence in Syria's future.

Maritime security in the Red Sea remains a pressing issue as commercial vessels continue to face threats despite assurances from the Houthis that they will limit attacks to Israeli-linked ships. The burning of a Hong Kong-flagged container ship off Yemen's coast has reignited fears about the vulnerability of critical shipping routes. While the incident was reportedly unrelated to Houthi attacks, the broader risk of spillover remains high as Western naval coalitions increase patrols in the region.

Strategic Implications: The MENA region is at a crucial inflection point where the convergence of multiple crises'Gaza's stalled reconstruction, Israel's military expansion in the West Bank, Lebanon's economic collapse, and Syria's economic realignment'could reshape regional power dynamics. The risk of renewed conflict along the Lebanon-Israel border remains high, and maritime security concerns continue to impact global trade. Meanwhile, external actors such as Qatar and the UAE are playing a growing role in shaping Syria and Lebanon's future trajectories. Without coordinated diplomatic engagement, the current state of precarious stability is likely to deteriorate further.

Geopolitical Risk Assessment for the Middle East
(31-01-2025)

The MENA region remains volatile as Israel's intensified military actions in the West Bank, the deteriorating humanitarian crisis in Gaza, and Lebanon's worsening instability threaten to spark wider regional escalation. Meanwhile, Syria's political transition and economic restructuring could introduce both opportunities and risks. With maritime security concerns persisting and external actors increasingly involved, the regional risk level remains critically high.

Geopolitical Risk Index

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

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