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The Oil Industry Is Impacting COVID Relief for the Middle East and Central Asia

Source: International Monetary Fund

Countries on x-axis as follows: Bahrain, Kyrgyzstan, Iran, Azerbaijan, Georgia, Morocco, Mauritania, Tajikistan, Uzbekistan, Djibouti, Saudi Arabia, Pakistan, Kazakhstan, Afghanistan, United Arab Emirates, Egypt, Tunisia, Armenia, Kuwait, Sudan, West Bank, Algeria, Jordan, Iraq, Qatar, Lebanon, Oman, Turkmenistan, Yemen

Countries in the Middle East and Central Asia have received the smallest COVID-19 economic relief packages compared to other regions across the world. Average fiscal support in the region is above 2% of GDP and has prioritized health care and vulnerable households and businesses, according to a July 2020 report from the International Monetary Fund. 

The relatively lower level of support — the global average hovers around 4% of GDP — is due to “constrained policy space among oil importers and existing sizable government support in the economy among most oil exporters.”

Many countries in the region were impacted by severe oil price fluctuations earlier this year, and although the deal made by OPEC+ helped stabilize the industry, prices are still extremely low. The region’s GDP is now projected to be -4.7% for 2020, the report says, making continued direct fiscal support an essential element of recovery.

The Great Commodity Bounceback

Source: World Bank

Most global commodity prices were higher than their pre-pandemic levels during the first quarter of 2021. Metal prices are expected to continue their upward trend, rising by 30% during 2021, according to the World Bank. This jump in commodity prices parallels the rise in global economic activity, the impact of stimulus bills and changes in supply factors.  

The crude oil industry saw a record-fast recovery after a price and demand collapse in 2020. The predicted average cost of crude oil for this year is $56 per barrel —  about one-third higher than its cost in 2020. Natural gas prices also rose by one-third as a result of increased demand during the winter season.

The World Bank expects that price levels will “remain close to current levels throughout the year” driven by “global economic rebound and improved growth prospects.” The report notes that all commodity markets heavily depend on how long the economic implications from the pandemic last and how well the risk is managed by governments.

COVID-19 Threatens Press Freedom Across the World

Source: Reporters Without Borders (RSF)

Note: White represents “Good Situation,” yellow represents “Satisfactory Situation,” orange represents “Problematic Situation,” red represents “Difficult Situation” and black represents “Very Serious Situation.”

Journalistic efforts were completely blocked or severely disrupted in 73% of the 180 countries analyzed in the 2021 World Press Freedom Index. Last year, only 7% had a “favorable environment for journalists,” compared to 8% of the countries in 2019.

“The coronavirus pandemic has been used as grounds to block journalists’ access to information sources and reporting in the field,” the report notes. The largest drop in ranking was Malaysia — down 18 places at 119 — as a result of increased censorship. Countries in Asia, the Middle East and Africa ranked the lowest due to internet censorship, surveillance and propaganda — especially in China, which ranked 177th. 

Norway ranked first in the index, followed by Finland and Sweden. Europe and the Americas remain the most favorable continents for press freedom, despite “abuses” and “violations” against press freedom increasing. At the same time, the public is putting an increasing amount of trust in business, as opposed to media, along with expectations for social leadership, according to Edelman’s latest Trust Barometer.

Climate Risk Costs Increased by $60 Billion in 40 Years

Source: Brookings analysis of NOAA National Centers for Environmental Information data

Note: Climate disasters refer to droughts, floods, freezes, winter storms, severe storms, tropical cyclones and wildfires costing at least $1 billion each

Climate disasters in the United States have accounted for over $1.8 trillion in economic costs since 1980. The country has endured over 285 climate-related catastrophes in the past 41 years that cost at least $1 billion each, according to Brookings Institute. These disasters are becoming more frequent and intense: In the 2010s alone, they cost $81 billion per year — up from $18 billion per year in the 1980s. 

Flooding is emerging as one of the most frequent threats, impacting coastal communities more severely than other communities. Brookings states that “mitigating and adapting to these pressures will require more resilient infrastructure systems.”

Brookings laid out a three-part framework for the federal government to address urgent climate risks: measuring infrastructure needs, modernizing physical assets and experimenting with new technologies. And President Joe Biden recently released a $2 trillion plan for improving infrastructure and shifting to green energy over the next eight years. 

Climate Summit Leaders Set Out Largest Emissions Cut Since 2015

Source: CAIT, Climate Action Tracker, Marsh McLennan Advantage

Note: 34 parties including the U.S. were analyzed from the 40 World Leaders invited to the Leaders Summit on Climate. Leaders from the European Commission, European Council, Denmark, France, Germany, Italy, Poland, and Spain were aggregated into one party—the “European Union”—for analysis. Total emissions data from 2018 was used and includes Land use, land-use change, and forestry (LUCF) and all greenhouse gases (CH4, CO2, F-Gas, N2O, etc.). Other parties not listed make up 1.9% of global emissions including, Chile, Jamaica, Antigua and Barbuda, Norway, Israel, Kenya, Gabon, Vietnam, Bangladesh, Singapore, Bhutan, Marshall Islands. The horizontal length of each region in the chart represents the share of total emissions of participants.

The Climate Leaders Summit last week set out the single biggest reduction in the global emissions gap since Paris, shaving off around two gigatonnes of carbon dioxide equivalent from 2030 emissions. (See footnotes 3 and 4 below.) Nevertheless, the emissions gap remains enormous — with around 29 gigatonnes of carbon dioxide equivalent left to address before the world can be on a 1.5 degree-Celsius pathway.

The summit’s participants are responsible for 81% of global emissions, with the 10 largest emitters accounting for two-thirds of the global total. Their key objective was to announce revised 2030 emissions reduction targets ahead of COP26.

Of those attending, the U.S., Canada and Japan announced new 2030 targets. The U.S. pledged to reduce emissions by 50-52% below 2005 levels by 2030 and is responsible for almost 80% of the combined 2030 savings pledged at the summit.

1. Announced plans to strengthen NDC at Leaders Summit on Climate. 2. Strengthened or announced plans to strengthen NDC before the Summit. 3. For the calculation of US emission savings, we assumed for the baseline, the emissions reduction trend from 2025 to 2030 would have been a continuation of the 2005-2025 trend. 4. For countries which proposed a new emissions reduction target range, the midpoint was used.

 

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