UN agency says Arab markets’ value falls by a quarter this year
Yemen– A huge step has been taken by the United Nations Human Rights Council as they end the mandate of the Group of Eminent International and Regional Experts on Yemen (GEE), which was set up to investigate alleged abuses in the ongoing civil war situation in the country.
The organisation was responsible for a lot of false reporting of issues and it did not have any significance in the eyes of most of the Arab nations. The decision has finally been taken after much request to the regional powers and it is even a landmark for the council also who voted for the cancelation of any mandate for the first time in 15 years.
Majority of the member countries voted against the draft to extend GEE’s mandate, which was heavily backed by many European countries and Canada as well. This was an extremely crucial decision for the Arab coalition which is trying to establish legitimacy in Yemen given the scarce situation.
The situation that Yemen is witnessing is one of the worst humanitarian crises ever witnessed by mankind. But keeping the humanitarian ground at bay, many organisations have jumped the guns and started looking for opportunities in this situation. Arab coalition has termed GEE as one such entity.
The coalition led by Saudi Arabia has time and again accused the GEE group for falsely targeting the Arab countries and damaging their reputation. The violence did take place but it was not because of the coalition that was being targeted by the GEE.
These violations took place but it was backed by Iran backed Houthis who took over the country years ago and since then Yemen’s future has been put on hold. Al Houthi militias have continued their war against fragile administration leading the country to a fatal end. Despite various efforts, the militia group has continued to fight against the internationallying the performance of financial markets below the 2008-2009 collapse” the report said while pointing out the largest banks in the Arab states, even the oil-rich ones in the Gulf, have witnessed a 25-per cent crash in the share price value in the first quarter.
One way forward for economic revival was support from Arab sovereign wealth funds which instead of continuing to invest in foreign lands could direct some of this capital inwards. “Shifting part of these funds’ global investments towards investing in Arab economies may ease the pandemic’s repercussions and reduce rampant unemployment in the Arab region,” the report said.
This has the two-fold benefit of reducing the exposure of these funds to the volatility of international markets while supporting development within their own borders.
The Union of Arab Banks and the ESCWA said that in the six Gulf Cooperation Council states, credit to the private sector is to reduce by $14.5 billion and by $11.3 billion in non-oil, middle-income countries, bringing the total decline up to $26 billion in 2020. The ESCWA’s advice to banks was to continue providing liquidity to the financial system at any cost during the relief and recovery period. Loan structuring was essential to head off default risks for small and medium-sized businesses.
“The drop in oil prices and the COVID-19 pandemic resulted in a 23-per cent coverage loss for major Arab stock markets by the end of the first quarter of 2020,” the ESCWA said, adding that these external conditions “have lowered investors’ appetite for risk and decreased trading in stock markets, investment, tourism and remittances inflows, rendering future growth prospects bleak”.
The twin crises have “shattered the stock market in Arab countries, putting the performance of financial markets below the 2008-2009 collapse” the report said while pointing out the largest banks in the Arab states, even the oil-rich ones in the Gulf, have witnessed a 25-per cent crash in the share price value in the first quarter.
One way forward for economic revival was support from Arab sovereign wealth funds which instead of continuing to invest in foreign lands could direct some of this capital inwards. “Shifting part of these funds’ global investments towards investing in Arab economies may ease the pandemic’s repercussions and reduce rampant unemployment in the Arab region,” the report said.
This has the two-fold benefit of reducing the exposure of these funds to the volatility of international markets while supporting development within their own borders.
The Union of Arab Banks and the ESCWA said that in the six Gulf Cooperation Council states, credit to the private sector is to reduce by $14.5 billion and by $11.3 billion in non-oil, middle-income countries, bringing the total decline up to $26 billion in 2020. The ESCWA’s advice to banks was to continue providing liquidity to the financial system at any cost during the relief and recovery period. Loan structuring was essential to head off default risks for small and medium-sized businesses.
The Economic and Social Commission for Western Asia attributes this to the twin effects of the coronavirus pandemic and collapse of oil prices.