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Jihad Azour: Middle East, Central Asia Face Perfect Storm Amid COVID-19

www.imf.org/external/index.htm
4 May 2020

No region has been spared the economic devastation of the coronavirus pandemic. And with the high level of oil-dependency and informality of many countries in the Middle East and Central Asia, Jihad Azour says the economic impact of COVID-19 has been dramatic. Azour heads the IMF's Middle East and Central Asia Department, which has just published the region's economic outlook that shows formidable challenges in the face of the pandemic. 

 

You can read Azour's's blog and others about the global impact of the pandemic at Blogs.imf.org

Jihad Azour is Director of the IMF's Middle East and Central Asia Department. 

Transcript of IMF podcast 

Jihad Azour: Middle East, Central Asia Face Perfect Storm Amid COVID-19

Jihad Azour:

For the region. This is a dual reinforcing shock. It's a perfect storm.

Bruce Edwards:

In this program, the weight of COVID-19 on the economies of the Middle East and Central Asia, especially on the regions fragile and conflict-torn states.

Jihad Azour:

I think it's very important to recognize that this crisis will hit more low income countries, developing countries than the rest of the world.

Jihad Azour:

I'm Jihad Azour, Director for Middle East and Central Asia Department at the International Monetary Fund.

Bruce Edwards:

And welcome to this podcast produced by the IMF. I'm Bruce Edwards. No region has been spared the economic devastation of the coronavirus pandemic and with the high level of oil dependency and informality of many countries in the Middle East and Central Asia, Jihad Azour says the economic impact of COVID-19 has been dramatic. Azour heads the IMF's Middle East and Central Asia department, which has just published the region's economic outlook that shows formidable challenges in the face of the pandemic.

Bruce Edwards:

So what is it about the nature of this crisis that makes it harder for countries to deal with?

Jihad Azour:

This crisis is like no other one before. It's a double shock that is reinforcing itself. Where the spreading of the coronavirus and its impact on the economy, as well as also the oil shock, with the drop in demand and then the sudden decline in oil prices. All countries in the region were affected by this crisis and most of them have been trying to cope with the COVID-19 shock by introducing a certain number of measures to protect life and livelihoods and also to protect certain sectors in the economy. However, if we compare to the last hundred years, this is one of the most challenging moments in economic history for both Central Asia Caucuses as well as also Middle East and North African countries.

Bruce Edwards:

And so, what has been the impact on the economies of these necessary containment measures?

Jihad Azour:

Well the containment measures added to the previous shocks, has led gradually to shut down the economy. And this had a big impact on sectors that are job-rich like tourism, trade, as well as also other important sectors on the service side, which has complicated the management of the crisis, especially for countries where the level of informality is high.

Bruce Edwards:

And so the oil sector is a lifeline for many countries in the region. Will these countries be able to cope with this dramatic drop in oil prices that we're seeing?

Jihad Azour:

Well, indeed the oil sector is important for the old producing countries, but not only for them, also for the oil-importing ones. The oil-exporting ones will face the impact of the shock on their revenues as well as also on their fiscal situation. Countries who have already buffers, they can use them to mitigate some of the repercussions of the shock. Others have less buffers and therefore for them the economic management is going to be more complicated, but in addition to the oil-exporting, the oil-importing countries given the level of remittances, capital flows and investment coming from the oil producers, they will be also indirectly facing the impact of the drop in oil price.  Please click here to continue reading the transcript.