The Impact of Israel's War on Gaza on the Region's Economy
The Turkish Minister of Commerce recently spoke to Al Jazeera Net about the potential effects of Israel's war on Gaza on the region's economy. He believes that the ongoing aggression against Gaza will bring significant changes to the economy, considering the human tragedy unfolding before the world's eyes.
Economic Dimensions of the Conflict
The Minister explains that the events in the region have economic implications. Just like how the global and regional economy has been influenced by events like the Covid-19 pandemic, trade wars, and conflicts between Russia and Ukraine, the Israeli-Palestinian conflict is now impacting the economy as well.
Impact on Oil Prices
International organizations predict that if the conflict remains limited to Israel and Palestine, its impact on oil prices will be minimal. However, if it escalates into a regional war involving oil-producing countries like Iran, the price of oil could rise above the current level of $76.5 per barrel. This would have negative effects on the global and regional economy, which is already experiencing inflation and fragility.
Repercussions on Transportation Corridors
The war on Gaza will also affect transportation corridors. For example, the G20 summit held in India recently resulted in the announcement of a new economic corridor and the establishment of a railway and port network connecting India, the Middle East, Africa, and Europe. Although Israel did not sign the memorandum of understanding for this project, the Israeli port of Haifa is an important crossing point in the corridor. The safety of this economic corridor is now being debated due to the ongoing conflict between Israel and Palestine. The development road starting from the port of Basra in Iraq, extending north to Ovaköy on the Turkish border, and then reaching Europe via Turkey could be a viable alternative.
Opinions of the International Monetary Fund
The International Monetary Fund shares the Minister's viewpoint, stating that the Israeli-Palestinian conflict will have a significant negative impact on the regional and global economy. This comes at a time when growth is slowing, interest rates are rising, and the cost of servicing debts is increasing due to the Covid-19 pandemic and the war.
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Agencies
