Outlet: Arab News

Language: English

Abstract: In the face of convergent crises, including record food inflation and pre-existing socioeconomic challenges, Arab countries find themselves grappling with shrinking fiscal space and incomplete interventions. Rising debt levels, escalated by the pandemic and global supply chain disruptions, contribute to structural deficiencies. While external debt has been a temporary solution, reliance on it is unsustainable. Reform efforts are hindered by corruption and political complexities, making austerity measures politically costly. As countries reorient towards self-reliance, global cooperation wanes, leaving little fiscal room for essential interventions. Rising borrowing costs, driven by US interest rate hikes, further strain budgets, hindering climate resilience and social safety nets. Lebanon's debt crisis serves as a cautionary tale, highlighting the risks of high debt-to-GDP ratios. Without effective management, countries risk economic collapse and vulnerability to external pressures. However, pleas for international assistance may go unheard amidst competing global priorities, leaving Arab governments with limited options as crises converge.

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