Climate-related disasters pose ‘major’ growth threat in Middle East, Central Asia – IMF

WASHINGTON, USA – The frequency and severity of climate-related disasters are rising faster in the Middle East and Central Asia than anywhere in the world, posing a “major threat” to growth and prosperity, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said.

A new IMF paper showed that climate disasters in the region injured and displaced 7 million people in an average year, causing more than 2,600 deaths and $2 billion in physical damage.

“Droughts in North Africa, Somalia, and Iran. Epidemics and locust infestations in the Horn of Africa. Severe floods in the Caucasus and Central Asia. The list of disasters is quickly getting longer,” Georgieva said in remarks prepared for the World Government Summit in Dubai.

Analysis of data spanning the past century showed that temperatures in the region had risen by 1.5°C, twice the global increase of 0.7°C, and already sparse precipitation had become more erratic than in any other region, the IMF report said.

Georgieva said extreme weather events typically cut annual economic growth by 1 to 2 percentage points per capita.

In the Caucasus and Central Asia subregion, she said, such events had caused a permanent loss in the gross domestic product level of 5.5 percentage points.

She called on all countries to adapt their economies to climate challenges, including through adoption of a steadily rising carbon price, increased green investments, and work to ensure a just transition across and within countries.

She lauded the United Arab Emirates, a major oil producer, for its pledge to invest more than $160 billion in renewable energy to achieve net zero carbon emissions by 2050. Egypt, meanwhile, was investing in modern irrigation techniques, education, and health care.

Georgieva said it was also critical to ensure climate adaptation policies were included in national economic strategies, as investments in resilient infrastructure and better flood protection could avert economic losses.

In Morocco, for instance, simulations showed that beefing up water infrastructure improved resilience to droughts and cut gross domestic product (GDP) losses by almost 60%.

She said public infrastructure investment needs could amount to 3.3% of GDP per year for individual countries in the region over the next decade, more than twice the average for emerging market economies.

Given limited resources in the aftermath of the COVID-19 pandemic, countries would need a mix of domestic policy reforms, such as replacing fuel subsidies, and international support, including from the IMF, Georgieva said. – Rappler.com