Resilience in the Middle East for 2025

The year 2025 will be remembered as one of reckonings: on technology, the climate, trade, the economy and conflict. The Middle East and North Africa region is no different — in fact, the pressure on regional actors to deal with these issues is more heightened than perhaps any other place on Earth.

Climate, trade, conflict, technology and rapidly changing economies are creating risks for the half a billion people who call MENA home. Conflict is claiming lives in hot spots across MENA, disrupting global trade and forcing people from their homes. Water is getting harder to access. Some economies are struggling to provide opportunities for their citizens.

But in this region too, opportunity abounds. Take Syria, a country that has suffered more than a decade of brutal civil war and is now faced with a historic opportunity to craft a brighter, more prosperous and open future.

Then there is the Gulf, where rapidly changing economies like Saudi Arabia and the UAE present bright spots that are fueling growth in a sluggish global economy and rapidly building out diverse economies that no longer rely on the fossil fuels they were built on.

The Middle East has always been a region of risk and opportunity; the key in MENA is mitigating risk and seizing opportunity. To that end, the Global Risks Report, based on the annual Global Risks Perception Survey, has compiled the top risks facing the region for this year.

Concern over inflation was the No. 1 risk in MENA, higher than in any other region.

Across parts of the region, inflation is a persistent problem — and this is not expected to change in 2025. The region’s average inflation rate for 2025 is 8.4 percent, according to the International Monetary Fund. This is almost double the global average of 4.3 percent.

For citizens and governments of the MENA region, inflation is a very real and very persistent risk. Linked to that is the region’s second risk: economic downturn.

The Middle East is home to some of the world’s most successful modern economies — but many, too, are fragile, especially given geopolitical and climate challenges.

Economic downturn represents a very real risk to the (thus far successful) transitions away from the fossil fuel economy for some — and the remedy to this is deepening economic cooperation and trade.

The good news is that, according to the Forum’s Global Cooperation Barometer report, digitization of the global economy continues to drive increased cooperation. If MENA economies can keep the momentum on digitalization and cooperation — and so far, the evidence is that they can — a regional economic downturn can be avoided.

Perhaps surprisingly, armed conflict registered third in the perceived risks from MENA regional respondents to the survey. The very real risk of armed conflict in the MENA region is plain to see. War continues to create significant humanitarian crises in Gaza, Sudan and Yemen, while a tenuous ceasefire holds in Lebanon.

In Syria, too, we have witnessed how quickly conflicts that appeared frozen can thaw. The collapse of the Assad regime was a lesson in the fragility of the status quo in parts of the region — though it has also brought with it a spark of hope.

Scenes of Syrians returning to their homes, freed from the former regime, inspired those across the region and outside it to imagine a peaceful future for Syria and elsewhere.

Economic downturn represents a very real risk to the (thus far successful) transitions away from the fossil fuel economy and the remedy to this is deepening economic cooperation and trade.

Maroun Kairouz

The world will watch closely and with much anticipation as Syria’s new foreign minister addresses the World Economic Forum’s Annual Meeting in Davos this year. As his first public engagement outside of the region, that speech is expected to chart a course for Syrian diplomacy in the years to come.

Despite the threat of armed conflict, there are other bright spots, too. The Gulf, for example, has seen a resurgence of diplomatic overtures between some Gulf Cooperation Council economies on one side and Iran on the other, leading to a once-unimaginable state visit of the Iranian foreign secretary to Riyadh in October 2024.

The climate crisis is perhaps most acute in the Middle East, and water is at the heart of it. That is why water supply shortages registered as a top risk for MENA in 2025. By 2050, every single country in MENA will live under extremely high water stress — but, even today, water stress is a pressing issue in the region.

Agriculture, groundwater usage, droughts and more are putting pressure on the region’s water system. Economies with abundant energy like Saudi Arabia lean heavily on desalination to access drinking water, but this is a band-aid for the problem, not a lasting solution.

Dealing with the region’s water stress requires cooperation. For example, through the forum’s Leaders for a Sustainable MENA initiative, government and business leaders work together to scale low-carbon technologies and infrastructures to shape a climate-resilient future for the region.

Companies and economies are taking this seriously. Today, recycled water covers 40 percent of Bahrain’s agricultural needs, while Saudi utility provider ACWA Power is using renewable energy and artificial intelligence to bring down the cost of desalinated water from over $2 per cubic meter just a few years ago to below $0.50 today.

Unemployment ranked as the fifth-highest risk in the MENA region. When it comes to the region’s vast young population, this problem is particularly acute.

Youth unemployment in the MENA region hit 24.4 percent in 2023, double the global average. This prevents young people across the region from fulfilling their potential and can even be politically destabilizing.

Gender, too, poses a challenge. The MENA region has the largest overall gender gap in the world, with women’s economic participation and opportunity in the economy — key metrics of economic success — ranking at 42.7 percent.

If economies across the region are going to improve employment opportunities for their citizens, particularly the young, there is no doubt that they must account for issues of gender participation in the workforce.

Looking ahead, Middle Eastern leaders from the public and private sectors must embrace inclusive governance and remain focused on fulfilling the aspirations and potential of the people who rely on them. International actors can support these efforts through meaningful, consistent engagement rather than the episodic attention dictated by crises.

Most critically, the people of the Middle East — whose resilience has been tested beyond measure — must remain at the heart of any vision for a better future.

As history unfolds, the Middle East’s struggles, opportunities and triumphs serve as a reminder of the profound stakes involved, not just for the region, but for a world that is increasingly interconnected. The lessons of 2024 should inspire a more collaborative and sustainable path forward.

• Maroun Kairouz is head of the Middle and North Africa for the World Economic Forum.