Dr. Hamad Kasasbeh

The current escalation among international and regional powers is no longer a passing political development. It has become a direct source of pressure on the stability of the Middle East, with clear effects on economic performance and development paths. With each new wave of tension, it becomes more evident that the region is bearing the cost of conflicts managed outside its own decision-making framework, limiting its ability to shape its economic future.

These costs are not limited to traditional indicators. The nature of risk itself has changed. Critical supply chains, energy markets, and strategic corridors have become highly sensitive to escalation. This increases uncertainty, raises operating costs, and creates a more volatile environment that weakens long-term planning and reduces the efficiency of economic decision-making.

Despite regional and international efforts to contain the escalation, the situation continues to grow more complex. Interests overlap, and no clear path toward de-escalation has emerged. This reflects the limits of partial responses that delay the impact of the crisis rather than managing it effectively, allowing pressure on regional economies to accumulate over time.

In this context, the situation cannot be treated as an external conflict. It is unfolding within the Middle East itself, with direct consequences for local economies. As the region becomes the arena of tension, the business environment becomes more risk-sensitive. Rising uncertainty pushes the private sector toward caution, slows expansion, and shifts priorities from growth opportunities to risk management.

Economically, this reality is reflected in higher financing costs, declining investor confidence, slower trade activity, and postponed long-term investments. The direct economic impact is already visible, as growth forecasts for the region have been revised down to 1.8% in 2026, compared to 4.0% in 2025, according to international estimates. This clearly shows how political tensions are translating into economic pressure.

At the same time, the absence of a coordinated regional position reveals a deeper structural gap. There is a lack of effective economic coordination mechanisms, even as conflicts unfold within the region. This weakens the ability of economies to manage risk collectively, increases exposure to shocks, and limits their capacity to adapt.

De-escalation is essential, but it is not sufficient on its own. Without a structured approach to managing its economic cost, the region will continue to absorb the impact. There is a clear need for coordinated action to protect economic stability. In this context, an emergency Islamic summit could serve as a practical platform to align economic responses, support de-escalation, and reduce the growing cost of tensions—without becoming part of the conflict itself. The core issue is not only the conflict, but the cost of leaving its consequences unmanaged.