War could threaten already-fragile economies in Egypt, Lebanon, Jordan

Each of the three countries is up against differing economic pressures that led the International Monetary Fund to warn in a September report that they could lose their "sociopolitical stability." That warning came shortly before Hamas attacked Israel on Oct. 7, triggering a war that could easily cause economic chaos that President Joe Biden and the European Union would likely need to address.

The possible fallout is now starting to be recognised by world leaders and policy analysts. For a Biden administration committed to stopping the Israel-Hamas war from widening, the conflict could amplify the economic strains and possibly cause governments to collapse. If the chaos went unchecked, it could spread across a region that is vital for global oil supplies — with reverberations around the globe.

“The more unstable things are economically, the easier it is for bad actors in the region to stir the pot," said Christopher Swift, an international lawyer and former Treasury Department official. "The notion that you can divorce politics from economics is a little bit myopic, and naive. Politics, economics, and security go together very closely.”

World Bank head Ajay Banga warned at a conference in Saudi Arabia this week that the war puts economic development at a “dangerous juncture.”

The financial situation is serious enough that Charles Michel, president of the European Council, met with the IMF last Thursday and told officials there that they needed to do more to support the Egyptian government, which he said is under pressure due to the possibility of migrants arriving from Hamas-controlled Gaza as well as people fleeing a civil war in Sudan.

“Let's support Egypt," Michel told reporters afterward. “Egypt needs our support and we need to support Egypt.”