WASHINGTON — The war in Sudan is likely to cause heavy economic damage in neighboring countries, the IMF’s deputy director for Africa, Catherine Pattillo, told AFP.

“What is going on there for the people in Sudan is just so heart wrenching and devastating. For all of the neighboring countries, too,” she said in an interview in Washington ahead of the publication Friday of the International Monetary Fund’s regional outlook for sub-Saharan Africa.

“A number of these countries that are neighbors are also fragile countries with their own challenges,” she said. “And then to be confronted with the refugees, the security issues, the trade issues, is very challenging for their growth.”

The IMF’s report predicted that the Central African Republic, Chad, Eritrea, Ethiopia and South Sudan could be particularly hard hit by the ongoing conflict in Sudan.

For South Sudan, the situation has become particularly worrying following the loss in February of one of its main sources of income after an oil export pipeline was damaged in Sudan.

The pipeline is crucial for transporting South Sudanese crude oil abroad, which is especially important given that oil accounts for around 90% of the landlocked country’s exports.

The war in Sudan has been raging since April 2023 between the army, led by General Abdel Fattah al-Burhan, and the paramilitary Rapid Support Forces, or RSF, of his former deputy, General Mohamed Hamdan Dagalo, who is also known as Hemedti.

The conflict has claimed tens of thousands of lives, according to the United Nations.

More than 10.7 million people have been displaced across the country, and a further 2.3 million have fled to neighboring countries.

The conflict has also exacerbated food insecurity; a famine was declared in July in the Zamzam camp for displaced people near the town of el-Facher, in Darfur.

“You could think of Sudan [and] also some of the security issues in the Sahelian countries, also affecting growth,” Pattillo said. “Those are the internal conflicts.”

At the same time, other “external conflicts” such as the wars in the Middle East and Ukraine are also affecting the cost of food, fertilizer and energy, she said.

The IMF noted that rising protectionism was also having a negative impact on growth in Africa at a time when trade tensions are translating into tariff hikes between the world’s three most powerful trading blocs: the United States, Europe and China.

The economic slowdown in developed countries and China still represents a major challenge for African countries, the IMF noted, predicting growth in sub-Saharan Africa of 4.2% next year.

This is slightly better than the 3.6% growth expected this year.
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У поясненні регулятора сказано, що причиною цього рішення стало зростання інфляції суттєво вище за прогнозоване
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Striking workers’ rejection of planemaker Boeing’s BA.N latest contract offer has created a fresh threat to operations at aerospace suppliers such as family-run Independent Forge.  

If the strike by more than 33,000 U.S. Boeing workers persists another month, the Orange County, California supplier might need to cut its operations from five to three days a week to save money and retain workers, president Andrew Flores said.  

While Independent laid off a few employees already, letting more go is not an appealing option, he said. The 22 workers who remain are critical for the company, especially when the strike eventually ends and demand for its aluminum aircraft parts rebounds.  

“They are the backbone of our shop,” Flores said this week. “Their knowledge, I can’t replace that.”  

Wednesday’s vote by 64% of Boeing’s West Coast factory workers against the company’s latest contract offer, further idling assembly for nearly all of the planemaker’s commercial jets, has created a fresh test for suppliers such as Independent, which opened in 1975.  

Boeing’s vast global network of suppliers that produce parts from sprawling modern factories or tiny garage workshops, was already stressed by the company’s quality-and-safety crisis, which began in January after a mid-air panel blow-out on a new 737 MAX.   

Demand for parts has dropped, hitting suppliers after they spent heavily to meet renewed demand for planes in the post-pandemic era.   

How small suppliers such as Independent navigate the strike, which began on Sept. 13, is expected to affect Boeing’s future ability to bring its plane production back online.   

More job cuts?   

Five Boeing suppliers interviewed by Reuters this week said continuation of the strike would cause them to furlough workers, freeze investment, or consider halting production.  

Boeing declined comment.  

Seattle-area supplier Pathfinder, which runs a project to attract young recruits to aerospace and trains them alongside its skilled workers, will likely need to lay off more employees, CEO Dave Trader said.  

Pathfinder, which let go one-quarter of its 54 workers last month, will also need to send more of its aerospace students back to their high schools, instead of training them in the company’s factories, Trader said.  

Suppliers on a regular call on Thursday with Boeing supply-chain executives said they expect the strike will continue for weeks, one participant told Reuters.  

About 60% of the 2.21 million Americans who work in the aerospace industry have jobs directly linked to the supply chain, according to the U.S. industry group Aerospace Industries Association.  

Those suppliers’ decisions to reduce staffing could create a vicious cycle, as they will put added strain on Boeing’s efforts to restore and eventually increase 737 MAX output above a regulator-imposed cap of 38 after its factories re-open, analysts say.  

“Once we get back, we have the task of restarting the factories and the supply chain, and it’s much harder to turn this on than it is to turn it off,” CEO Kelly Ortberg told an analyst call on Wednesday.  

“The longer it goes on, the more it could trickle back into the supply chain and cause delays there,” Southwest Airlines LUV.N Chief Operating Officer Andrew Watterson said of the strike on Thursday.   

Shares of Boeing suppliers fell on Thursday. Howmet HWM.N lost 2%. Honeywell HON.O and Spirit AeroSystems SPR.N fell 5% and 3%, respectively, following weak results.  

Spirit Aero, Boeing’s key supplier, which has already announced the furlough of 700 workers on the 767 and 777 widebody programs for 21 days, has warned it would implement layoffs should the strike continue past November.  

“It’s starting up the supply chain that is likely to be the biggest worry, especially if they have taken action to cut workers due to a lack of Boeing orders,” Vertical Research Partners analyst Rob Stallard said by email.  

A strained supply chain, Spirit Aero’s challenges and increased regulatory oversight from the Federal Aviation Administration over MAX production, means it could take up to a year from the strike’s end to get 737 output back to the 38-per-month rate, Stallard said. 
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Iranian photographer Tannaz was on her way to Tehran’s airport when European sanctions on flag carrier Iran Air forced her to return home, unable to make it to work in Paris.

It was within hours of the European Union announcing measures last week against prominent Iranian officials and entities, including airlines, accused of involvement in the transfer of missiles and drones for Russia to use in its war against Ukraine.

Tehran has consistently said such accusations were baseless, but with Western governments unconvinced, the latest sanctions went ahead, dealing a blow to Iran’s already embattled airline industry.

Unable to make it to her photoshoot in Paris as Iran Air had grounded all Europe-bound flights over the sanctions, Tannaz was left grappling with the effect on her business, uncertain how she may keep working abroad under the new restrictions.

“Considering the current situation and higher flight price options, I think I will lose many customers,” said the 37-year-old who gave her first name only, fearing repercussions.

With no other Iranian airline serving European destinations, any alternative to the canceled Iran Air route would likely cost her much more and include a layover, increasing travel time.

Many Western and other international airlines had already suspended their Iran services, citing heightened tensions and the risk of regional conflict since the Gaza war broke out more than a year ago.

 Host of challenges

Despite having largely avoided being drawn into the conflict, Iran backs Palestinian group Hamas, designated a terrorist organization by the United States, United Kingdom, European Union and others, and whose October 7, 2023 attack on Israel sparked the war, and has launched two direct attacks on Israel.

The latest missile attack earlier this month, in response to the killing of Tehran-aligned militant leaders and a Revolutionary Guards general, prompted vows of retaliation from Israel, again heightening fears of a broader conflagration that could disrupt air traffic.

Iran Air, far cheaper than its foreign competition, was “the only airline that flew to Europe in our country”, said Maghsoud Asadi Samani of the national airline association.

“With the new European Union sanctions against Iran Air, no Iranian aircraft will fly to Europe,” news agency ILNA quoted Samani as saying.

Earlier Western sanctions on Iran, including those reimposed after the United States withdrew in 2018 from a landmark nuclear deal, have taken a toll, too.

They contributed to soaring inflation, slashing Iranians’ purchasing power, but also heavily restricted the acquisition of aircraft and spare parts, and limited access to maintenance services.

“A significant number of planes in Iran have accordingly been grounded” for years, said economist Danial Rahmat.

Aging aircraft fleets have worsened poor safety standards, part of a host of challenges Iran’s aviation sector has long grappled with.

Economist Said Leylaz said that while sanctions have had a serious impact, airlines’ woes were rooted in mismanagement and corruption.

Going ‘where we’re not sanctioned’

But Iranians have only a few alternatives.

Rahmat said that now, they may have to primarily rely on flights via neighboring countries to reach Europe and other parts of the world.

Not only would it “impose higher costs and longer travel hours on Iranian passengers, but it would also provide an opportunity for airlines from these countries to acquire a larger market share” at the expense of Iranian firms, said Rahmat.

Iran Air still flies to several regional destinations as well as some in Asia. Another company, Mahan Air, goes to Moscow and Beijing several times a week.

Shortly after the latest EU sanctions were announced on October 14, Iran Air set up a daily route to Istanbul “to facilitate travel to Europe and reduce travelers’ worries,” news agency ISNA reported.

Leylaz said that the sanctions would likely boost Iran’s ties with non-Western allies like China.

The demand for flights to east Asia “and outside the European Union… to places where we are not sanctioned is very high,” he added.

President Masoud Pezeshkian has made easing Iran’s economic isolation a key objective, but indirect talks with the United States that could have helped have been suspended over the regional conflict, according to Foreign Minister Abbas Araghchi.

For Tannaz, the photographer, the ability to go abroad is not just a work issue but also a reflection of the state of the country.

“I just wish we could live a normal life,” she said.
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