Dubai – MENA Herald: Moody’s Investors Service says that the credit implications for sovereigns in the Middle East and North Africa of a potential shift in the United States of America (Aaa stable) policies after the November election would materialize through remittances and trade, but would be limited.

“A period of less proactive foreign engagement by the US over time, whichever candidate wins the presidential election, suggests some limited credit implications for Middle East and North Africa sovereigns,” says Mathias Angonin, an Analyst at Moody’s.

“Outcomes could range from lower access to the US for MENA countries’ non-oil exports, to curbs on aid to and immigration from Levant countries.”

US policy changes as regards trade and investment are unlikely to affect MENA exporters directly given that the US accounts for only 7% of the region’s total exports. That said, oil exporters could be indirectly affected by changes in US energy policy.

US FDI flows to the MENA region are small and concentrated in the energy sector. The largest exposures are in Egypt (B3 stable), the United Arab Emirates (UAE, Aa2 negative), Bahrain (Ba2 negative) and Qatar (Aa2 negative), where US FDI amounted to 0.5%-0.8% of GDP in recent years.

Lastly, a potential tightening in US immigration policies could erode the flow of remittances over time. With remittances from the US amounting to 2.2% and 1.0% of GDP, respectively, Lebanon (B2 negative) and Jordan (B1 stable) would be most affected over the long term by a change in immigration policies, but to an extent far less than countries in other
regions such as Latin America.