Competing in the Face of Climate Risks: Evidence from Firms and Policy Priorities in MENAAP

Countries in the Middle East, North Africa, Afghanistan, and Pakistan (MENAAP) region are among the most water-scarce in the world and increasingly vulnerable to heat extremes, droughts, floods, and sea-level rise. Rising temperatures are already reducing labor productivity, straining health systems, intensifying desertification, and contributing to water scarcity, crop losses, and higher energy demand for cooling, while deepening fragility, poverty, and displacement risks. These circumstances create an urgent need to respond. This report focuses on two concrete and immediate examples of how heat- and trade-related policies in destination markets affect firms and the broader economy of the MENAAP region.