A.P. Moller-Maersk, the second-largest global ocean carrier, is advising customers to prepare for a Red Sea crisis that could stretch well into the second half of this year.

“Unfortunately, we don’t see any change in the Red Sea happening anytime soon,” Charles van der Steene, regional president for Maersk North America, tells CNBC. “We’re advising them the longer transit routes could last through Q2 and potentially Q3. Customers will need to make sure they have the longer overall transit time built into their supply chain.”

On January 5, Maersk announced that it was suspending voyages through the Red Sea and Gulf of Aden for the “foreseeable future” after the attack on the Maersk Hangzhou. After attacks on two U.S.-flagged Maersk vessels on January 24, the Maersk Detroit and Maersk Chesapeake, Maersk Line, Limited — a U.S. subsidiary of Maersk, which operates U.S.-flagged vessels independently — announced it would no longer traverse the Red Sea.

The global shipping and logistics company’s cautious view of the Red Sea safety conditions comes despite a U.S.-led multinational military operation in the region, Operation Prosperity Guardian. According to U.S. defense data, Houthi rebels have either attacked or threatened commercial vessels at least 46 times since November. Despite multiple strikes by the U.S. and allies against rebel targets, Houthis have warned that their attacks “will continue until the aggression against Gaza stops.”

The longer transits around the Cape of Good Hope are delaying the arrival of the empty vessels going back to Asia to pick up more U.S. imports. The delays are impacting the consistency of trade which can impact the supply chain. Van der Steene said he is urging U.S. companies to remain vigilant in their assessment of the Red Sea situation and be nimble in their supply chain logistics strategies.

Maersk was the largest ocean carrier for U.S. exports in 2023, based on customs data. Maersk Line, Limited’s U.S.-flagged vessels are enrolled in the Maritime Security Program and VISA (Voluntary Intermodal Sealift) with the U.S. government. It has the largest number of U.S. flagged vessels serving the country, in addition to its foreign-flagged fleet which transports ocean freight for U.S. companies.

“Our advice to our customers is specifically about building upon the uncertainty by being agile,” said van der Steene. “Customers need to have the ability to enter the North American market from different endpoints. Be it the West Coast, Gulf, or the East Coast. Our preparation of services very much depends on one-to-one work with our customers to identify what is their best alternative.”

Data from maritime advisory firm Sea-Intelligence shows that the average delay for late vessel arrivals has “deteriorated,” and as a result, vessel capacity has diminished, with impacts for U.S. East Coast-bound ocean freight from Asia going around the Horn of Cape Hope.

To keep the flow of trade moving, van der Steene told CNBC, Maersk has added about 6 percent of extra vessel capacity to its schedule, adding to operational costs. During its recent earnings call, Maersk executives flagged “high uncertainty” in its 2024 earnings outlook, citing the Red Sea disruptions and an oversupply of shipping vessels.

“U.S. businesses are concerned about delivery timing,” said van der Steene. “Merchant decisions are based on how reliable and how consistent their supply chain will be for the next three, six, 12, 24 months.”

In addition to delivery, van der Steen said shippers need to quantify the cost for their supply chain to the actual costs for their supply chain.

“Many of our customers factor a cost per unit cost for their supply chain into their budgeting, which basically is what they need to make their results work,” he said. “If that fundamentally shifts and changes, it could have a pretty significant effect on their overall costs.”

Ocean freight prices have jumped as a result of the longer voyage, costs not planned in shippers’ budgets, but recent data has suggested that inflation related to the Red Sea may be peaking already. Maersk officials said during its recent earnings call that the situation will not compare to the Covid supply chain inflation period due to the current overcapacity of vessels resulting from a post-Covid freight industry recession.

U.S. companies, van der Steene says, are faced with three supply chain headwinds: Red Sea diversions, East Coast port labor negotiations, and the Panama Canal drought. Shippers are looking for alternatives to cut both the time and rising cost of transit.

Ports in Mexico, the Pacific Northwest, and Los Angeles and Long Beach will be ports receiving some East Coast bound freight, van der Steene said. He described Mexico as a “significant” opportunity due to the expansion of nearshoring of products once manufactured in China. Recent trade data from the U.S. government showed that for the first time in decades, Mexico surpassed China as the nation’s largest trade partner.

For East Coast trade originating from the Oceania (Australia and New Zealand) region and going through the Panama Canal, Maersk recently announced it was expediting freight flow by moving those containers via rail instead of waiting to traverse the canal, which has drought restrictions reducing the number of vessels allowed for daily transit.

“The concern of Panama hasn’t gone away,” said van der Steene. “It has stabilized in the sense that people know what to expect, but we don’t know if this might potentially be recurring on an ongoing basis in the future. As a result, we’re actively looking to potentially have a better West Coast approach that would somehow mitigate the risk of the throughput being reduced on an ongoing basis.”

In January, Turkish inflation logged its biggest monthly jump since August with a 6.7% rise from December, while year-on-year inflation hit nearly 65%, according to the Turkish central bank’s figures released Monday.

The consumer price index for the country of 85 million people increased by 64.86% annually, up slightly from 64.77% in December. Sectors with the largest monthly price rises were health at 17.7%, hotels, cafes and restaurants at 12%, and miscellaneous goods and services at just more than 10%. Clothing and footwear was the only sector showing a monthly price decrease, with -1.61%.

Food, beverages and tobacco, as well as transportation, all increased between roughly 5% and 7% month on month, while housing was up 7.4% since December.

The monthly rises, economists say, stem from a significant increase to the minimum wage that Turkey’s government mandated for 2024. The minimum wage for the year has risen to 17,002 Turkish lira ($556.50) per month, a 100% hike from January 2023.

Turkey’s central bank has been on a prolonged mission to bring down inflation, implementing eight consecutive interest rate hikes since May 2023, for a cumulative 3,650 basis points. The bank’s latest increase, on Jan. 25, raised the key interest rate by 250 basis points to 45%.

The more conventional approach follows several years of unorthodox policy during which Ankara refused to tighten rates despite ballooning inflation. The lira is down 38% against the dollar year to date and has lost more than 80% of its value against the greenback over the last five years. 

The latest inflation print comes just days after Turkey’s central bank governor, Hafize Gaye Erkan, announced her resignation, saying Friday that the decision was due to a “reputation assassination” campaign and the need to protect her family.

Erkan became the bank’s central governor by presidential decree in June 2023, and led — along with Turkish Finance Minister Mehmet Simek — the turnaround in Turkey’s monetary policy and subsequent series of interest rate rises.

She was replaced on Saturday by the central bank’s deputy governor, Fatih Karahan, who spent nearly a decade as an economist at the Federal Reserve Bank of New York.

January’s inflation figures “highlight the continued strength of services inflation and may put pressure on new central bank governor Karaham to restart the central bank’s tightening cycle,” Liam Peach, senior emerging markets economist at London-based Capital Economics, wrote in a research note.

“The fact that inflation didn’t rise significantly more than expected in January is positive given the uncertainty about the impact of the minimum wage hike,” Peach wrote. “But the figures present a small setback to the disinflation process and highlight the continued strength of services inflation. For now, the central bank’s end-year inflation forecast of 36% remains intact.”  

DAVOS, Switzerland — Grayscale Investments CEO Michael Sonnenshein told CNBC that most of the approved bitcoin exchange-traded funds won’t survive, while defending the highest fees in the market for the company’s own product.

The Grayscale Bitcoin Trust ETF is the world’s largest, with over $25 billion in assets under management.

When the U.S. Securities and Exchange Commission approved a swathe of spot bitcoin ETFs earlier this month, much focus was on the management fees that firms from BlackRock to Fidelity were charging.

Many of the ETF issuers were charging 0% fees for a limited amount of time before raising them slightly. Most of the approved ETFs have fees of between 0.2% and 0.4%.

But the Grayscale Bitcoin Trust ETF charges a 1.5% fee.

Sonnenshein laid out several reasons why it is charging that fee, including the fact it is the largest bitcoin fund, has a 10-year track record of “operating successfully” and has a diversified investor base.

“Investors are weighing heavily things like liquidity and track record and who the actual issuer is behind the product. Grayscale is a crypto specialist. And it has really paved the way for a lot of these products coming through,” Sonnenshein told CNBC in an interview at the World Economic Forum in Davos on Thursday.

Sonnenshein said the reason other ETFs have lower fees is that the products “don’t have a track record” and the issuers are trying to attract investors with fee incentives.

“I think from our standpoint, it may at times call into question their long-term commitment to the asset class,” Sonnenshein said.

The Grayscale CEO said two to three of the spot Bitcoin ETFs “will maybe obtain some kind of critical mass” of assets under management, but that the others may be pulled from the market.

“I don’t ultimately think that the marketplace will have ultimately these 11 spot products we find ourselves having,” Sonnenshein said.

Saudi Arabia’s Public Investment Fund (PIF) was the top spender among global sovereign wealth funds last year, accounting for about a quarter of the $124 billion splashed by state-owned investors, according to a preliminary report by research consultancy Global SWF.

The Saudi fund boosted its deal activities from a total $20.7 billion in 2022 to $31.6 billion in 2023, the research said, even as most other counterparts tapered down their spending. Overall, global sovereign wealth funds deployed 20% fewer funds compared to 2022, despite most major stock markets seeing a rally last year.

“This may signal an overly cautious approach, as there is no shortage of capital to put to work among these institutions,” the report, which tracks activities across the world’s sovereign funds, noted. 

“The clear winner was Saudi’s PIF, which has become a heavy-hitter both at home and overseas,” the analysts wrote. The PIF, controlled by Saudi Crown Prince Mohammed bin Salman, has total estimated assets of $776 billion. The Saudi fund has pursued frequent deals and joint ventures in its pursuit toward Vision 2030 — a plan originally launched back in 2016 which aims to increase economic diversification away from oil. Notable overseas investments in 2023, alongside golf and soccer, included Nintendo in Japan and Vale Basic Materials in Brazil. 

Asides from PIF, four other funds from the GCC (Gulf Corporation Council) made it into the top 10 — Mubadala, the Qatar Investment Authority, ADQ and the Abu Dhabi Investment Authority.

The PIF even surpassed Singapore’s GIC, which had led spending by wealth funds for the past six years. The Singaporean fund slashed its investment activity by 37%, in terms of volume, despite receiving one of its largest inflows from the central bank.

The report also noted the attention given to emerging markets among several sovereign investors. 

“In 2023 we can observe a renewed interest in emerging markets, including Saudi, Türkiye, and the UAE (with the help of domestic SWFs), and India, Brazil, China, and Indonesia,” it stated. 

Global economies will see more sovereign wealth funds coming online in 2024, such as Hong Kong’s HKIC, Philippines’ Maharlika and Pakistan’s PSWF.

“The formation of Dubai’s new SWF, DIF, will send shock waves and will surely attract personnel from other SWFs,” the research said.

With the eyes of the world on the ongoing wars in Ukraine and Gaza, an unprecedented number of potentially “catastrophic” conflicts are going under the radar, analysts have warned.

The International Rescue Committee earlier this month released its emergency watchlist for 2024, documenting the 20 countries at the greatest risk of security deterioration. These countries account for around 10% of the world’s population but around 70% of its displaced persons, along with approximately 86% of global humanitarian need.

The U.N. estimated in October that more than 114 million people were displaced by war and conflict worldwide. That figure is now likely higher.

IRC President and CEO David Miliband said that for many of the people his organization serves, this is the “worst of times,” as exposure to climate risk, impunity in an ever-growing number of conflict zones and spiraling public debt collide with “diminishing international support.”

“The headlines today are rightly dominated by the crisis in Gaza. There is good reason for that — it is currently the most dangerous place in the world to be a civilian.” Miliband said.

“But the Watchlist is a vital reminder that other parts of the world are on fire as well, for structural reasons relating to conflict, climate and economy. We must be able to address more than one crisis at once.”

Isabelle Arradon, research director at the International Crisis Group, told CNBC earlier this month that conflict fatalities globally are at their highest since 2000.

“All the red flags are there, and on top of that, there is a shortage of means to resolve conflict. There’s a lot of geopolitical competition and less appetite for resolving these deadly conflicts,” she added.

Sudan

No. 1 on the IRC’s watchlist is Sudan, where fighting erupted in April 2023 between the country’s two military factions, and internationally brokered peace talks in Saudi Arabia yielded no solution.

The conflict has now expanded into “large-scale urban warfare” that is garnering “minimal” international attention and poses a serious risk of regional spillover, the IRC said, with 25 million people in urgent humanitarian need and 6 million displaced.

The Rapid Support Forces — led by Gen. Mohammed Hamdan Dagalo (known as Hemedti) and allegedly supported by the UAE and Libyan warlord Khalifa Haftar — has expanded a multipronged offensive from the conflict’s epicenter in the capital of Khartoum, leaving a trail of alleged atrocities in the western region of Darfur.

The RSF reportedly pushed into central Sudan for the first time in recent days, prompting further mass exoduses of people from areas previously held by the Sudanese Armed Forces.

The ICG’s Arradon told CNBC that alongside the ongoing risk of further mass atrocities in Darfur is the possibility of an “all-out ethnic conflict” that draws in more armed groups from the region.

“Peace initiatives are very limited right now. Clearly, at the global level, there is a lot of distraction, and so the situation in Sudan is one where I don’t think there’s enough serious engagement right now at a high level for cease-fire negotiations, and so there needs to be a greater push,” she said.

The flow of refugees into neighboring South Sudan and Ethiopia, themselves blighted by internal conflict, the effects of climate change and extreme economic hardship, amplify the risks of spillover, analysts believe.

Democratic Republic of the Congo, Rwanda

Last week’s chaotic election in the Democratic Republic of the Congo marked just the start of a new electoral cycle that will continue through 2024 against a brittle backdrop.

Voting was marred by long delays at polling stations, with some failing to open all day and voting extended into Thursday in some areas of the massive mineral-rich country with 44 million registered voters.

Several opposition candidates called for the election to be canceled, the latest controversy after a campaign blighted by violence as 18 candidates challenged incumbent President Félix Tshisekedi for the leadership.

Partial preliminary results suggest Tshisekedi is well ahead in the vote, but the government on Tuesday banned protests against the election that were called for by five opposition candidates.

The political turbulence comes amid ongoing armed conflict in eastern DRC and widespread poverty, and precedes further regional elections early next year.

The likely prolonged contestation of the results, borne out of long-held suspicions among Tshisekedi’s fragmented opposition about the independence of the electoral commission, could spark further conflict with implications for the wider region, crisis analysts believe.

“We’re very concerned about the risk of a serious crisis. We saw in 2018 already how the contestation of the vote was a big problem, but now we have on top of that M23 [rebels], backed by Rwanda, that is increasing its fighting and coming very close to [the city of] Goma,” Arradon said.

M23 rebels reappeared in the province of North Kivu in eastern DRC in November 2021, and have been accused by human rights groups of multiple apparent war crimes since late 2022 as they expand their offensive.

Neighboring Rwanda has allegedly deployed troops to eastern Congo to provide direct military support to M23, stoking tensions between Kigali and Kinshasa, and prompting U.N. Secretary-General Antonio Guterres to repeatedly voice concern about the risk of a “direct confrontation.”

The combination of a fractured and distrustful political backdrop, an ongoing armed rebellion and extreme socioeconomic pressures render the region fertile ground for conflict next year.

Arradon described the situation in DRC and other active and potential conflict zones around the world as “catastrophic.”

“DRC, we’re talking about 6 million displaced. If you look at Myanmar, of course you’ve got this huge population in Bangladesh of displaced Rohingyas, and also displaced within Myanmar itself,” she said.

“We’ve never seen so many people on the move globally, largely due to conflict. It’s not just people on the move, it’s the fact that often civilian populations live side by side with armed groups, and that’s the case in Myanmar, that’s the case in the east of DRC, also in Sudan, in the west and Darfur.”

Myanmar

The civil war in Myanmar has been underway since a February 2021 military coup, and subsequent brutal crackdown on anti-coup protests, triggered an escalation of long-running insurgencies from ethnic armed groups throughout the country.

Government forces have been accused of indiscriminate bombing and both the IRC and IGC fear the tactics may be ramped up in 2024 as ethnic armed groups and resistance forces have made significant gains in the north of the country.

The military currently faces challenges from an alliance of three ethnic armed groups in the northern Shan state, along with one of the country’s largest armed groups in the northwestern Sagaing region and smaller resistance forces in Kayah state, Rakhine State and along the Indian border in the west.

“For first time in decades, military will have to fight numerous, determined and well-armed opponents simultaneously in multiple theatres; it may double down on brutal efforts to reverse tide on battlefield, including scorched-earth tactics and indiscriminate bombing in coming weeks,” the IGC’s latest CrisisWatch report assessed.

The Sahel

Countries across the Sahel have experienced a swathe of military coups over the past couple of years, partly in response to heightened instability as governments struggle to tackle Islamist militant insurgencies spreading throughout the region.

The Sahel encompasses north-central Africa’s semiarid belt between the Sahara Desert and savanna regions, and includes Burkina Faso, Cameroon, Chad, Gambia, Guinea, Mali, Mauritania, Niger, Nigeria and Senegal.

Mali, Niger, Burkina Faso, Guinea and Chad have all endured coups and severe instability in the last three years. IGC’s Arradon said security issues had been deepened by the fallout from civil war in Libya to the north, which saw a deluge of weapons move south to supply armed groups in countries with large proportions of their populations in “peripheries that have felt neglected.”

“So this overall security context of populations feeling neglected, plus easy access to weapons, has indeed created a growing security risk in the Sahel region, and the dissatisfaction from these populations has grown,” she added.

… and many more

Alongside these, the IGC also has grave concerns about potential outbreaks of armed conflict in Haiti, Guatemala and Ethiopia, along with the well-documented risk of a Chinese incursion into Taiwan and its global geopolitical implications.

LONDON — European stocks started the final session of 2023 higher, marking a positive end to a solid year.

The regional Stoxx 600 index was up 0.26% in mid-morning trade, with all sectors in the green. Thin trade is expected, while London markets close early.

Spanish pharmaceutical group Grifols was the biggest stock mover, climbing 8.9% after announcing it will sell a 20% stake in Shanghai RAAS, a blood products firm, to China’s Haier for approximately $1.8 billion.

The blue-chip benchmark Stoxx is set to have gained more than 12% in 2023, according to LSEG data, just about reversing its 2022 loss.

Germany’s DAX has risen nearly 20% despite the country’s gloomy economic picture, while France’s CAC 40 and the U.K.’s FTSE 100 have gained 16.3% and 3.64%, respectively.

In the U.S., the S&P 500 index is chasing a new record high to cap off the rally of the last two months.

Latest data releases, including Thursday’s on jobless claims, continue to suggest U.S. economic growth is slowing without grinding to a halt. Market bets currently place a 72.8% probability on the Federal Reserve beginning rate cuts as soon as March 2024, CME’s FedWatch shows.

In the final readings of the year, U.S. annual headline inflation had slowed to 3.1% in November from 6.4% in January.

That compared with a drop to 2.4% from 8.5% in the euro zone, and to 3.9% from 10.1% in the U.K. — both of which have also fueled expectations of rate cuts next year amid sharp economic slowdowns in both economies.

“The apparent loss of U.S. economic momentum in late 2023 suits the view that the full impact of aggressive US Federal Reserve rate hikes may still be in the pipeline,” economists at Berenberg said in a note Friday.

“Nevertheless, the Fed remains on track to pull off the usually elusive feat of a soft landing in 2024. The easing of underlying inflation has encouraged bond and equity markets to play the Fed pivot theme,” they added, though they do not expect the first cut until May 2024.

Data on Spanish inflation will be released on Friday.

U.K. house prices recorded a 1.8% fall in the year to December, according to lender Nationwide, a bigger drop than recent polls suggested but significantly lower than calls made for a fall of up to 10% earlier in 2023.

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China reported Friday its industrial output expanded at the fastest pace since February 2022 in November, though retail sales growth missed expectations, pointing to a patchy recovery in the world’s second-largest economy.

Economists are approaching the China data with some caution, given a low base effect. The country was in the final months of its stringent zero-Covid curbs in the last quarter of 2022, which had adversely impacted the economy.

“The data is a mixed bag,” Miao Ouyang, Bank of America’s Greater China economist, told CNBC. “If you look at the whole set of data, it still shows that domestic demand is still on the weak side…and [the government] still definitely needs to do more to stabilize the economy.”

China’s industrial output grew 6.6% in November from a year earlier, according to the country’s National Bureau of Statistics Friday. This outpaced expectations for 5.6% in a Reuters poll and follows a 4.6% rise in October.

Retail sales climbed 10.1% in November from a year ago, the fastest pace of growth since May — though analysts had expected a 12.5% spike following a low base in 2022. Retail sales rose 7.6% in October.

“Year-on-year growth in retail sales also rose in November, thanks mainly to faster automobile and Covid-sensitive restaurant sales growth on the back of favorable base effects, although this is well below market (high) expectations and implies a negative sequential growth,” Goldman Sachs economists led by Lisheng Wang wrote in a note.

Fixed asset investment in urban areas cumulatively grew 2.9% in the first 11 months of the year, compared with expectations for 3% growth. China’s urban unemployment rate stayed at 5% in November.

Hong Kong shares, among this year’s underperformers in Asia Pacific, saw gains briefly accelerate after the release of Friday’s data. The Hang Seng pared those gains to eventually close up 2.4% on the day.

The CSI 300 benchmark of the largest blue chips listed in Shanghai and Shenzhen gave up modest gains to close down 0.3% on the day.

The post-Covid recovery of the world’s second-largest economy has so far fallen short of expectations, plagued by a festering real estate crisis, debt risks and chronic youth unemployment.

A slew of policy support measures have not sufficiently lifted economic sentiment, igniting calls for Beijing to amp up its stimulus amid fears of a deepening slowdown.

Still, there are several green shoots that point to Beijing’s focus on growth, while also underscoring the depths of the real estate malaise.

On a cumulative basis in the first 11 months, investments in infrastructure and manufacturing increased 5.8% and 6.3%, year-on-year, respectively; retail sales rose 7.2%, while real estate development investment dropped 9.4%, China’s NBS said.

Official data released earlier Friday showed that China’s new home prices fell for the fifth straight month in November, underscoring weak confidence in demand and investment as some of the largest real estate developers are facing serious debt problems as Beijing strives to deleverage its once-bloated real estate sector.

China’s top decision-making body of the ruling Communist Party on Friday said that the country’s fiscal policy “must be moderately strengthened” to stimulate economic recovery, according to state-run news outlet Xinhua.

China’s Politburo said it would continue to implement “proactive” fiscal policies and “prudent” monetary policies next year, in a bid to bolster domestic demand.

Chaired by Chinese President Xi Jinping, the Politburo’s Friday meeting analyzed the economic work to be undertaken in 2024. It pledged to effectively enhance “economic vitality,” to prevent and defuse risks and to consolidate and enhance the upward trend of an ailing recovery in the world’s second-largest economy.

China’s Politburo said that “proactive fiscal policy must be moderately strengthened, improve quality and efficiency, and the prudent monetary policy must be flexible, appropriate, precise and effective.”

Demand for Chinese goods has fallen this year as global growth slows, stoking concerns about Beijing’s ability to mount a robust post-pandemic recovery. Momentum has taken a hit from a slew of factors, including the country’s beleaguered property market, sluggish global growth and geopolitical tensions.

HSBC Chief Asia Economist Frederic Neumann told CNBC on Thursday that the Chinese economy is unlikely to be bolstered by further fiscal stimulus and still has a “steep hill to climb,” even after a surprise pickup in exports.

Exports in U.S. dollar terms rose by 0.5% year-on-year in November, defying expectations for a 1.1% decline among analysts polled by Reuters. Imports in U.S. dollar terms fell by 0.6% over the 12 months, well below a consensus forecast of a 3.3% increase.

Economists have noted that external demand in China is still relatively weak and warned that policy support that focuses purely on the supply side will likely not be enough to achieve lasting results.

— CNBC’s Elliot Smith contributed to this report.

Dubai, UNITED ARAB EMIRATES — The head of the International Monetary Fund on Sunday underlined the case for carbon pricing at the COP28 climate summit, saying that the oil and gas industry recognizes “the writing on the wall.”

A long-time proponent of carbon pricing, IMF Managing Director Kristalina Georgieva said this approach creates an incentive for polluters to rapidly decarbonize.

Carbon pricing ascertains the cost that a company needs to pay for its planet-warming emissions and is widely regarded as the most cost-effective and flexible way to cut such pollution.

The IMF recently raised its average price forecast to $85 a ton by the end of the decade, up from a previous forecast of $75. Underlining the scale of the challenge, Georgieva said the current average price is around $20 per ton.

“For those that have adopted a carbon price, how do we get big emitters to accept that we need to accelerate decarbonization?” Georgieva told CNBC’s Dan Murphy at the COP28 conference.

“Well, two things. One, without a carbon price, it won’t happen fast enough. So, we have to move to that incentive,” she said.

“Two, Mother Nature is helping us because countries rich and poor are already experiencing the devastating force of climate change.”

Her comments come as policymakers and business leaders convene in Dubai for the U.N.’s two-week long climate summit, which is scheduled to end on Dec. 12.

The conference is a pivotal opportunity to accelerate climate action, at a time when the world is on track to record its hottest year on record and as extreme weather events take their toll across the globe.

For the IMF chief, COP28 marks an important opportunity for countries to reassess policies that incentivize the use of fossil fuels. She stressed that government subsidies for coal, oil and gas hit $1.3 trillion last year.

“Now we have to pull this gradually and substitute with the other part of the incentive, which is pricing. I want to tell everybody who is willing to listen that a carbon price has [been] proven to work,” Georgieva said, adding that existing schemes — such as the EU’s Emissions Trading System — have registered a rapid reduction of emissions.

“Two, it generates revenues. The same European Union got 175 billion euros ($191 billion) collected from [a] carbon price,” she said.

“Three, it can be fair. It is fair first, because the more you pollute, the more you pay, and the less you pollute, the less you pay. But also, many countries [can] take some of this money and give it back, especially to the vulnerable people.”

Asked about the role of the oil and gas industry at COP28 and how to get Big Oil on side with carbon pricing, Georgieva said, “One of the good news that comes from research is that we are going to see the peak of oil and gas in this decade. Consumption is then going to gradually going down.”

“One of the great news from COP is a commitment to triple renewables in energy within the next years. Where the power of COP has come is by mobilizing the voices of people and that is already happening. I cannot think of any industry that is willing to be the enemy of the people,” she continued.

“I think that oil and gas is seeing the writing on the wall. We see many of the oil-producing countries diversifying quite rapidly and we also see an investment coming from money generated from oil into renewables [at] scale.”

War-battered Gaza’s already fragile economy lies in ruins, much like its buildings, following more than a month of bombings by Israel after Hamas militants attacked the country in October.

Even before the war, a majority of Gazans had limited access to affordable, nutritious provisions and were deemed food insecure, according to the United Nations World Food Programme, but the situation has now turned dire. About 80% of Gaza residents were reliant on some sort of international aid before the latest escalation.

“Gaza’s economy is 100% dependent on two sources of revenue: foreign aid and access to Israel’s labor market. The latter is now gone, probably forever. The only thing remaining is foreign aid,” Marko Papic, partner and chief strategist at Clocktower Group, told CNBC via email.

Gaza’s unemployment rate, which has traditionally been one of the world’s highest at above 40%, now stands near 100%, with the enclave’s economy effectively “ceasing activity” indefinitely, according to a  report from the Ramallah, West Bank-based Palestine Economic Policy Research Institute.

Over one month into the war, Gazans have lost at least 182,000 jobs, or 61% of the workforce, according to the International Labor Organization. Another U.N. agency, the United Nations Development Programme, has forecast that Gaza’s development would be set back by 16 to 19 years in its assessment based on economic, health and educational indicators.

On Oct. 7, Hamas militants launched a multi-pronged attack by land, sea and air and infiltrated Israel, killing approximately 1,200 people. In retaliation, Israel launched air strikes and a ground invasion into the Gaza Strip, which has so far killed more than 14,500 people in the enclave.

“Even though the Israelis had occupied Gaza starting 1967 well into the 80s, the economy was doing a bit better, but mostly it was doing well, based on having a number of educated people who went outside of Gaza,” said Kevin Klowden, chief global strategist at Santa Monica, California-headquartered think tank Milken Institute.

Gaza was under the control of Egypt from 1948 until mid-1967 before Israel seized it along with the West Bank following its victory in the Six-Day War against a coalition of Arab countries.

“In the first 25 years of [Israeli] occupation, Gaza had both people working inside Israel [and] it had its own local economy … it was an important part of the Palestinian economy,” Raja Khalidi, director-general of the Palestine Economic Policy Research Institute told CNBC via telephone.

Gazans were able to work in Israel, Egypt, the Gulf and other places 50 years back, and there was a strong professional class, university and airport at the time, but with the current conflict the enclave’s economy now is dire, almost nonfunctional, Klowden also said.

Israel had issued about 18,000 permits for Gazans to work and live in the country and its settlements in the West Bank, but they were revoked after the Oct. 7 attack.

According to the United Nations, during the 1970s and 1980s, the Palestinian economy saw relatively strong capital inflows, largely due to remittances from Palestinian workers in Israel and the Gulf countries. 

Things changed after Hamas gained power in Gaza in 2006 when Israel relinquished its control of the enclave. Hamas has not held an election in Gaza since.

Not only did the Palestinians lose out on working in Israel after Hamas took over Gaza, their trade with the Egyptians also dissipated as Egypt views Hamas as a threat, with investments into the Palestinian Authority-governed West Bank no longer flowing into Gaza, Klowden said.

Since 2007, Gaza has been surrounded by concrete walls and barbed wire fences after Israel imposed an air, land and sea blockade on the Gaza Strip, saying the move was necessary to safeguard itself from Hamas’ attacks. The U.N. classifies Israel as an occupier state over the Palestinian territories of the West Bank and Gaza.

“When people ask me what does it take for Gaza to get back to where it was … We want to go back to where it was 20 years ago, not where it was two months ago,” said Khalidi.

The blockade and repeated wars with Israel since 2008 have hollowed out the enclave’s economy, with its anemic economic growth falling far behind that of the West Bank over the last 15 years, according to the International Monetary Fund. 

“It’s not been a situation where there’s been economic hope. And for the last 15 years, essentially, that’s been the situation,” Klowden said. “You have a very young population that doesn’t see hope out of that. It’s very hard to see an economic future out of that.”

As many as 65% of the 2.3 million Palestinians living in the 140-square-mile sliver of land, between Israel and Egypt are under the age of 24.

“Ultimately, some form of a deal to end the conflict will have to be put in place,” said Clocktower Group’s Papic.

“But that deal is likely to have to see Gulf Arab monarchies and Saudi Arabia footing much of the bill for the viability of Gaza in the future.”