Economy of the Middle East
From Wikipedia, the free encyclopedia
| Rank[1] | Country | GDP Per Capita |
GDP (PPP) Total ($US B) |
|---|---|---|---|
| 1 |  Qatar |
$ 96,275 | $ 117.3 |
| 2 |  Kuwait |
$ 42,506 | $ 151.5 |
| 3 |  United Arab Emirates |
$ 40,039 | $ 200.5 |
| 4 |  Bahrain |
$ 35,895 | $ 28.5 |
| 5 |  Israel |
$ 28,245 | $ 200.9 |
| 6 |  Oman |
$ 27,852 | $ 73 |
| 7 |  Saudi Arabia |
$ 24,936 | $ 636.3 |
| 8 |  Turkey |
$ 13,447 | $ 937.1 |
| 9 |  Lebanon |
$ 12,704 | $ 48.9 |
| 10 |  Iran |
$ 11,763 | $ 872 |
| 11 |  Egypt |
$ 6,234 | $ 477.2 |
| 12 |  Jordan |
$ 5,406 | $ 32.4 |
| 13 |  Syria |
$ 4,871 | $ 99.2 |
| 14 |  Iraq |
$ 4,000 | $ 113.9 |
| 15 |  Palestinian territories |
$ 2,900 | $ 11.95 |
| 16 |  Yemen |
$ 2,600 | $ 60.48 |
The Economy of the Middle East is very diverse. Composed of the nations of Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, the Palestinian territories, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, and Yemen the individual economies range from hydrocarbon exporting rentier economies to government led socialist economies to free market economies.
Collectively the region is best known for producing and exporting oil. The oil industry does significantly impact the entire region, both through the wealth that it generates and through the movement of labor. Most of the countries in the region have undertaken efforts to diversify their economies in recent years, however.
Contents |
[edit] Bahrain
Owing to large oil deposits and a small population Bahrain has a per capita GDP of $37,200.[2] Despite the nation's ability to provide for its population by relying on its oil reserves Bahrain has made efforts to expand its economic base. It has built refining capacity that outstrips its own oil production. Consequently, Bahrain actually imports crude oil from Saudi Arabia, refines it, and re-exports it. The state has expanded its industrial capacity to include Aluminum and signed a Free Trade Agreement with the United States in an effort to expand its export base. Because of heavy industrialization and the necessary construction that accompanies it and Bahrain's small population it relies heavily on imported labor. Consequently 44% of the population in Bahrain between the ages of 15 and 64 are foreign nationals.[2] Bahrain has also positioned itself as a strong player in Islamic banking in an effort to expand beyond resource exports and into a greater role in the international service industry. [3]
[edit] Egypt
Egypt derives a great deal of its foreign exchange from tourism. Consequnetly most of its labor force is devoted to the service sector.[4] Agriculture is also a large part of the Egyptian economy. The Nile River provides Egypt with some of the most fertile land in the Middle East. It produces food for consumption and export as well as cotton for domestic and foreign textile production. Egypt's other great resource is the Suez Canal. Roughly 7.5% of global sea trade transits the canal providing Egypt revenues in excess of $3 billion annually.[5] Egypt's industrial base dates back to the 1960s when the nation undertook import substitution industrialization policies.[6] The inefficiencies of the state-run program have led the government to begin a privitization program and as a result Egypt enjoyed substantial GDP growth in the first decade of the 21st century.[4] It has also taken advantage of Qualifying Industrial Zone to expand trade relations with the United States. Despite these developments Egypt remains an underdeveloped country with a per capita GDP of $5,500.[4]
[edit] Iran
Iran's major industries are largely states owned. The nature of the Iranian state-owned enterprises has led to a degree of inefficiency. Iran has been able to subsidize inefficient industry through large oil revenues and maintain respectable growth rates. The nature of the state-driven economy has led to significant 'brain drain' in recent years as educated Iranians seek opportunities abroad. Consequently, Iran has begun a privatization effort in order to stimulate trade in accordance with its ongoing five-year plan.
[edit] Iraq
Nearly 30 years of fighting, against Iran in the 1980s and the United States since 1991, has had a detrimental impact on Iraqi economic growth. Oil production remains Iraq's chief economic activity. The lack of development in other sectors has resulted in 18%-30% unemployed and a depressed per capita GDP of $4,000.[7] Reconstruction aid has helped to bolster the nation's infrastructure, however, an ongoing insurgency has handicapped economic recovery.
[edit] Israel
Israel's national leadership established a socialist economy when Israel gained independence in 1948. The purpose of this approach was to establish economic self-sufficiency, particularly agriculturally, in the face of hostile neighbors and to provide jobs for a population rapidly expanding through immigration. The socialist nature of the economy created a great deal of inefficiency which the government was able to offset through foreign aid, first in the form of West German Holocaust reparations then through direct aid, primarily from western nations.
Following the 1973 Arab-Israeli War Israeli defense spending rose dramatically, exposing the weaknesses of the state-run economy.[8] The result was rampant inflation that led Israel to recall the lira in 1980 and issue the sheqel. This move did not sufficiently curb inflation and consequently the sheqel was recalled in 1985 in favor for the Israeli new sheqel. Israel had also undertaken a privatization effort beginning in the late 1970s. The economy received a boost in the early 1990s with the arrival of several hundred thousand immigrants form the former Soviet Union.[9] As a significant number of the immigrants were highly educated, Israel accelerated its privatization in order to encourage the high-skilled workers to stay. The new high-skill labor also attracted a lot of foreign direct investment. Israel's growth over the past decade has been commensurate with western developed nations.
[edit] Jordan
Jordan operates a rentier economy based largely on foreign aid. Consequently its economic fortunes are tied to events in the international community. Jordan is also dependent on remittances which have accounted for nearly 20% of GDP since 1975.[10] Jordan's dependence has had detrimental consequences. Following Iraq's 1990 invasion of Kuwait hundreds of thousands of Palestinians were expelled from other Arab nations. For Jordan this resulted in the significant loss of remittance revenue.[11] Jordan's private sector growth has been led by Palestinians. By taking advantage of Qualifying Industrial Zones manufactured exports have increased, led largely through the growth of a textile industry.[12] Jordan's shift to a free market economy has brought unprecedented amounts of investments into the economy. Jordan has one of the freest economies in the Middle East due to several key economic reforms in the past few years.
[edit] Kuwait
_headquarter.jpg)
Kuwait's small population and substantial oil resources led it to become a Rentier state.[13] The per capita GDP is $60,800.[14] As part of a diversification plan the Kuwaiti government has invested its oil revenues and maintains a sizable sovereign wealth fund. These investment currently account for nearly half of Kuwait's GDP.[15] Because Kuwait's wealth has provided a comfortable standard of living for its citizens it imports most of its labor. Roughly 80% of Kuwait's work force is foreigners.[14]
[edit] Lebanon
The economy of Lebanon has been severely inhibited by internal sectarian conflict and conflict between Israel and Hizballah. The government has incurred significant debt attempting to rebuild the national infrastructure following the Lebanese Civil War. Through foreign assistance the nation has made strides to rebuild, but still remains largely underdeveloped. Currently its trade deficit is nearly $8 billion, its external debt is $31.6 billion, and its per capita GDP is $12,704. Lebanon's economy is being rebuilt, especially by the remarkable growth of it's industry (including cement) and services sector which presents more than 70% of the country's economy. Beirut is regaining its place as a center of the middle east as foreign investments are making a huge comeback in all sectors and businesses and making huge profits, which will encourage more capitals investments.[16]
[edit] Oman
Among the nations of the Middle East Oman is the most reliant on oil for its finances. Currently oil production and export accounts for 69% of the nation's revenue.[17] The oil industry is relatively young in Oman and consequently growth has come rapidly to the country. The government is also developing a plan to sustain its economy and divest its reliance on oil. By 2020 it hopes to reduce oil revenue to just 9% of its income.[18] Along with that plan the country hopes to move away from rentier economics and employ its citizens in the labor market and reduce reliance on expatriate labor.[18] To take its first steps in economic independence it has signed a Free Trade Agreement with the United States and is seeking to do the same with the European Union, China, and Japan.[18] It is currently maneuvering itself into the re-export and heavy manufacturing markets.
[edit] Palestinian Territories
The economy of the Palestinian National Authority has been severely truncated by the ongoing conflict with Israel. Production has dropped since the beginning of the Second Intifada in 2000 when Israel closed its boarders to the Gaza Strip and the West Bank. Israel reinforced its policies after the 2006 elections when Hamas took control of the Legislative Council. Consequently, little beyond basic subsistence aid has made it into Gaza in eight years.[19] The West Bank has fared slightly better since the split in the Palestinian power structure and Fatah took power in the West Bank Israel has opened some trade up. Still the Palestinian Authority is nearly entirely dependant on foreign aid. Collectively the Palestinian territories have a per capita GDP of $2,900.[20]
[edit] Qatar
Qatar currently enjoys the regions highest per capita GDP at $101,000.[21] It has derived its wealth from exploiting its oil and natural gas reserves. With the revenues from its hydrocarbon industries Qatar has established a rentier economy. Qatar has also build established the largest per capita soverign wealth fund in the world. With a population under one-million people the government has not found it necessary to diversify its economy.
[edit] Saudi Arabia
Saudi Arabia has 20% of the known oil reserves in the world. With its oil they have a national GDP of $546 billion and a per capita GDP of $21,300.[22] With this revenue stream the country has become the largest rentier economy in the world. As the oil wealth grew so too did the civil service. It grew from 37,000 in 1962 to 232,000 in 1981.[23] Further, as Saudi Arabia's civil service grew so too did its reliance on foreign labor which currently stand at 5.5 million or about one-third of its working age population.[22]
Currently about 40% of Saudi Arabia's population is under the age of 15.[22] This has led the government to accelerate investment in education and infrastructure in an effort to ensue jobs for the growning population and alleviate a chronicly high unemployment rate. The state has announced plans to build six 'economic cities' in order to diversify its economy.
[edit] Syria
Steming from a 1960s nationalization effort most Syrian economy is run by the government.[24] However, owing to the inefficient public sector, significant domestic subsidies, and considerable intervention investment in Lebanon inflation and external debt have become significant problems.[25] Consequently, the Syrian government has undertaken modest privatization reform in preporation for the opening of the Damascus Stock Exchange in 2009.[26] Modest oil production and an agriculture sector lead Syria's production while most of its employment is in the service sector. Its per capita GDP stands at $4,900.[26]
[edit] Turkey
Turkey is attempting to restructure its economy in an attempt to gain full European Union membership. It began this policy in the early 1970s, abandoning its previous import substitution industrialization policy.[27] As privatization has taken hold in Turkey it has brought with it significant foreign direct investment. Additionally, the Baku-Tbilisi-Ceyhan pipeline has brought revenue to Turkey and enabled it to share some of the regional hydrocarbon wealth. Turkey's economy is currently led by its agricultural and textile sectors. It has a per capita GDP of $12,900, supplemented by some 1.2 million Turks working abroad.[28]
[edit] United Arab Emirates
The United Arab Emirates have used their oil revenues to develop a modern state. They have made considerable investment in infrastructure and are negotiating a free trade agreement with the United States in an effort to diversify their economy. Additionally, the nation has made a notable effort to develop a tourist industry by building attractions such as indoor ski slope and artificial resort islands. The UAE is also making an effort to attract foreign direct investment by offering 100% foreign ownership and no taxes.[29] Because of the massive growth and construction involved in their projects the UAE is heavily dependent on foreign labor.
[edit] Yemen
Yemen has plagued by chronic economic mismanagement. With 35% unemployment the nation relies heavily on expatriot remittances.[30] The reliance on foreign labor markets proved disastrous following the 1991 Persian Gulf War when Saudi Arabia and Kuwait expelled Yemeni workers and curtailed aid to the country in response to its support of Iraq.[31] Most of Yemen's GDP comes from its limited oil production. The bulk of its labor is involved in agriculture where its primary cash crop is khat.
[edit] References
[edit] Notes
- ^ IMF Report on Selected Countries
- ^ a b CIA World Factbook - Bahrain's Economy
- ^ Marcus Noland and Howard Pack, Arab Economies in a Changing World (Washington D.C.: Peterson Institue for International Economics, 2007), 119.
- ^ a b c CIA World Factbook - Egypt's Economy
- ^ BBC News Suez Canal Fact Sheet
- ^ Alan Richards and John Waterbury, A Political Economy of the Middle East (Boulder, CO: Westview Press, 2008), 31.
- ^ CIA World Factbook - Iraq's Economy
- ^ Richards and Waterbury, 204-205.
- ^ Immigration from the former Soviet Union
- ^ Noland and Pack, 121.
- ^ Noland and Pack, 169.
- ^ Richards and Waterbury, 68.
- ^ Richards and Waterbury, 23.
- ^ a b CIA World Factbook - Kuwait's Economy
- ^ Richards and Waterbury, 203.
- ^ CIA World Factbook - Lebanon's Economy
- ^ Richards and Waterbury, 203.
- ^ a b c CIA World Factbook - Oman's Economy
- ^ CIA World Factbook - Gaza's Economy
- ^ CIA World Factbook - West Bank Economy
- ^ CIA World Factbook - Qatar's Economy
- ^ a b c CIA World Factbook - Saudi Arabia's Economy
- ^ Richards and Waterbury, 203.
- ^ Richards and Waterbury, 194.
- ^ Richards and Waterbury, 195.
- ^ a b CIA World Factbook - Syria's Economy
- ^ Richards and Waterbury, 28.
- ^ CIA World Factbook - Turkey's Economy
- ^ CIA Wold Factbook - United Arab Emirates' Economy
- ^ CIA World Factbook - Yemen's Economy
- ^ Richards and Waterbury, 68.
[edit] Bibliography
- Hakimian, Hassan; Jeffrey Nugent (2004). Trade Policy and Economic Integration in the Middle East and North Africa: Economic Boundaries in Flux. New York: Routledge.
- Henry, Clement; Robert Springbord (2001). Globalization and the Politics of Development in the Middle East. Cambridge: Cambridge University Press. ISBN 0521626315.
- Noland, Marcus; Howard Pack (2007). The Arab Economies in a Changing World. Washington, D.C.: Peterson Institute for International Economics. ISBN 9780881323931.
- Richards, Alan; John Waterbury (2008). A Political Economy of the Middle East. Boulder, Colorado: Westview Press. ISBN 9780813343488.
[edit] See also
- Economy of Asia
- Economy of Africa
- Middle East and globalization
- List of stock exchanges in Southwest Asia
|
|||||||||||
|
|||||||
|
|||||||
