Globalization, Economical Sovereignty and Middle Eastern Development, from Principles to Reality - Essay Example

Research Proposal Topic: Globalization, Economic Sovereignty and Middle Eastern Development: from Principles to Reality: A Case Study A central argument of this dissertation involves the question of whether models for sustained economic growth and development that have been utilised in exploring the economic growth of Western Europe and the US are applicable to the Middle East. To accomplish this, the most important economic theories that support or challenge the importance of globalisation for economic sustainability were explored, specifically as they relate to the economic development and political sovereignty of the Middle East. This theoretical discussion of economic growth, globalization and national/political sovereignty constituted the framework for exploring a case study of two Middle Eastern nations in regard to the measurable effects of these economic principles on their current and prospective economic development, Jordan and Saudi Arabia. The methodology involved a data-base assessment of the major economic, social and political indices of each of these two Middle Eastern countries and the degree to which economic developments related to free-trade and globalisation have impacted these important economic parameters. Graphs and statistical assessments of key economic data were also prepared and analysed as part of a comparative assessment of the relationship between each country’s involvement in global markets and trade and the effects on national sovereignty, political stability and economic growth. • Aims and Objectives The Middle East is at the crossroads of a rapid pace of economic development that could dramatically increase its role in the world economy (Al-Awad and Harb, 2005; Al-Yousif, Y. K.2002). There are many reasons for the changing economic climate, including a trend towards economic globalisation, increased political stability and prospects for Middle Eastern peace and improved trade relations between Middle Eastern countries and other nations (Beck et al. 2000; Boulila and Trabelsi, 2004). An important question that this research is designed to explore is whether sustained economic growth can be achieved in the Middle East in the context of a globalised economy base as it competes with the need for Middle Eastern countries to maintain their economic, political and cultural sovereignty (Chapra, 2001; Creane et al., 2003). To answer this question, the basic principles of economic growth will be addressed as they pertain to the unique and diverse aspects of Middle Eastern economic interests and political realities. The requirements for economic sustainability will also be explored in this context. The central argument of this dissertation involves the question of whether models for sustained economic growth and development that have been utilised in exploring the economic growth of Western Europe and the US are applicable to the Middle East (Niblock and Wilson, 1999). These models have been very useful in explaining the tremendous economic growth of Western Europe and its offshoots, including USA, Canada, Australia and New Zealand, between the years 1820 to the present (Wallerstein, 1984). Moreover, these economic models have been useful in explaining the sustainability of economic growth in developed regions of the world, such that these continue to represent some of the world’s most advanced and highly developed nations (Held et al., 1999; Held and McGrew, 2000). Some of the basic economic principles that have been used to explain this tremendous economic growth of the Western economies include a favourable geography, type of political system, technological innovations and feedback mechanisms between industry and political systems that support a positive economic growth (Darrat, 1999). It has been argued by some influential Middle Eastern economists that the development of sovereign, sustainable economic institutions within Middle Eastern nations is an essential precursor to political stability and effective participation in global economic markets (Clement and Springborg, 2001). .Moreover, participation in free-trade agreements is considered by many Middle Eastern experts, such as Thomas Friedman, to be essential to sustained economic growth and viability of the Middle East in the 21st century. According to Friedman, the process of globalization requires the democratisation of information, the rise of the individual investor and the spread of technology (Friedman, 1999). The goal of this dissertation is to explore the notion that economic sustainability in the 21st century requires full participation in the global financial and industrial markets. To accomplish this, the most important economic theories that support or challenge the importance of globalisation for economic sustainability will be explored, specifically as they relate to the economic development and political sovereignty of the Middle East. This issue will be addressed fro a practical perspective by means of a case study analysis of the impact of globalisation on two countries representative of the diverse cultures and governing structures of the Middle East: Saudi Arabia and Jordan (Wiseman, 1997; Hopkins, and Wallerstein,1996). Rationale Neoclassical models of economic growth have been useful in explaining some aspects of the rapid escalation of economic growth experienced by East Asian countries over the past few years (Halliday, 2000). Moreover, they have been used extensively to explain the rapid convergence of economic development in Northern and Southern Europe over the past several decades. An important premise of this thesis is that the neoclassical models of economic growth are not adequate to explain the important determinants of economic growth and sustainability in the Middle East (Kuran, 2002, 2004). These basic parameters of economic growth and stability are insufficiently addressed by neo-classsical economic theory, which is driven by strictly market parameters (Tirole, 2002). The market institutions that are assumed to constitute the basic drivers of economic advancement are the basis for global economic growth in underdeveloped and rapidly developing areas of the world, including Middle Eastern countries (Held and McGrew, 2000). In this context, it is assumed that the marginal product of capital is greater in these countries and the importing of pre-existing technologies that drive economic growth is rapid, and that these principles are sufficient to explain the rapid expansion of these economies and their current greater rate of economic growth than in Western, highly developed countries (El-Gamal, 2006). In contrast, a central argument of this thesis is that a more expansive sociological perspective is required to address the issues of economic growth and sustainability in Middle Eastern nations. Among the important principles to be addressed are the role of social institutions and the relationships between different countries across national borders as they apply to economic growth and development in the Middle East (Issawi, 1982, 1995). In addressing these questions, important contributions to economic and social theory will be explored as they provide insight into these central questions of Middle Eastern economic growth (Ohmae, 1991, 1995). Among these are the writings of Max Weber, who described the rise of social institutions as they relate to capitalism and the limitations of these sociological and economic principles as they relate to economic development in the Middle East (Wilson, 1995). In addition, the influence of Marx and Engels in describing the spread of capitalism and economic growth will be explored as they relate to important issues of economic growth in the nations of the Middle East (Gill, 1998; Farrell, 1999; Schumpeter, 1911). According to the World Systems Theory, national boundaries are no longer the context in which political and economic ascendancy are measured (Reich, 1991). Rather, the degree to which a country or region is capable of competing on the world economic stage determines its overall political, military and economic power (Hakimian and Nugent, 2003). The economic policies of globalisation and the theoretical foundations of these economic issues will be further assessed as they relate to a relevant case study. • Methodology This analysis will address the questions of geographical resources, political institutions and many current issues that relate to economic sovereignty in the context of an increasingly globalised economy as factors that must be explored in order to explain the essential questions of economic growth and sustainability by nations in the Middle East in the 21st century. The many factors that may be critical to economic growth and sustainability in this region of the world will be explored by means of a thorough review of the current literature by leading economists. This theoretical discussion of the important themes of economic growth, globalisation and national/political sovereignty will constitute the framework for exploring a case study of two Middle Eastern nations in regard to the measurable effects of these economic principles on their current and prospective economic development. The case study to be explored in this dissertation involves a comparative assessment of two Middle Eastern nations that differ significantly in their participation in the global economic markets and an assessment of their relative political, military and economic strengths as they may correlate with either nationalistic versus free-trade globalised approach to economic development (Owen, 2000). In the context of assessing this case study the important theoretical viewpoints including hyperglobalist, sceptics and transformationalist perspectives that invoke globalisation as the underlying force that has and will continue to transform society versus the nationalist approach will be explored. The Middle Eastern nations to be studied are Jordan and Saudi Arabia. The methodology will involve a data-base assessment of the major economic social and political indices of each of these two Middle Eastern countries and the degree to which economic developments related to free-trade and globalisation have impacted these important economic parameters. Among the data assessments are the key categories of GDP, external debt and trade, demographics, income, fiscal and monetary indicators. The impact of political organisation, infrastructure and involvement in world trade organizations will be assessed. Graphs and statistical assessments of key economic data will be prepared for both Jordan and Saudi Arabia as part of a comparative assessment of the relationship between each country’s involvement in global markets and trade and the effects on national sovereignty, political stability and economic growth. Structure of the thesis Table of Contents I. Introduction Theories of economic growth/ globalisation/ nationalism/ economic sovereignty The role of culture in economic development of the Middle East The role of political institutions as they relate to economic development in the Middle East Measures of economic development Models of Middle East economic development Implication of global economy on Middle Eastern economic development II. Case study to be analysed in the context of globalization and national economic sovereignty Summary of the case study: Globalisation impact on economies of Saudia Arabia and Jordan Materials and Methods used to assess case study Results: Analysis based on the potentially conflicting interests of globalization and nationalism as they relate to economic development in Saudi Arabia and Jordan III. Conclusion: implications of case study analysis on understanding Middle Eastern Economic development. IV. References Bibliography Abdel-Khalek, Gouda. 2001. Stabilization and Adjustment in Egypt: Reform or De-Industrialization. Cheltenham, UK and Northampton, MA, USA: Edward Elgar. Ajami, F. 1998. The Dream Palace of the Arabs, New York: Pantheon, Al-Awad, M., and Harb, N. 2005. Financial Development and Economic Growth in the Middle East. Applied Financial Economics (15): 1041-1051. Albrow, M. 1996, The Global Age, Polity, Cambridge. Al-Yousif, Y. 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