Economics in the Middle East - Research Paper Example

Economics in Middle East Middle East has been playing a vital role in the overall economic trend in most parts of the world due to its important economic endowment and geographical location. It unique social, economic and political systems have remained one of the greatest concepts that dictate the direction of its economy. It is important to note that analysis of Middle East economy captures the various countries within the region and the overall contribution in the economic trend observed in the entire region (Fischer, et al, 31). Middle East has been on the news headline for a long time over a number of social, political and economic gridlocks that significantly affect its economic performance. In discussing its economy, a number of factors need to be discussed that include the socio-cultural diversity that forms part of this region. The pertinent issues that need to be captured in discussing the economy of Middle East ranges from its extensive oil production, strict religious laws in some parts, human rights issues, terrorism cases and their trading policies. The economy of Middle East needs to be assessed from micro-level with consideration to socio-economic and political environment differential that exists across its different members (Devlin, 42). It is also worth to note the role of security matters in respect of the economic potential of this region. It has been an issue of global debate on how to deal with the various internal and international boundary issues that has always elicited war among Middle East countries with substantial effect on the economy. One of the greatest Source of Economic strength of Middle East is in crude oil. Over 90% of the nations in this region produce oil which is one of the most useful natural resource driving the global economy. Production of such a strategic resources has always given Middle East states upper hand I bargaining for a better economic policies that include fair global prices which is reflected in their fairly stable and steadily growing economies. The Use of fossil fuel in various industries across the world has made Middle East to be attractive in the sight of many nations through its major contribution of this precious commodity. Under the Umbrella of the oil producing states (OPEC) which is dominated by the Middle East countries, they have enjoyed relatively constant revenue in the international market. Their ability to influence the economic and financial trend in the world is a tool they use optimally to bargain for various economic prosperity oriented pricing policy. It is worth to note that in terms of climate and nature of land, this region has land which is over 50% desert and covered with sand with harsh scotching temperature that greatly demands for organized economic strategies to compensate for. Due to the massive oil exploration and export most of the countries in Middle East have been able to reclaim land and improve the topography of some parts of the region for various economic uses like the fruit production in Israel. It is also worth to underscore the significant influence of the cultural and religious policies that prevail in this region which is predominantly Arab with exception of the Jews state of Israel and other races forming the minority. The Economy of Middle East is surrounded by a number of fascinating events that makes it a unique part of the world. Despite experiencing various challenges, they have relentlessly fought to ensure that they are within the pace of global economic growth. It is worth to note the increasing investment in infrastructure that Middle East is undertaking. The governments of Most Middle East states have made it their Priority to improve the infrastructural development as part of the drivers of economic growth and development in the region. Take the case of United Arab Emirates and its cities like Dubai, cities like Abu Dhabi in Saudi Arabia, Iran, Israel and Qatar among others. They have outstanding infrastructural investment which include better roads, railways, airports and recreational sites that includes sports facilities. This has been achieved despite the desert climate region under which most of these states falls. The increased infrastructural development can be seen in the robust economy of Dubai which has virtually become the commercial hub of the region attracting people from all parts of the world to trade in various commodities. Emirates airline is one of the global example of air transport prosperity which has its connection with the Middle East nation of UAE. The emerging infrastructural development of Middle East is responsible for the historic voting in favor of Qatar to host the 2014 world cup that demands massive ultra-modern infrastructural expenditure that include reliable and world class transport network, security and comfort for locals and the visitors alike. The effect of globalization has not affected the Middle East either since it has been on the path of adopting modern technology like other nations around the world. Increased investment in information and communication technology has gained pace in this region with a record increase in number of people who are able to access internet and use mobile phone technology in communication and exchange of information. Technology has been constructive in the Middle East in terms of opening the word for most of the people who had previously been brainwashed to believe only one side of life worth particular focus to religious belief and its effect on economic policies on the people (Fischer, 35). Although there are still restrictions of use of some social networking sites like Facebook, twitter and Skype among others, there has been a significant improvement in the economic productivity due to application of capital intensive mode of production by most of the firms operating in the region. Dubai is one example of the Middle East city that is dubbed internet city with specific parts marked technology free zones which has significantly attracted many tenants across the region and the world thereby boosting its revenue collection and aggregate economic performance of the city and the UAE at large. The technological advancement in the Middle East has been exhibited by the Iran state which has been on the international news headline for its attempts to develop nuclear technology. Iran is one of the countries that have exercise economic independence due to the several economic sanctions they have either been threatened with or actual given by the US allies under the security issue in line with UN conventions. Nuclear technology is double cutting in terms of the economic and political aspect of a country. If harnessed to produce nuclear power, the country will gain a lot from increased productivity and reduced production cost. On the other hand Iran stands out in the Middle East as the most defiant state in regard to the widely opposed developed of nuclear weapons (Dralonge, et al, 44). This issue has brought a lot of tension in the region eliciting cold rift between the US in collaboration with Israel against Iran and this has dealt Iran a great economic blow in terms of sanctions. It important to note that increasing application of internet technology has boosted the market of the Middle East products through e-commerce and the gradual convergence in taste and preference of commodities by its citizens through the globalization effect and this explains the exponential growth of the economy of United Arab Emirate city of Dubai. It is also important to note that the government strict prevalence over the use of the social media which a very important coefficient of economic development has retrogressive effects on the general performance of most Middle East states. Tourism has become one of the sectors that are currently prevailing in most of the Middle East region economic growth targets. Middle East has great cultural heritage that cuts across religion, landscape and architecture. Most of the states in this region have realized the tourism potential that they harbor and only need to open up and exploit and this has been experienced in various parts with a typical example of the magnificent architecture in Abu Dhabi and Dubai. The great desert features like sand dunes has been a great tourist attraction which earns most of the Middle East countries foreign revenue. It is important to note that the better part of this region falls on an attractive site of various topography features. The magnificent architectural techniques in the Middle East is led by the great features in Dubai like the Burj Khalifa, the great temple of Jerusalem in Israel and the various man made water features in other gulf states. The tourism sector incorporates even the improvement of the other sectors like transport in the form of air travel, sea, and road. There is also the food and beverages consumption rise attributed to the tourists who hail from diverse cultural background to have an experience of the Middle East delicacies amid hot climate which is a diametric opposite of the winter in parts of Europe. Middle East is the center of Islam religion with the holy town of Mecca being the headquarter. In this respect, there is always the widespread airline travels among the pilgrims and faithful for annual religious festive and tourism. The holy month of Ramadhan is accompanied by intensive shopping for food and niceties and this has greatly influence the economic boom in the region during such seasons. This is a case of the role of the Islam religion that dominates the region in its economic performance. The homogeneous doctrine of the Muslim community that dominates the Middle East has been very instrument in terms of implementation of various economic policies. It worth to note that they believe in equality and this has seen most of the states in the region practicing more socialist economic ideologies with minimal blend of capitalism an issue that partially explains the relatively fair distribution of income among many citizens (Dralonge, et al , 56). Apart of Israel, most of the Middle East countries are members of the region’s largest economic block in Arab league. This is one of the forms of economic integrations that provide an avenue of formulating the region’s economic policy with a wide acceptance over minimizing trade barrier for a prosperous economic growth and global markets competitiveness in respect of their exports like crude oil. It is worth to note that Islamic religion widely practiced in the Middle East virtually controls the better part of the prevailing social, economic and political conduct of the people and this is a unifying factor in terms of relative similarity in economic policy that makes regional trade and diplomatic relations among the region’s member countries. Efforts to gain economic growth in the Middle East are under the threat of a number of socio-economic and political challenges. There is the long standing strained relationship between Israel a number of Arab states in respect to the Palestine boundary stale mate. It is important to note that the frequent bitter armed military engagement in interstate wars and economic sanctions Israel gets from other Arab states has not served the region well. This dispute has always led to interception and confiscations vital economic growth instruments in the Middle East which would otherwise have propelled it to great heights. Israel is among the top global fruit producers and exporters which could be serving the widely desert Middle East but, due to the series of offensive attack from neighboring middle East countries like the recently experienced Lebanon based Hezbollah fighters significantly suppresses the region’s economic progress (Fischer, et al ,38). The battles have always led to destruction of infrastructure and displaced civilian with devastating economic consequences. The Iraqi versus Kuwait war which took place in 1991 under the reign of Saddam Hussein .This conflict culminated to gulf war that later plunged Iraq into military scrutiny by the US for a long time significantly affected its infrastructural investment and tourism sector. Such international disputes accompanied by bombing and destruction of the infrastructure has been costly to the entire region in respect of the restructuring funding which would otherwise been used in expanding the economy. Such incidences have been responsible for the unfavorable balance of payment for most of the Middle East countries which would be worse if it were not for the crude oil resource. The Middle East has been the greatest casualty of the terrorism activities that is the current topic of discussion around the world. This social ill has much effect on the economic prosperity as it directly blocks execution of various policies. The Middle East has been struggling with various terrorism groups headed by the Al Qaeda which has led to the frequently observed bomb attacks on infrastructures and people has been a security issue that is almost getting out of hand of the government authorities (Dralonge, et al , 54). The Middle East Economy is dependent majorly on crude oil which is extracted from the deserts. The insurgents and the other terrorism wings have always bombed some Oil wells and this is retrogressive in terms of the economic position of the Middle East states. The terrorists groups have even been at the forefront of engaging government on war to control some parts of the oil fields and this significantly create instability and divergent economic policies which is not healthy for the citizens. A lot of funds have been injected to counter the terrorism architects at the expense of economic expansion. Funding of such activities which is equally undertaken by Some Middle East warlords which propagates black market operations. The economy of Middle East has also been affected from the tourism front due to the common cases of abduction and suicidal bombing attacks undertaken by the terrorists and other illegal militia outfits (Fischer, et al, 40). There is perceived target of non-Muslim believers and religious extremism ideas that is responsible for the insecurity threat realized in these nations. In respect of the various issues that affect the economic policies in Middle East, it requires a lot of research to establish multiple options for dealing with the critical once especially the insecurity issue. It is also imperative that the recent civil strife that is calling for a revolution in the Arab states. This is still going on to date in Syria with widespread destruction of property and loss of life. Poor governances which is marred by dictatorship is another recipe for the rebellion in Middle East which is mostly characterized by unfair allocation of resources hence high unemployment rate (Devlin, 51) . The high cases of insecurity has significantly discouraged foreign direct investment in some parts of Middle East and this is responsible for the lack of confidence in their currencies and bilateral engagement with other states. This is a great threat to the strength of the region’s several currencies and instability of its financial market in the global stock exchange competitiveness. In summary, a number of issues remain pending sound resolution to establish stability in Middle East and attain positive economic growth over time. It is important to underline the role of international community in its intervention measures in regard to the economic effect of terrorism in the region and the world at large. If recourses can be harnessed well and governance restructured in line with democratic politics the Middle East would do even better. Works Cited Fischer, Stanley. The Economics of Middle East Peace: Views from the Region ; [papers Originally Presented at a Conference at Harvard University on November 14-16, 1991]. Cambridge, Mass. [u.a.: MIT Press, 1993. Print. Devlin, Julia. Challenges of Economic Development in the Middle East and North Africa Region. Singapore: World Scientific, 2010. Internet resource. Dralonge, Richard N. Economics and Geopolitics of the Middle East. New York: Nova Science Publishers, 2008. Print. Read More