Middle East Economy - Essay Example

THE ECONOMY OF THE MIDDLE EAST Is the economy of the Middle East stagnant? The economy of the Middle East is unfortunately not very diversified. It largely depends on hydrocarbons that it puts up for sale on the international market. Even this commodity it relies on selling through a cartel—OPEC—which manipulates the price.1 It would be hard to call any country in the Middle East a free trading nation with the exception of certain enclaves belonging to the United Arab Emirates. Indeed, if one word could be chosen to describe Middle Eastern economies it would be “stagnant.

”What could Middle Eastern countries do to improve their economies?Although oil is much more valuable than the cotton or other agricultural outputs sold to world markets by Middle Eastern countries in the 19th century, little has changed in the diversification of these economies. The manufacturing sector is limited due to a lack of raw goods, as is the high value goods sector or research and development. Part of the problem is the volatility of the region, but another part is how few economic reforms have occurred in the post-WWII period when so much of the rest of the world was changing.

Instead, undemocratic leaders have seized power and mostly enriched themselves and their cronies instead of cutting red tape to allow private enterprise to flourish. Another aspect of this problem is that many Middle Eastern countries experimented with socialism to varying degrees during the 20th century, nationalizing whole sectors of their economies and mismanaging them. This is a legacy that is still playing out, unfortunately for the people of these countries. The few success stories, for example, Jordan and the UAE, have visionary leaders who have used their countries’ natural advantages to open up to the world and try new things, embracing trade and capitalism rather than the enervation of a state-directed economy.

2 Is it possible for the Middle East to reclaim a leading role in the leading economies of the world?This is all a shame because the Middle East was the place where civilization began and for many years flourished. Some of the world’s first traders, businesspeople, and scientists came from the Middle East, something that is now far from the truth. In order to regain the standing this region once had they need to turn over their economies to their people rather than keeping them tied up in the hands of autocrats and their unelected henchman.

They need to have a responsive form of politics—one that values opportunity and private enterprise not inwardness and sinecures.Works ConsultedBlack, Ian. “As world’s economy crumbles, Dubai keeps building.” Guardian. October 9, 2008. http://www.guardian.co.uk/world/2008/oct/09/middleeast.constructionTaylor, Jerry. “OPEC is no friend of ours.” Cato Institute. March 26, 2004. http://www.cato.org/pub_display.php?pub_id=2586