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Disparity in Middle East

The Middle East is a region that boasts a rich cultural heritage and a diverse political and economic landscape. Despite this, many countries in the region continue to face challenges in promoting growth, stability and reducing income inequality. According to the World Inequality Database (WID), the Middle East is considered the most unequal region globally, with a significant proportion of national income accruing to the top 10%. This has led to high levels of poverty and mass unemployment, particularly among the youth population. In this light, it is important to understand the underlying reasons behind the economic disparities between countries in the Middle East and to explore how they can be addressed. The availability of natural resources, political and economic openness, the strength of institutions, and the impact of historical events and legacies are some of the key factors that shape the political and economic success of countries in the region. It is imperative that policymakers and researchers alike consider these factors to create a framework for promoting economic and political development in the Middle East and to address the dangers of mass poverty in the region.


The availability of natural resources is a crucial factor that affects the political and economic prosperity of Middle Eastern countries. According to data from the US Energy Information Administration, the top oil-producing countries in the Middle East are Saudi Arabia, Iraq, and the United Arab Emirates, which together accounted for over 40% of total oil production in the region in 2020. These countries have capitalised on their wealth and invested in the development of critical infrastructure, education, and other key sectors, which has led to robust economic growth and political stability. For instance, according to the World Bank, Saudi Arabia's GDP per capita increased from $15,127 in 2010 to $21,144 in 2020, while the UAE's GDP per capita rose from $42,475 in 2010 to $49,715 in 2020. This demonstrates the correlation between the abundance of natural resources and economic prosperity in the region.


The level of political and economic openness is another crucial factor that affects the economic and political success of Middle Eastern countries. According to the World Bank's Ease of Doing Business Index, the UAE and Qatar rank 11th and 17th, respectively, out of 190 countries in terms of their efforts to create a business-friendly environment. On the other hand, countries with more authoritarian political systems or greater levels of economic protectionism, such as Iran, have seen slower economic growth and increased political instability. According to the World Bank, Iran's GDP per capita increased from $7,371 in 2010 to $9,786 in 2020, a slower rate of growth compared to the UAE and Saudi Arabia. These findings suggest that the level of political and economic openness is closely linked to economic growth and stability in the Middle East.


The strength of institutions and governance is another key factor that affects the political and economic success of Middle Eastern countries. The World Economic Forum's Global Competitiveness Index ranks the UAE 26th out of 141 countries in terms of the strength of its institutions, while Iraq ranks 130th. This highlights the importance of robust and effective institutions in promoting economic growth and political stability.


One of the key findings from a number of studies is that countries with strong institutions, including an independent judiciary, are more likely to experience higher levels of foreign direct investment (FDI) compared to countries with weak institutions. For example, several studies by the World Bank found that countries with higher scores on measures of rule of law and the independence of the judiciary tend to attract more FDI. Additionally, research has shown that the quality of institutions, including the rule of law, is positively related to economic growth. A study by La Porta, Lopez-de-Silanes, Shleifer, and Vishny (1998) found that countries with better legal systems, as measured by the rule of law, tend to have higher levels of economic growth. In contrast, countries with weak institutions, particularly those with weak judiciaries, may struggle to attract investment and promote economic growth. This is because weak institutions can create a business environment that is characterized by corruption, weak property rights, and unpredictability, which can deter foreign investors and hinder economic growth.


Finally, historical factors have also shaped the region's political and economic landscape. This factor encompasses the impact of colonialism, wars, revolutions, and other past events that have shaped the development of the region. For instance, the legacy of colonialism has had a profound impact on the region, with European powers carving up the Middle East into a patchwork of nation-states with artificial borders and promoting cultural, ethnic, and linguistic diversity. These colonial policies have had lasting effects on the region, including the suppression of local languages, religions, and cultural traditions, the disruption of economic development, and the establishment of authoritarian political systems.


Conflict, including civil wars and international wars, has also had a profound impact on the Middle East. The ongoing conflict in Syria provides a clear example of the negative effects of war on a country's economy and political stability. According to the World Bank, the conflict in Syria has resulted in a decrease in its Gross Domestic Product (GDP) per capita from $5,000 in 2010 to $2,000 in 2020. This highlights the devastating impact that conflict can have on a country's economy, as well as its ability to attract investment, create jobs, and promote stability.


Another historical event that has shaped the Middle East is the Arab-Israeli conflict, which has had a profound impact on the region for over seven decades. The ongoing conflict has resulted in displacement, poverty, and political instability in the region, with a direct impact on the economies of the countries involved. For example, the blockade of the Gaza Strip has limited the flow of goods and services in and out of the territory, leading to high levels of unemployment and poverty.


In conclusion, the factors that influence the political and economic success of Middle Eastern countries are complex and multifaceted, including the availability of natural resources, the level of political and economic openness, the strength of institutions and governance, and the impact of historical events and legacies. To understand and enhance economic and political development in the region, it is essential to consider these factors and use a range of quantitative methods to gain a deeper insight into the growth and stability patterns in the Middle East.







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