|
AL HABTOOR INFORMATION AND RESEARCH DEPARTMENT Twenty years ago, the countries that make up the Middle East, were of great
economic interest to governments and businesses of Western Europe, America and Japan. These industrialised countries depended heavily on the regions oil to fuel their
economic growth and were constantly worried about the possibility that these very supplies would be cut off.The region was also important as a market for western industrial exports, as it was
then the richest market in the developing world; the regions states were ploughing their huge oil revenues into the development and modernisation of their countries. At
one time in the 70's, there was more construction being undertaken in the Gulf Region than in all of the United States. Governments and leaders in the region had a
widely held belief that by creating rapid growth, modern and sophisticated economies, all tied to the high price of oil, they would see a transfer of economic
power, from the west, to their resource rich countries.
" The most obvious signs of the Arab World's economic failures are the low growth rates in the region" .
|
After promising so much in the early boom years of the seventies, the region,
through the eighties and nineties, has become an economic backwater. In part, this is due to the simple fact that demand for oil has eased since 1973, while at the same
time, pricing has become increasingly variable with peaks and troughs in world oil stocks causing oil incomes to fall in real terms for all the region's economies. Some
reports suggest that the revenue per barrel is much the same as in 1973. These fluctuations in the price of oil on world markets have major implications for
government spending, by making long term planning and budgetting extremely difficult. The regions governments are almost entirely dependent on oil, making their
economies hostage to world demand, which, by and large, is completely beyond their control.
Continues >>> |
