Project Reflection

Hibah Almarhoon

Dr. Chris Micklethwait

CULF 3331-22

1 July 2017

Project Reflection

            Economic situation is a triggering factor for many revolutions around the world. The MENA region encountered a series of revolutions that started in 2011 and became known as the Arab Spring. Although various demands and protests shaped the revolutions in the involved countries, economy was a common cause of the protests. Considering the large area of the MENA region, its natural resources vary, and its economic activities varies as a result. However, hydrocarbon exporting rentier economies exist in most of this region’s countries, with varying quantities and extraction abilities.

The gulf cooperation council countries have a unique situation in the Middle East, the dominant attribute between these seven countries is general economic stability and luxury due to the massive monies generated from oil and gas, although some internal variation exist. Saudi Arabia, Qatar, and the United Arab Emirates, are three examples of the GCC countries that this project examines.

To understand the general aspects of the economy of Saudi Arabia, I have read a document from the U.S. Library of Congress. The document is titled, The Economy, and it provides a timeline of the oil industry in Saudi Arabia and an explanation of the strong position the kingdom has in the global oil market. Helen Chapin Metz, the author of this case study, talks about Saudi Arabia before and after oil. Before the discovery of oil in 1938, the Saudi economy was based on agriculture, trade, and religious tourism to the two Islamic holy sites, Mecca and Medina. The Saudi Arabian oil industry flourished in the aftermath of the second world war as there was a high need for the cheap Saudi Arabian oil for the European countries to rebuild their destroyed infrastructures, and the Saudi oil later became a necessity to sustain the international economic stability. The importance of the Saudi oil is easily understandable from the intervention of the U.S in the 1991 Persian Gulf war; to protect its favorite oil provider in the world. Nowadays, Saudi Arabia is one of the largest oil producing countries it has a strong influence on the international oil prices; and its current strategies to secure its economy among the Organization of the Petroleum Exporting Countries (OPEC) is expected to damage many of the smaller oil producing countries in both the short and the long run.

The end of the Oil Age article from the economist magazine talks about the predicted fate of oil, and it presents the possible global shift toward other energy sources. “The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil.” said Sheikh Ahmed Zaki Yamani, former Saudi Arabian oil minister. The article is saying that the dependence of the Middle East on oil revenue is somehow resulting from the dependency of the world on the Middle Eastern oil. What would happen if this necessity vanished? This is the question that the economists are asking to encourage the government to take serious steps toward diversifying its revenue sources. Indeed, to protect itself against any further oil prices storm, the government has declared a developmental program called vision 2030. The vision basically explains the economic, political, and cultural reforms the authorities are considering implementing. The vision emphasis the tendency of diversifying the economy, strengthening the private sector, and encouraging the foreign direct investment by removing the current barriers they might face. A thing that I know about Saudi Arabia is its abundant mineral stocks, like gold and zinc that are being relatively ignored because they are not easy to extract. If improving the mining industry became a priority of the government, this could offer tens of thousands of jobs, and provide a new investment opportunities that should not be missed as I think.

The United Arab Emirates is another gulf country that has a very strong economy. According to Forbes lists, the UAE is ranked number 33 in the Best Countries for Business List. As of December 2016, UAE GDP is $370 B; and it has a notable growth rate of 4%. While the UAE population is 5.9 million, it only has 2.4% unemployment rate. Its open economy allowed the per capital income to reach as high as $40,400. Most significantly, 100% foreign ownership and zero taxes are allowed in the country’s free trade zones. Regarding to the recent economic situation, and in response to the recent instability of oil prices, the government has taken many successful steps to get over the crisis. For instance, there has been well done job in diversifying the economy recently; which reduced the based oil and gas GDP’s portion to 25%. Furthermore, the government is investing more in the banking sector to boost it and generate more liquidity.

Dubai is one of the most distinctive cities in the UAE, Dubai government website offers data about the socio-economic indicators of Dubai. Dubai has a strategic location which makes it the biggest re-exporting center in the Middle East. Many foreign investors are attracted to Dubai due to the liberal government policies, and the excellent infrastructure it has. Dubai is also ranked as the Arabian Gulf’s leading multi-purpose business center. Dubai is also a thrilling tourism destination. All these facts make Dubai the first international business center in the Arabian Gulf. The private sector in Dubai has improved many real estates such as hotels and recreational facilities over the past few decades. All these factors made Dubai a unique city in the heart of the Arabian Peninsula. In 2008, Dubai suffered from a financial crisis and there was a huge doubt whither it is going to overcome the problem or not due to the drastic decline of real estate prices. However, with the help of Abu Dhabi’s government and the UAE Central Bank, Dubai recovered with the least possible costs. On the other hand, the country has also reduced social spending such as minimizing fuel subsidies. Nonetheless, creating more jobs, improving the private sector, and enhancing economic diversification all have been promised by the government.

Qatar another small GCC country with a relatively strong economy, Qatar Census official website talks about the discovery of oil that dramatically changed the country toward the better. An article by Robert Fisk talks about the current crisis between Qatar and some neighboring Gulf states. It suggests some possible causes of the crises like Qatar’s continues support of terrorism. The rage on Qatar is not limited to the Gulf countries, since other countries like the Maldives and Egypt have also broken their relations with Qatar. A step that could not be understood but by the money language. For instance, the Maldives is expecting a Saudi five-year loan facility of $300m, and many other investment and benefits. An important fact to mention is that a massive US military air base exists in Qatar. Which is believed to be a guard shield for Qatar against any possible invasion from the neighboring countries, as Sheikh Hamad, the previous emir thinks. This is not the first time that the Saudi government expresses its anger from the Qatari government conduct, as there was tension in 2014 as well but it was settled at that time. However, I wonder what caused the anger to reappear again only shortly after the visit of president Trump to the 2017 Arab-Islamic summit in Riyadh. If Trump gave the green light to the Arabs to turn their faces against Qatar, how could Qatar use the existence of the U.S base on its land as a mean of protection and be confident about it? The U.S could easily move the air base to any other gulf country, so it is unrealistic to rely on the base as a protector.

Although located in the Arabian Peninsula and bordering two GCC countries, Saudi Arabia and Oman, Yemen is surprisingly not a member of the GCC. Many factors justify this isolation, but the failing economy seems to be the biggest factor as I could understand. The Yemen page on the world fact-book from The Central Intelligence Agency provides significant information about the history and the economy of Yemen. North and South Yemen were two separate countries that were not unified until 1990. However, the new Republic of Yemen encountered many secessionist movements since its establishment; and conflict existed between the government and the Huthis, a Zaydi Shia Muslim minority in the northwest. Inspired by other revolutions in the Middle East, the Yemenis decided to have their own revolution in protest of common problems like high unemployment, poor economic conditions, and corruption. Yemen is a low-income country, and the current conflict has worsened its economic situation. The GDP PPP is at $31.33 billion, while the per capital GDP is at $2,500 according to 2016 estimates. Agriculture accounts for 23.6% of the GDP and the products include fruits, vegetables, and cotton. Industry on the other hand accounts for 8.9% and the industries include crude oil production and petroleum refining. The remaining 67.5% is generated from the services sector. The Yemen’s exports were halted by the ongoing war. Inflation has accelerated and many damages occurred to the infrastructure. Currently, Yemen is in a real crisis in terms of deteriorating economy and declining water sources and food scarcity.

The latest MENA Economic Monitor Report on Yemen in Spring 2016 shows that the GDP of Yemen has contracted by approximately 28 % in 2015. The war has disrupted the economic activities and destroyed the infrastructure. The Central Bank of Yemen (CBY) faced a lot of pressures during the last few years, and is stopped many of its support activities. Currently, Yemen has the highest poverty rate in the Middle East, and about 37.3 % of the population are living below the poverty line of $2 a day. Malnutrition is also a wide spread severe problem in Yemen. During the war years, thousands were killed and millions were forced to flee the war zones, 2.5 million people are internally displaced according to 2015 estimates. The deteriorating sanitation and the unimproved water sources raised the incidences of sever epidemics like diarrhea and cholera. Humanitarian assistance is needed at all scales to help rebuilding the country and saving the survivors.

Outside the GCC countries, there are other countries that are known to have abundant reserves of oil and gas as well, such as Iraq and Iran. According to The World Bank Organization, Iran has the second largest population in the MENA region, and with a Gross Domestic Product (GDP) of US$412.2 billion, Iran is considered the second largest economy in the region. The Iranian economy is dependent on agriculture, services sector, manufacturing, and the hydrocarbon sector. Must noticeably, Iran has very large reserves of crude oil and natural gas; and the economic activity and government revenues are heavily dependent on oil revenues as a result. 20-year national vision, development plan, has been adopted by the government in 2004. The vision includes market-based reforms and consists of three main objectives; developing a resilient economy, progressing in science and technology, and promoting cultural excellence. A growth rate of 8 percent is targeted annually by the development plan. Nevertheless, the unemployment rate is 12.7 percent, which is considerably high. Poverty on the other hand has decreased from 13.1 percent to 8.1 percent between 2009 and 2013. Significantly, the removal of oil sanctions in 2016 boomed the Iranian economy and reduced the deficit. Still, the global trade relationships and foreign direct investment inflows to Iran are still restrained and preventing the country from progressing more quickly. An article by Mohammad Mostafavi-Dehzooei that was published in The Belfer Center for Science and International Affairs analyzs the economic accomplishments of the current Iranian president, Hassan Rouhani. When president Rouhani was elected in 2013, the Iranian economy was literally deteriorated especially after intensifying the international sanctions in 2011. Rouhani has fulfilled his promises and made some positive shifts to the Iranian economy, while some obstacles remained the same. He could control the inflation that was dramatically increasing during the past thirty years. He also caused the GDP to grow by 7.2% in 2016 due to re-integrating Iran with the world. However, Rouhani’s administration has not shown a real progress toward solving the unemployment problem which is one of the top concerns of the Iranians. The university graduate are increasing but no jobs are offered to them. Arguably, the oil sector demands less labor and more capital, while opening the market for foreign investment and privatization could create more jobs for locals. It is surprising for me to see a country like Iran that was one of the first countries in the world to discover oil in such economic situation. However, I liked the 20 years vision and it reminded me of the 14 year’s vision of Saudi Arabia. Both countries have enormous reserves of oil, and both are realizing how danger it is to depend solely on such unstable revenue resources. I have noticed shared objectives between the two countries like the tendency of diversifying the economy, empowering the private sector, and encouraging the foreign direct investment. Market liberals in Iran and those who care would encourage Iran to open its doors for foreigner investors and to build strong ties with the global banks; especially after removing the international sanctions from Tehran. The successfulness of the Iranian government to finally reach to a nuclear deal with the P5+1 could be regarded to the existence of some political liberalists who see the necessity to strengthening their state and know that could not be accomplished while having a deteriorating economy. Iraq also has large amounts of oil which allowed it to dominate the economy for decades. However, according to the Central Intelligence Agency, oil is also a major cause of conflict between the Iraqi Government and autonomous Kurdistan Regional Government (KRG) in Iraq’s Kurdistan region. The internal disagreement disabled many improvements plans from the two sides as the foreign energy companies hesitate to sign contracts with any of the two governments, and if they did, they tend to leave shortly after they discover the unpleasant work environment. Moreover, Foreign direct investment is believed to be among the Iraqi government objectives, however, many obstacles Impede achieving such goal such as the weak political system, corruption, and the lack of security and societal stability. Obviously, Iraq is a member of the organization of Petroleum Exporting Countries (OPEC) as one of the largest oil reserves in the world. However, looking at its poverty level would not give such indication, I think during Saddam’s era things were better economically and politically, however his tyranny destroyed the country. Nowadays, ISIS is a new actor that is seeking control over everything including oil. When trying to consider what is causing Iraq to be in such situation, I could not find any other answer that is more convincing than oil. Oil curse has an existence in Iraq with an additional dimension, it is triggering the greed of others like ISIS now and the U.S before them. I think without oil, Iraq might have been better off. According to The World Bank Organization, the global oil price shock, and the rise of ISIS are two major events that have impeded the economy in Iraq starting from 2014. Many economic consequences emerged in the same year, such us the minimized governmental spending, especially on investment projects. Approximate contraction of 8.8% happened to the non-oil sector in that year while oil continued to show a notable rise produced by the southern oil fields that were far from ISIS hands. Moreover, with the increased political instability emerged the necessity to increase security-related expenditure which worsen the situation and added up to the fiscal deficit. Poverty doubled and is estimated to have reached 41.2% as a direct result. The next few years are expected to show more positive economic trends only under two conditions, if ISIS continued to lose power and control, and if the global oil prices recovered.

Finally, Egypt is another Middle Eastern country that enjoys a big importance due to several factors. The page from the world fact-book from the Central Intelligence Agency website about Egypt suggests that Egypt has become an important world transportation center after the establishment of the Suez Canal in 1869. A strong correlation exists between Egypt population and economy, the Egyptian population is estimated to be more than 94 million, and with such high population, high possibility of economic crises arose. Population density is skyrocketing in Egypt since only 5% of the land is fertile, so people are concentrated in the narrow area along the Nile River wile vast areas of the country remain uninhabited. The limited natural resources are being exhausted by the increasing population, and issues about unemployment, housing, health care, and education exists. The per capital GDP is $12,100, agriculture counts only for 11.3% of the GDP, while industry counts for 35.8% and the remaining percentage is generated by other services. Cotton and rice are in the top exports in terms of agriculture, while tourism and textiles dominate the industrial part. Nonetheless, the unemployment is at 13.1% according to 2016 estimations. Things have become worse off after the 2011 events of the so called Arab spring that overthrown the previous government in the country. The government should intervene to find the proper solution to the problem with the less possible costs. Another fact that triggered my attention is the recent tendency of Saudi Arabia to finish many Egyptian workers’ contracts in Saudi especially after the instability of oil prices. Egyptian migrants in the Gulf countries are benefiting financially, but they are being attacked recently by the changing policies and the unstable economy of Saudi Arabia. For instance, Saudization policies are minimizing the numbers of Egyptian workers in the Saudi which would leave hundreds of thousands of Egyptians who were used to send remittance to their families back home with no job. How Sisi Could Wreck the Egyptian Economy is an article by Ari Heistein Mor Buskila compares the current government’s efforts with the previous government, and it shows that there is a general downtrend in the economy under president Abdel Fattah el-Sisi. According to the article, Egypt is facing a partially collapsing economy. Recently, to rescue the Egyptian economy, president Abdel Fattah el-Sisi has signed an agreement for a $12 billion loan from the International Monetary Fund. Fuel and food subsided is a significant tool that allow poor Egyptian citizens to afford life necessities. However, the government started reducing these subsidies day after another, which increased the public rage consequentially. Moreover, privatization is present only on promises, no effort is seen on ground. The Egyptian Armed Forces (EAF), which control about one-third of the Egyptian economy, are more concerned about controlling the economy and increasing the governmental projects. In Mubarak’s era, the role of EAFs was minimized, but it regained power after he was overthrown. Furthermore, in late 2016, the Egyptian Pound (EGP) faced devaluation caused by the military’s strategist. This effort was justified by making Egypt less costly to attract tourist and foreigner investors. However, there are no tangible results mainly because of the continuing political instability in the country. In whole, the Egyptian economy is worse off under the current government that prioritizes the EAF and shows no efficiency in dealing with the country’s economic struggles. I don’t think that the Arab Spring has brought any positive change to Egypt. The economy has collapsed, the Islamists gained more power, and the terrorist attacks increased. The fact that people should wait decades after their revolutions succeed to see tangible positive result is the only thing that gives hope in this situation.

The targeted economic developments are what ties all the above countries together. All these countries are promising to offer freer markets, and encourage privatization. Although both ideas have positive and negative sides, the positive side worth the change in my opinion. Dubai has started the initiative and it is way more developed than other cities that have the same financial abilities. The problem in the Middle East is not the lack of resources, it is the lack of efficiency in managing these resources to generate the maximum possible benefit for the people. Another common tendency we could see, is reducing the subsides in food, and energy for example, as this has happened in Egypt, Saudi Arabia, UAE, and Yemen. Instead of removing the subsidies, the authorities should consider privatization that would save large amounts of money as a logical result, because private companies are known to be more conscious about their expenditures and willing to use less foreign labor, and sometimes they are required by the government to have a specified number of local workers, which could help with the unemployment problem. Although privatization could harm some segments like the foreign labors in the GCC countries, there is a common Arabic proverb that says, “the calamities of some people, to others are blessings”. Egyptians, Yemenis, and many other Arab nationals who work in Saudi Arabia for example are facing layoffs due to many factors like privatization and the need to diversify the economy as a respond to the fluctuation of oil prices. The oil producing countries like Saudi Arabia have a larger share of employment in the oil and gas area which means having many affected employees because they are minimizing their drilling activities as a response to the declining prices and demand. Many foreign workers who were used to send remittances to their families back home are no left with no job, and their number could increase soon.

I think the event of the Arab spring were caused by the deteriorating economy and vice versa. This argument could be supported by the fact that the wealthiest countries like Saudi Arabia had not had large-scale protests. When most people are in a satisfactory economic conditions, political reforms and democracy tend to attract their attention less than those who have nothing. It is hard to argue that countries that encountered a revolution that changes the government are better or worse off. Although some incidents suggest that the dark side is greater, the good results could take hundreds of years to be attained, as the example with the famous French revolution. For instance, the Egyptian revolution gave voice to the Islamists, hampered the economy, and created many internal conflicts. However, the people should not give up their dreams and ambitions, instead they should continue asking for the initial demands that they had lost many souls for. The biggest waste is to stop in the middle of the way.

This project allowed me to examine the economy of the MENA region closely. I have gained a deep understanding of the importance of privatization and how it differs from the governmental monopoly and its bureaucrats. Some Middle Eastern countries like Egypt and Iran had experienced the idea of nationalization, and whether such practice left them better or worse of is a highly debatable question. I also admire the fact that although the so called Arab spring has not entered each and every country of the region, it has significant impact on many governments, as it encouraged them to offer development plans to absorb the potential public anger. Furthermore, it would be interesting if we could see the GCC countries finally implementing the common currency that was on the discussion table since 1982. According to On a Common Currency for the GCC Countries article by Esteban Jadresic, the common currency could bring many benefits to the members; for instance, it might make the GCC as one economic block that has its weight in the face of global economic blocs such as the European Union. It would also facilitate the movements of the people, and the circulation of goods between the countries due to the elimination of customs barriers and the encouraged intra-trade and tourism, a thing that is largely supported by market liberals in the region. On the other hand, a common currency requires giving up the country’s economic independence and make them more susceptible to shared hazards. The positive side of the unified currency seems bigger than the negative side. However, the current conflict between Qatar and the KSA, UAE, and Bahrain does not bode well.

Blog #8: Yemen’s background and Economy

YEMEN FACT BOOK

This page from the world fact-book from The Central Intelligence Agency website is about Yemen. It provides all the basic information about Yemen such us its population, geography, and economy, and so on. The fact-book also includes a brief background about the history of this Middle Eastern country.

North and South Yemen were two separate countries that were not unified until 1990. However, the new Republic of Yemen encountered many secessionist movements since its establishment; and conflict existed between the government and the Huthis, a Zaydi Shia Muslim minority in the northwest. Inspired by other revolutions in the Middle East, the Yemenis decided to have their own revolution in protest of common problems like high unemployment, poor economic conditions, and corruption. As the conflict escalated and violence started to appear, the Gulf Cooperation Council (GCC) requested president Saleh to step down and he found himself forced to consent although he refused at the beginning. Abdrabbuh Mansur Hadi,vice president, got the control after Saleh. Due to their continued grievances, the Huthis were no happy with the new government, so they revolted against the government that asked help from the neighboring Saudi government. A coalition of Arab militaries was assembled by the request of Saudi Arabia and began airstrikes against the Huthis. Many peace talks led by the UN has failed to resume peace, and the conflict is still going.

According to 2016 estimates, the population of Yemen is 27,392,779. Out of the 99.1% Muslim population 65% are Sunni while 35% are Shia. With the raise of conflict in 2011, problems in segments like sanitation and improved drinking water sources has intensified especially among the rural population that is initially higher that the urban population. In terms of economy, Yemen is a low-income country, and the current conflict has worsen its economic situation. The GDP PPP is at $31.33 billion, while the per capital GDP is at $2,500 according to 2016 estimates. Agriculture accounts for 23.6% of the GDP and the products include grain, fruits, vegetables, qat, coffee, cotton; dairy products, and livestock. Industry on the other hand accounts for 8.9% and the industries include crude oil production and petroleum refining, cotton textiles. The remaining services 67.5% is generated from the services sector. The Yemen’s exports were halted by the ongoing war. Inflation has accelerated and many damages occurred to the infrastructure. Currently, Yemen is in a real crisis in terms of deteriorating economy and declining water sources and food scarcity.

 

Yemen’s Economic Outlook- Spring 2016

This outlook from The World Bank is based of latest MENA Economic Monitor Report on Yemen in Spring 2016. It is providing information about the GDP, the poverty rates, and an explanations of the economic obstacles the country is undergoing. It is also suggesting improvements on the political and security fronts as the only way to rescue the country from its current catastrophe.
The GDP of Yemen has contracted by approximately 28 % in 2015. The war has disrupted the economic activities and destroyed the infrastructure. The Central Bank of Yemen (CBY) faced a lot of pressures during the last few years, and is stopped many of its support activities. Currently, Yemen has a poverty rate in the Middle East, and about 37.3 % of the population living below the poverty line of $2 a day. Malnutrition is also a sever problem in Yemen and its has one of the worst rates in the world. During the war years, thousands were killed and millions were forced to flee the war zones, 2.5 million people are internally displaced according to 2015 estimates. The deteriorating sanitation and the unimproved water sources raised the incidences of sever epidemics like diarrhea and cholera. Humanitarian assistance is needed at all scales to help rebuilding the country and saving the survivors.

Reflection:

Yemen was initially a poor country, however, it looks like it became in a real catastrophe after the war. Thousands of civilians are dying from Cholera and no one seems to care. When the revolution started in 2011, it surely has legitimate demands, unfortunately, the revolution has shifted to something that I personally have not expected. Just like in any other war, civilians are the biggest loser, and there safety is neglected by the fighting parties. I always wondered way Yemen is not among the GCC, but know I can conclude that its modest economy could not allow it to have such privilege. Saudi Arabia by leading the war against the Huthis in Yemen seems to have two major justifications. First, political realists are concerned about national security, the southern part of Saudi Arabia has shared borders with Yemen and the conflict could extend to the kingdom. Second, as Huthis are Shia, the concern has doubled and the Saudi government in no condition could allow the Huthis to take control of Yemen as long as they could prevent that from happening. Concerns about influencing the Iranian presence in the region exist with the idea of allowing Huthis to control the country or gain more power. Just like the proxy war in Syria, I think the war in Yemen has a sectarian sense although saving the legitimacy of the Yemen government is the declared cause.

 

Blog #7: Economy of Iran

The World Bank In Islamic Republic of Iran

This page from The World Bank Organization talks about Iran’s economy. It was published in Apr 01, 2017, and It provides basic information about the country like the GDP, the unemployment rate, and the poverty rate. The page also introduced the development plan that has a significant reflection on the Iranian economy.
Iran has the second largest population in the MENA region, and with a Gross Domestic Product (GDP) of US$412.2 billion, Iran is considered the second largest economy in the region. The Iranian economy is dependent on agriculture, services sector, manufacturing, and the hydrocarbon sector. Must noticeably, Iran has very large reserves of crude oil and natural gas; and the economic activity and government revenues are heavily dependent on oil revenues as a result. 20-year national vision, development plan, has been adopted by the government in 2004. The vision includes market-based reforms and consists of three main objectives; developing a resilient economy, progressing in science and technology, and promoting cultural excellence. A growth rate of 8 percent is targeted annually by the development plan. Nevertheless, the unemployment rate is 12.7 percent, which is considerably high. Poverty on the other hand has decreased from 13.1 percent to 8.1 percent between 2009 and 2013. Significantly, the removal of oil sanctions in 2016 boomed the Iranian economy and reduced the deficit. Still, the global trade relationships and foreign direct investment inflows to Iran are still restrained and preventing the country from progressing more quickly.

 

Iran’s economy under Rouhani: achievements and obstacles

This article by Mohammad Mostafavi-Dehzooei was published in The Belfer Center for Science and International Affairs in May 17, 2017. The author is basically analyzing the economic accomplishments of president Hassan Rouhani. The article explains the positive and negative outcomes of Rouhani’s presidency, and it was published two days before the presidential elections in May 19, 2017, which Rouhani’s won obviously.

When president Rouhani was elected in 2013, the Iranian economy was literally deteriorated especially after intensifying the international sanctions in 2011. Rouhani has fulfilled his promises and made some positive shifts to the Iranian economy, while some obstacles remained the same. He could control the inflation that was dramatically increasing during the past thirty years. He also caused the GDP to grow by 7.2% in 2016 due to re-integrating Iran with the world. However, Rouhani’s administration has not shown a real progress toward solving the unemployment problem which is one of the top concerns of the Iranians. The university graduate are increasing but no jobs are there to be offered for them. Notably, the oil sector demands less labor and more capital, while opening the market for foreign investment and privatization could create more jobs.

Reflection:

I liked reading about the Iranian economy and I found It weird to see a country like Iran that was one of the first countries in the world to discover oil in such economic crisis. This country seems to have a long history of struggle from the nationalization of the Iranian oil by president Mosaddegh, until the implementation of the economic sanctions on Iran. However, the authorities recently realized that the survival of the country is dependent on holding the economy from collapsing. I liked the 20 years vision and it reminded my of the 14 year’s vision of Saudi Arabia. Both countries have enormous reserves of oil, and both are realizing how danger it is to depend solely on such unstable revenue resources. I have noticed shared objectives between the two countries like the tendency of diversifying the economy, empowering the private sector, and encouraging the foreign direct investment. Market liberals in Iran and those who care would encourage Iran to open its doors for foreigner investors and to build strong ties with the global banks; especially after removing the international sanctions from Tehran. The successfulness of the Iranian government to finally reach to a nuclear deal with the P5+1 could be regarded to the existence of some political liberalists who see the necessity to strengthening there state and know that could not be accomplished while having a deteriorating economy.

 

Bolg #6: UAE’s Economy and Dubai’s uniqueness

United Arab Emirates

This is the UAE profile from the famous Forbes website. It gives an overview about the economy of this gulf state. It also provides numbers and rankings about the country such is its GDP, inflation rate, unemployment rate, and so on. It also explains what efforts were taken by the government in respond to the recent oil prices shock.


Summary:
According to Forbes lists, the United Arab Emirates is ranked number 33 in the Best Countries for Business List. As of December 2016, UAE GDP is $370 B; and it has a notable growth rate of 4%. While the UAE population is 5.9 million, it only has 2.4% unemployment rate. Its open economy allowed the per capital income to reach as high as $40,400.Initially, UAE was a poor country consisting predominantly of desert principalities. However, since the discovery of oil more than thirty yeas ago, the country has developed dramatically. Most significantly, 100% foreign ownership and zero taxes are allowed in the country’s free trade zones. Regarding to the recent economic situation, and in respond to the recent instability of oil prices, the government has taken many successful steps in order to get over the crisis.For instance, there has been well done job in diversifying the economy recently; which reduced the based oil and gas GDP’s portion to 25%. Furthermore, the government is investing more in the banking sector in order to boost it and generate more liquidity. Dubai was hit very harshly by the crisis and there was a huge doubt whither it is going to overcome the problem or not due to the drastic decline of real estate prices. However, with the help of Abu Dhabi Government and the UAE Central Bank, the city recovered with the least possible costs. On the other hand, the country has also reduced social spending such as minimizing fuel subsidies. Nonetheless, creating more jobs, improving the private sector, and enhancing economic diversification all have been promised by the government.


Reflection:

I think the UAE should be a role model for the neighboring Gulf and Arab states at large. The UAE has a successful story that most be honored, especially when we talk about Dubai and how it evolved dramatically. It is interesting to see a city in the middle of the Arabian peninsula becoming a global tourism destination that attracts millions of tourists annually. I see there is a two way equation, the successfulness of Dubai is tied to the central UAE government and vise versa. The luxurious life that is enjoyed by the residents of the UAE is dreamed by many, even in rich oil states like Saudi Arabia. I know many Saudis who moved to live in Dubai or its neighboring cities like Sharjah, and the numbers are expected to increase. In response to that, the Saudi government should carefully examine what makes Dubai so attractive, and try to follow its model in order to restrain the youths from leaving the country. We might see some improvement in the coming years as promised by vision 2030, could we see another Dubai in Saudi, this is the question.

Dubai Economy

This page by Dubai government offers data about the socio-economic indicators of Dubai. It provides explanation of the attributes of dubai that makes it an excellent investment location. The page also goes in details about Dubai’s key advantages like having a stable politics and economy for example.


Summary:
Three decades ago, Dubai was nothing like how it it today. The rapid development it encountered made it a business center today. Dubai has a strategic location which makes it the biggest re-exporting center in the Middle East. Many foreign investors are attracted to Dubai due to the liberal government policies, and the excellent infrastructure it has. Many attributes distinguish Dubai from other major cities in the region. Dubai is rank as the Arabian Gulf’s leading multi-purpose business center. It has a dynamic economy and it is an important re-export center. Warm welcoming is offered by the government to new businesses and investment. Moreover, it showed positive trends in economic diversification over the past few years. Dubai is also a thrilling tourism destination. All these facts make Dubai the first international business center in the Arabian Gulf. The competitive cost structure in Dubai triggers the attention of many international companies. For example, there are no controls over foreign exchange and no trade barriers or quotas. Residents of Dubai enjoy many advantages regarding the high quality of life. The private sector in Dubai has improved many real estates such is hotels and recreational 
and leisure facilities dramatically over the past few decades. All these factors made Dubia a unique city in the heart of the Arabian peninsula.

Reflection:

I think the UAE gained its popularity after the development of Dubai. Mohammed bin Rashid Al Maktoum, the governor of Dubai, is very ambitious man who is realy unique, and he is admired for his continues effort to enhance the city and they country consequentially. I noticed many things beyond expectations in Dubai. for example, the police where driving Lamborghinis, BMWs and Mercedes. That gives an indication of how financially satisfied the country is, although I think it is an exaggeration because their are some sectors worth more investment than police cars. Whenever I tell anybody here that I am from the Gulf, they immediately think I am from Dubai, that has the tallest skyscraper in the world and the most luxurious hotels. I even learned from those foreigners about few places and facts about Dubai that I have not known before, and I always have to shock these curious people about the difference between Saudi Arabia and Dubai. Dubai is gaining the biggest attention, not to say that other parts of the UAE are disappointing, indeed, I have like the city of Sharjah more due to the fact that it is more quiet while beautiful and interesting. In terms of the economy, the UAE has exceeded neighboring countries with it free market and it looks like they will have to follow its steps to survive in the coming days.

 

Blog #5: Egypt’s past and present

Egypt Fact-book

This page from the world fact-book from the Central Intelligence Agency website is about Egypt. It covers all the basic parts about Egypt such us its population, geography, and economy, and so on. The fact-book also includes a brief background about the history of this North African country.


Summary:
Egypt is largely known for its great civilizations, many great dynasties ruled Egypt along the recorded history. Persians, Greeks, Romans and Byzantines, all have lived in Egypt once upon the time. With the emergence of Islam in the 7th century, Arabs introduced the language and the religion to the country, and continued to rule it for the next six centuries. In 1517, Egypt became under the Ottoman empire control until the control was taken by the British later on; and It was not until 1952 when Egypt acquired its full sovereignty. Egypt has became an important world transportation center after the establishment of the Suez Canal, a sea link between Indian Ocean and Mediterranean Sea opened in 1869.

The Egyptian population is estimated to be more than 94 million, and with such high population, high possibility of economic crises arose. Population density is skyrocketing in Egypt due to the fact that only 5% of the land is fertile, so people are concentrated in the narrow area along the Nile River wile vast areas of the country remain uninhabited. The limited natural resources are being exhausted by the increasing population, and issues about unemployment, housing, health care, and education exists. 

The per capital GDP is $12,100, agriculture counts only for 11.3% of the GDP, while industry counts for 35.8% and the remaining percentage is generated by other services. Cotton and rice are in the top exports in terms of agriculture, while tourism and textiles dominate the industrial part. Nonetheless, the unemployment is at 13.1% according to 2016 estimations. Things have became worse off after the 2011 events of the so called Arab spring that overthrown the previous government in the country.

Reflection:
Overpopulation and consequently deteriorating economy seems the two major problems facing Egypt today. Solving the overpopulation problem requires social understanding at the first stage. However, as Arabs, we like having big families and we consider children as pleasures that are highly valued. It looks like we have a problem of quantity over quality, but it is hard to convince the people who have a certain ideology to change it do to economic or ecological factors. The government should intervene to find the proper solution to the problem with the less possible costs. Another fact that triggered my attention is the recent tendency of Saudi Arabia to finish many Egyptian workers contracts in Saudi especially after the instability of oil price. Egyptian migrants in the Gulf countries are benefiting financially, but they are being attacked recently by the changing policies and the unstable economy of Saudi Arabia. For instance, Saudization policies are minimizing the numbers of Egyptian workers in the Saudi which would leave hundreds of thousands Egyptians who were used to send remittance to their families back home with to job. The current Egyptian government seems begging for the satisfaction of some Gulf countries, and I can not understand that far from financial profits. For instance, The debate on the two islands, Tiran and Sanafir, is ongoing and it is exciting to see where things are heading.

 

How Sisi Could Wreck the Egyptian Economy

This article by Ari Heistein Mor Buskila was published in May 4, 2017 by the national interest organization. The article discusses the current trends of the Egyptian economy. It compares the current government’s efforts with the previous government, and it shows that there is a general downtrend in the economy under president Abdel Fattah el-Sisi.

Summary:
Egypt is facing a partially collapsing economy, and the current government is responsible of implementing strategies that could stop this collapse. Recently, in order to rescue the Egyptian economy, president Abdel Fattah el-Sisi has signed and agreement for a $12 billion loan from the International Monetary Fund. Fuel and food subsided is a significant tool that allow poor Egyptian citizens to afford life necessities. However, the government started reducing these subsidies day after another, which increased the public rage consequentially. More over, privatization is present only on promises, no effort is seen on ground. The Egyptian Armed Forces (EAF), which control about one-third of the Egyptian economy, are more concerned about controlling the economy and increasing the governmental projects. In Mubarak’s era, the role of EAFs was minimized, but it regained power after he was thrown. Furthermore, in late 2016, the Egyptian Pound (EGP) faced devaluation caused by the military’s strategist. This effort was justified by making Egypt less costly in order to attract tourist and foreigner investors. However, there are no tangible results mainly because of the continuing political instability in the country. In whole, the Egyptian economy is worse off under the current government that prioritizes the EAF and shows no efficiency in dealing with the countries economic struggles.

Reflection:

I don’t think that the Arab Spring has brought any positive change to Egypt in particular. The economy has collapsed, the Islamists gained more power, and the terrorist attacks increased. The fact that people have to wait decades after their revolutions succeed to see tangible positive result is the only thing that gives hope in this situation. The new president seems only concerning about strengthening his ties with the Gulf monarchs, even if it caused him to sell them some lands. I think the Egyptians will not continue to be patient with him, especially after they were able to overthrow two presidents in fairly short time. The Egyptian people has a high sense of humorous and smartness as I could concluded from knowing some of the Egyptian doctors and labors who works in Saudi Arabia. Unfortunately, they might face layoffs do to the new Saudization policies which would worsen their situations and the whole Egyptian economy. I hope things could get better, because everyone deserves having a decent life that fits his effort and ambition.

 

Blog #4: Qatar’s Past and Present

History Of Qatar

This is a brief timeline about Qatar published by Qatar Census official website. It is very helpful to understand the history of this small peninsula since the 4th century until today. It talks about the early inhabitants of that land and the possible origins of is name, Qatar. It also talks about the Ottomans control, the British mandate, and the independence later on. It ends with talking about the discovery of oil that dramatically changed the country toward the better.

 

The western expeditions suggested that the early habitation of Qatar happened in the 4th century BC. The seafaring Canaanites are believed to be the original inhabitants of Qatar as suggested by Herodotus, the Greek historian, in the 5th century BC. Lead by Alexander the Great, the Greeks came to the Gulf and operated many of its ports to their financial benefits. The name Qatar has many origins and stories behind it, “Catharrei” for example, was a name given by Pliny the Elder, a Roman writer, to the people of that area. Also, “qatara” was a name used by Ptolemy, the famous Greek geographer to refer to the same area later on. During the Islamic era of the 7th century AD, Qatar peninsula was under the rule of king, al-Munzir Ibn Sawi al Tamimi; and the Islamic civilization flourished in the area since then. Especially in the 8th century AH under the Abbasid state, Qatar’s economy saw notable growth and prosperity. Later on during the 10 century AH, an alliance took place between the Qataris and the Turks in aim to expel the Portuguese from the region. The Turks later on took control of the entire Arabian Gulf region including Qatar. However, local Arab tribes were holding most of the real ruling process as the Ottoman sovereignty was minimal. In the contemporary era, starting with the 18th century, Al-Thani family took over Qatar, and they Sheikhs of the family were ruling the country one after the other. By the end of the First World War, the Turkish rule in Qatar ended as well. However, the foreign influence in the country did not Stopped there because the government signed a protection treaty with Britain in 1916, who started the exploration for oil later on. When oil was discovered, it opened new horizons to the country, brought it closer to modernization, and boomed the economy as whole. In late 1971, independence was granted to Qatar, and Al-Thani family continued to rule the country generation after another.

 

Reflection:

I liked the information provided about the history of Qatar and who inherited it. Since ever, people where moving to places where they could find wealth and profits. Knowing this fact allows me to understand one significant cause of some contemporary wars and conflicts. Without a fair trade off, people will not leave their countries or hazard their lives. Just like in many other Arab countries, especially the Gulf states, the ruling is hereditary, few families took over the governance one generation after another. Such thing reminds me of our discussions about democracy the lack of preparedness and the inability of some nations to adopt it. However, this equation might change in the near future, especially when the people come to realize the consequences of submitting to governments that support terrorism or encourage violence, as the case with Qatar.

 

This is the real story behind the economic crisis unfolding in Qatar

This article from the Independence was written and published yesterday, June ninth 2017, by Robert Fisk about the current crisis between Qatar and some neighboring Gulf states. It suggests some possible causes of the crises like Qatar’s continues support of terrorism. It also explains what makes other countries like Egypt and the Maldives interfere and declarer the hostility towards Qatar as well.


The article is suggesting that the current crisis in Qatar is caused by two main reasons, the permanent subordinate of Arab states to the west, and the fading Sunni Muslim’s unity. The author is mocking how most Gulf states are turning their faces against Qatar, their neighboring country that have had many strategic alliance and mutual benefits with them instead of uniting to encounter Iran, the Shia country, as was always expected.Apparently Bin Laden and most of the contemporary terrorist especially those who conducted 9/11 attacks were Saudis not Qataris. However, Qatar’s al-Jazeera channel was constantly offering hours of free airtime for Bin Laden and to al-Qaeda/Jabhat al-Nusrah later on. The rage on Qatar is not limited to the Gulf countries, since other countries like the Maldives have also broken relations with Qatar. A step that could not be understood but by the money language, The Maldives is expecting a Saudi five-year loan facility of $300m and many other investment and benefits. However, a large number of ISIS fighters were also exported from the Maldives previously. So is the case with Egypt that offered its support to the Saudi deterrent campaign against Qatar, Egypt wont do so with no 
financial rewards however. An important fact to mention is that a massive US military air base exists in Qatar. Which is believed to be a guard shield for Qatar against any possible invasion of the neighboring countries, as Sheikh Hamad, the previous emir thinks. Although Saudi, Bahrain, and the U.A.E all declared their anger of Qatar, Kuwait and Oman are still acting as peace makers in the Gulf. The ties of the Qatari regime to Iran and Syria is the main cause that made its neighbors mad.

 

Reflection:

It is fascinating to see how things could change over one night. I have no doubt that Qatar was and still subsidizing terrorists at least through its TV channels that constantly were trying to spark the flame of sectarianism. Qatar seems to care only about its strategic benefits without considering any morals or other considerations. This is not the first time that the Saudi government expresses its anger from the Qatari government conduct, as their was tension in 2014 as well but it was settled at that time. However, I wonder what caused the anger to reappear again only shortly after the visit of president Trump to the 2017 Arab-Islamic summit in Riyadh. If Trump gave the green light to the Arabs to turn their faces against Qatar, how could Qatar use the existence of the U.S base on its land as a mean of protection and be confident about it? This is a question that could or could not be answered in the coming days. However, I hope peace could overcomes anger that no one knows what its consequences are going to be. I admire the effort of the Kuwaiti emir who previously experienced the Iraqi invasion of his country, so he looks like an expert of the undesired consequence of war.