Although the Middle East is experiencing a fundamental tension between the aims of the leaders to incorporate their nations into the international economy, there are concrete and substantial extents of integration that have been supported by foreign direct investment, market expansion, incorporation into global markets, and competitiveness. Consequently, the non-democratic countries in the region have constantly fallen behind in development indices. Oil proceeds have enabled nations in the Middle East to venture greatly into infrastructural projects that develop a solid foundation for the establishment of a more diversified financial system (Wright et al. 287-290).
Nevertheless, the recent decrease in the prices of oil may impede imminent investment and growth, although lasting viewpoints remain positive with respect to oil and non-oil advancement. Despite the existing impediments, the development of the Middle East has risen tremendously after the 2008-2009 economic crisis, and this has been driven mainly by development in the Gulf Cooperation Council countries such as Qatar, Bahrain, Saudi Arabia, Oman, Kuwait, and the United Arab Emirates.
There are generally aboriginal and exogenous aspects accountable for the restricted nature of economic internationalization within the Middle East. Though a wide pool of studies has shown the external aspects eliciting investment across the globe to be apprehensive about the position of the countries, the internal impediments to globalization have been highly unexplored. Nevertheless, some researchers analyze the internal obstacles and assert that the occurrence of the authoritarian progressions and political formations in the Middle East considerably weaken prospects for great extents of global economic incorporation (Cammett 23-25).
Such internal impediments to globalization go to the core of the political nature of the dictatorial regimes in the region. Research on globalization in the Middle East has usually associated the region’s comparatively low rates of international economic incorporation with the combination of numerous aspects. These include inadequately developed marketplaces, an underdeveloped or destitute local workforce, insufficient and inaccessible information expertise, and moralizing or self-protective responses by leaders to the identified socio-cultural as well as political hazards of development. In an actual sense, every one of such causes may and usually does act as an impediment to high levels of development in the Middle East.
Dictatorial ruling practices seek to hold up continually the possibility of increased integration into the international economy. Though the particular dynamics of such practices usually differ, in broad expressions, they consist of stipulations where the country caters to the demands of politically pertinent social groups to achieve their supremacy in spite of unaccountability and improper representation.
Apart from diverse political outcomes, there are some primary, and interconnected, economic fallouts emanating from dictatorial ruling practices (Snider 664-665). These include etatism and economic nationalism, which both act as impediments to enhanced incorporation into the international market. Etatism denotes complete control of the government over the residents. Economic nationalism signifies the principles that support national interventionism in the market with strategies that underscore internal control, capital structure, and labor, even when it calls for the infliction of tariffs as well as other limitations.
Directly linked to the political system of authoritarianism are national trade strategies. Steered by the sense of dictatorship, the trade approaches in the Middle East have been greatly centered on explicit forms of commercial incorporation that are mainly quite narrow in scope. More significantly, they do not easily foster a deepening of the local market or the generation of further business connections across the globe.
In this regard, rather than acting as the major driver of facilitated economic contribution internationally, global trade policies have been practiced by the majority of nations in the Middle East in a manner that has impeded the incorporation of the financial systems into the world markets. A different major aspect of the economy of the Middle East is the greatly invasive and fiscally noteworthy semiformal segment (Ciftci and Tezcür 374-376).
Nonetheless, the same semiformal segment has an equivalent or higher control in the sections of the developing nations that enjoy more enhanced extents of globalization when judged against the Middle East. Without the existence of other factors, economic semi formality does not function as a determinant of the rate of international integration but turns out to be a vital component when placed in the perspective of the political economies of the Middle East.
Regardless of the existing impediments, the Middle East has many opportunities that can be exploited to facilitate development. It is apparent that the Middle East has countries with different abilities and degrees of performance (Chomsky et al. 45-47). The gross national revenue per person can vary from approximately 4000 US dollars to $8300 in Lebanon, and the Kingdom of Saudi Arabia categorized as higher middle income by the World Bank.
Moreover, there is a gross national income per capita of about 1,500 US dollars in lower-middle-income nations such as Iran and numerous high-income states, with the most notable being Israel (16000 dollars) and Bahrain (10,500 dollars). On the same note, there are concomitant deviations in the population (which ranges from over 695,000 in Bahrain to about 66 million in Iran), national revenues, gross domestic products, and yearly increase, and the accessibility of expertise and infrastructure.
The United Arab Emirates, Bahrain, Kuwait, Oman, the Kingdom of Saudi Arabia, and Qatar are increasingly acclimatizing to a new economic reality. Oil prices have nearly halved from mid-2014, and though this has been greatly disruptive for nations that have been dependent on petroleum products, it is generating opportunities. The countries are collaborating to execute extensive economic transformations to ensure the creation of diversified economies that will draw foreign investors and companies (Smith 63-65). Countries in the Middle East are continually diversifying their economies to eliminate overdependence on oil.
For instance, 60 percent of the gross domestic product in Kuwait is obtained from oil exports, whereas the United Arab Emirates generates just 30%. Similar to other Gulf Cooperation Council countries, the United Arab Emirates’ diversification has moved the focus from the public to nonpublic sectors. This has resulted in the introduction of directives aligned to international best practice that is generating opportunities for businesses seeking to venture in the Middle East. Following a period of changeover when the Middle East streamlines its inefficient economic model from 2020, the region will become stronger with diversified, effective economies, which will attract investors and novel inclinations hence influencing an international shift towards the Mideast.
Though the Middle East is experiencing impediments caused by poor leadership, there are substantial extents of integration that have been supported by market development, incorporation into global markets, and competitiveness. Revenue from oil has enabled nations in the Middle East to embark on infrastructural projects that build up a solid basis for the establishment of a more diversified financial system. The decline in the prices of oil may hinder impending investment and growth through situations remain positive as regards oil and non-oil advancement.
Works Cited
Cammett, Melani. A Political Economy of the Middle East. Routledge, 2018.
Chomsky, Noam, et al. Perilous Power: The Middle East and US Foreign Policy Dialogues on Terror, Democracy, War, and Justice. Routledge, 2015.
Ciftci, Sabri, and Güneş Tezcür. “Soft Power, Religion, and Anti-Americanism in the Middle East.” Foreign Policy Analysis, vol. 12, no. 3, 2016, pp. 374-394.
Smith, Dan. The State of the Middle East: An Atlas of Conflict and Resolution. Routledge, 2014.
Snider, Erin. “International Political Economy and the New Middle East.” PS: Political Science & Politics, vol. 50, no. 3, 2017, pp. 664-667.
Wright, Joseph, et al. “Oil and Autocratic Regime Survival.” British Journal of Political Science, vol. 45, no. 2, 2015, pp. 287-306.