The Continuing Evolution of Middle East Economies
A steady expansion of economic integration is taking place across the Middle East and North Africa (MENA) region, giving rise to increasing optimism about the region’s development. Reform-minded leaders have created much-needed investment, development, and trade opportunities by embracing new strategies and structural reforms. As a result, the isolated pockets of prosperity that characterized the old economic landscape are beginning to overlap. A new landscape is emerging, in which the economic fortunes of member countries are linked as never before by strategic cooperation. The benefits of regional integration are clear in five key areas:
Investment: Arab investors are putting more money than ever before into their countries. They are responding to investment opportunities, aided by reforms that provide for more efficient flow of capital, as well as a desire to hedge against uncertain environments in North America and Europe.
People: The number of Arab workers from Egypt, Jordan, Syria, and Lebanon who have moved to the oil-producing GCC countries1 has risen substantially, distributing oil wealth to the Levant and North Africa through remittance flows.
Trade: Private monopolies, high tariffs, and bureaucratic import procedures have been recognized as hindrances to regional trade, and progressive actions have helped cut tariffs, promote private-sector competition, and open doors for further trade opportunities.
Infrastructure: Regional projects in producing and sharing electricity, transporting oil and gas, and developing transportation links play important roles in economic integration.
Communications and Media: The proliferation of broadcast and broadband services has broken down national barriers and helped people in the region feel part of the larger pan-Arab community.
Key Highlights
- Business, political, and social changes throughout the Middle East are creating a favorable climate for economic cooperation between neighboring countries.
- Structural reforms, global perspectives, and a strong united front now are seen as enhancements to the region’s natural resources and as building blocks in a foundation for economic growth.
- Improved governance and accountability are critical to the process of economic integration, as removal of remaining barriers is to the movement of commodities and people.
Article Index
- Executive Summary
- Strengthening Ties in the MENA Region
- Perfect Timing
- Integrated Through Investment
- Exhibit 1 - Regional FDI Has Shown Impressive Growth Over the Last Decade
- Exhibit 2 - Despite Setbacks Caused by the Global Economic Downturn, MENA Stock Exchanges Are Poised to Show Significant Growth
- Integrated Through People
- Exhibit 3 - Arab Workers from North Africa and the Levant Seek Opportunity in the Gulf
- Exhibit 4 - Remittances from the Gulf States Are Spreading Wealth to the Levant and North Africa
- Integrated Through Trade
- Exhibit 5 - The Value of Exports in the MENA Region Is on the Rise
- Exhibit 6 - Popular Tourist Destinations for Arab Travelers Have Sprung Up around the Region
- Integrated Through Infrastructure
- Integrated Through Communications and Media
- Exhibit 7 - There Has Been a Dramatic Increase in Pan-Arab Broadcasting
- A Means to an End
- The Way Forward
Author Profiles
George Atalla is a partner with Booz & Company in Dubai. He specializes in economic policy setting and public-sector modernization.
Hatem Samman is the director of the Booz & Company Ideation Center. He is based in Dubai. As a lead economist, he has written extensively on policy issues across diverse economic sectors.
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