Beyond 2030: Economic growth in the Middle East and North Africa – AEI – American Enterprise Institute: Freedom, Opportunity, Enterprise

25th May 2019 Off By binary
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Key Points

  • Energy-dependent growth in the Middle East and North Africa (MENA) region, whether in traditional oil and gas exports or petrochemical production and global refinery operations, will be sensitive to shifts in Asian economies and new technology and efficiency innovation.
  • Without structural reforms to subsidies and labor markets, a reliance on debt finance now kicks the can down the road toward difficult fiscal choices in the future.
  • MENA economies are becoming more integrated into emerging markets not by increased trade but through state-led development partnerships and the use of aid and economic statecraft.

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Looking forward to 2030 and even 2050, will the economies of the Gulf and the broader Middle East be more or less integrated, productive, and diversified? There are indeed some major shifts underway. In this report, I identify three broad economic trends: (1) continued energy-dependent growth, (2) debt reliance to maintain social and capital expenditure commitments, and (3) regional economic statecraft and financial intervention, which are both a burden and an opportunity for growth.

But the political implications of these trends are less certain. For oil exporters, domestic and foreign commitments will increasingly compete for fiscal expenditure. New investment partnerships and strategic alliances will draw the Gulf states eastward to Asia, as well as to other emerging markets in Africa.

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