Oasis Economies of the Middle East Countries

"As interest shifts from developing economies of the Asia countries to the frontier economies of African and Middle East countries, Nigeria may have to combine the Chinese and United Arab Emirate growth strategies as it thrives to build it middle class."--Cletus Olebunne.

Today, we see a very different Middle East. The region’s leaders are committed to catching up to, and in many cases surpassing, the rest of the world. Indeed, the tremendous economic vitality of the region is due, in no small part, to visionary individuals in positions of authority who are eager for progress and willing to move quickly. An increasing number of decision makers in top ministerial positions are coming from the private sector; they are often highly educated and motivated to pursue change. In this sense, the region can be likened to a car navigated by a driver who has pulled out of his garage well after his neighbors, but who nonetheless has every intention of going the same distance, and without wasting any time.

The general population has also been affected by globalization. Connected to the rest of the world through both the Internet and the increased ease of travel, Middle East consumers are becoming more and more sophisticated: They want what other parts of the world have. Moreover, they want it within their own cultural norms, and they are asking more from their governments, which are responding. These economic oases also promote the development of power, water, and transportation infrastructure, all of which are key to the development of a middle class.

If citizens of a country don’t see the money from their nation’s natural resources invested, they will wonder how the proceeds are being used. And should the government invest that money unwisely, it will have squandered the country’s wealth.

As the Middle East economy grows and diversifies away from oil, human capital becomes more important. The United Arab Emirates banks and real estate firms are hungry for brainpower; Saudi Arabia’s chemical production sector is growing by the day and needs skilled labor; manufacturing zones across the region need skilled labor as well.

In the end, the emergence of a new regional, diversified economy is a fundamental shift that will affect not just corporate investment, but geopolitical activity as well. The Middle East may be developing a new type of economy, different from any other that has preceded it. It is not patterned on the models of North America and Europe. Instead, if anything, this economy is an attempt to re-create the flourishing, outward-looking Silk Road economy of the Islamic world of the 12th to 14th centuries, when Arab merchants were the world’s economic leaders. This phenomenon is being spurred on by a broad group of decision makers — government officials, bankers, manufacturers, and some outside investors and companies — who are trying to build a bridge between Middle East culture and its economic potential. They understand that if the region is to thrive, it must build its future on a diversified foundation. They realize, as a result, that they must foster the innate entrepreneurial spirit of their people, and create the solid infrastructure needed to compete on a global level and provide a range of middle-class opportunities for people who would otherwise be disenfranchised. If they can manage to create this unique economy, the oasis we see blooming today won’t be a mirage. It will be an attractive, sustainable, fertile valley.

Read complete article as written by Joe Saddi, Karim Sabbagh, Richard Shediac

April 10, 2008