Economic & Social Development:

Lands of Wealth & Poverty

(Review of GRQ’s 1 & 2)

2 Areas of concentration:

Iranian/Arabian sedimentary basin (Saudi Arabia,Iraq, Iran, Oman, PG states)

North African fields (Algeria, Libya, Egypt)

With only 7% of the world’s population this region holds 68% of the world’s proven oil reserves. Saudi Arabia has 21,000,000 residents who live atop 26% of the planet’s known oil supplies!

Nations lacking in petroleum…

Morocco Yemen Israel Jordan Lebanon Turkey

In addition to their large oil reserves, the wealth of many of these nations is compounded by their relatively small populations. GDP per capita is high.

Bahrain’s population: 701,000 Qatar’s population:596,000 Kuwait’s population:2,275,000 UAE’s population: 3,108,000

Much of the oil wealth remains concentrated in the hands of a small “elite”

However, petrodollars (revenue from the sale of petroleum) provide a higher standard of living and other benefits for the rest of the population as well (schools, medical facilities, low-cost housing, modernized agriculture).

Remember – per capita GDP is a representation of each individual’s share of the nation’s wealth…

Bahrain’s per capita GDP:($17,640) Qatar’s per capita GDP($11,600)

Kuwait’s per capita GDP:($20,910)

UAE’s per capita GDP:($17,965)

Richest heads of stateworld's highest per capita GDPPer capit GDP for MENA nations only

Middle East development expo

Israel’s per capita GDP: $27,530 They’ve invested large amounts of

capital in a highly productive ag. And ind. Base;

Global center for high-tech computer & telecommunications products;

Many US & European industrial development & production centers;

Entrepreneurial business culture

Produces varied agricultural & industrial goods for export (cotton, tobacco, wheat, fruit, textiles)

Most important tourism destination in the region

Maintains close ties with the West (like Israel)

Poorer countries in the region have low literacy rates, lack access to modern services & infrastructure)

“Brain Drain” the brightest young people in the poverty stricken nations leave those countries for better jobs in other parts of the world

Yemen is the poorest country in the region (per capita GDP = $1,360) Many work outside their country.

Organization of Petroleum Exporting Countries (www.opec.org) OPEC ensures this region will play a role

in affecting world oil supply and therefore prices…however…it doesn’t have as much clout as it used to. Many oil rich Arab nations are now allowing foreign investment and/or establishing partnerships with foreign corporations increasing the regions integration into the global economy.

SUDAN: civil war resulted in the emergence of S. Sudan as a separate nation; both Sudanese nations have serious, ongoing political instability problems that have created serious poverty for their citizens. There is significant oil near the border & China is an interested customer, but the 2 nations can’t agree on how to split/share the oil.

MOROCCO: still undeveloped & poor in Atlas Mt. Region, but in urban areas economic reform & privatization have led to economic growth. Unfortunately, “BRAIN DRAIN” has hurt their chances for future growth (happens when smart, young people leave the country for better opportunities elsewhere);

EGYPT: had significant economic growth under Pres. Mubarak in the 90’s, however, the gap between rich & poor was huge & a big contributing factor to Mubarak’s overthrow & the Arab Spring revolt of 2011. Egypt is currently under military control & it looks less and less like the democratic reforms that were the basis of their revolution will actually occur.

The highest female illiteracy rates we will see all year are in this region; 57% in Egypt, 55% in Iran, 65% in Morocco; 76% in Yemen.

Lowest percentages of female participation in the labor force as well.

Both these factors can be tied to the presence of extreme Islamic Fundamentalism where a very narrow interpretation of Islamic Law keeps women from pursuing education & employment.

POSITIVES: OPEC ensures a place for the region in the global economy. Turkey has close ties to the EU, but is not a full member. Others who favor closer ties with the EU & the global economy say that it will bring more export-oriented business into the region.

NEGATIVES: critics of globalization fear that closer ties with the EU & more global trade may lead to Western dominance and/or an increase in western culture in the region…which they do not want!

Tourism links the region to the global economy;

Tourism magnets include ancient historical sites & globally significant religious localities. Also, beaches & climate draw tourists as well.

Resort hotels, which once were lacking, are now growing in response to tourism demand.

Tourism brings in big dollars to the region & is expected to grow as a % of the overall regional economy throughout the 21st century. It is threatened, however, by regional political unrest & instability.

Also – Tourism has produced a local underclass of poorly paid service workers & is widening the gap between the wealthy & the poor.

Kuwait The big picture