By Fares Braizat, Sep 11, 2022
Who are the winners and losers of the changing economic power dynamics in the Middle East? One of the best indicators to answer the question is to look at the GDP increase over the years, in current prices, as documented by the World Bank data.
Economic power is the source of all other manifestations of power, be it political, military, or cultural. Without economic power a country cannot sustain other types of soft or hard power.
Economically poor countries will not be able to project their military power or enhance the well-being of their people, as N. Korea and Iran, for example.
A comparison of the GDP growth of seven Middle Eastern countries that have various levels of significance for the global security, between 1980 and 2021, reveals an interesting finding.
Countries that are not oil dependent have multiplied their GDP in a much bigger way than oil-dependent countries. For example, Egypt’s GDP increased from $22 billion in 1980 to $404 billion in 2021 (almost 19 fold), Israel’s from $23 billion in 1980 to $481 billion in 2021 (18 fold), Turkey’s from $69 billion in 1980 to nearly $815 billion in 2021 (12 fold), Jordan’s from $4 billion in 1980 to nearly $45 billion in 2021 (11 fold).
These countries depend largely on productive economic activities rather than extractive economic production. By contrast, oil-dependent countries exhibited a different pattern. For example, UAE’s GDP grew from $43 billion in 1980 to nearly $400 billion in 2021 (10 fold), Saudi Arabia’s from $164 billion in 1980 to $833 billion in 2021 (fivefold), and Iran’s from $94 billion in 1980 to nearly $231 billion in 2021 (threefold).
Sure, Iran’s recent history of wars and sanctions made its growth lower than that of its regional rivals with similar economic dependency. However, both UAE and Saudi Arabia are positioned to diversify their economies and become less dependent on a single source. Should this trajectory realize its potential, these two countries may catch up in a much faster manner with Israel’s mode of economic growth.
Despite conditions similar to those of the region, Israel managed to propel its power resources beyond what its size and age would suggest. Using technology, for example, it managed to turn water scarcity into an asset through efficient water-management systems, using advanced irrigation techniques and desalination.
While S. Arabia and UAE are catching up with Israel, which has reached a world-class level, Israel is working to become an energy exporter by utilizing maritime gas fields; at the same time, the demarcation of its border with Lebanon will allow it to harvest more energy resources.
Jordan, by contrast, achieved its growth and maneuvered through the troubles in the region without advanced technology (Israel’s advantage) and energy (S. Arabia’s and UAE’s advantage).
Turkey’s exposure to the EU since the 1970s helped to make it a tech and manufacturing hub.
With the I2U2 (grouping India, Israel, UAE, and the US) geo-economic alliance, these power resources (tech and energy) are going to complement each other and lead to a formidable industrial and military power that is rooted in strong grounds.
The power dynamics of Egypt and S. Arabia will be changing as they utilize their human resources more efficiently, as stated in their respective visions for 2030.
Jordan, while working with regional and international partners, stands a great chance to continue its growth by utilizing its human capital and coming up with a vision, rather than waiting for natural resources to be discovered.
The writer is the Chairman of NAMA Strategic Intelligence Solutions, H.E. Dr. Fares Braizat.
This article was originally published in Jordan News on September 11, 2022. For the original article source, click here.