Trends in Middle East Economy

Trends in the Political Economy of the Middle East
IDF – Alisa Rubin Peled: December 29, 2005

First Book: Debating Islam in the Jewish State

OIL
The oil in the Middle East is the cheapest to produce. 2/3 of the world’s oil is in the Middle East (Saudi Arabia, Iran, Iraq, and Kuwait). 25% of the world’s oil is in Saudi Arabia.

1st highest mortality rate is Yemen at almost 7%
2nd highest mortality rate is in the Gaza Strip 6.17%
West Bank = about 4%


Is high births rate an effect of Islamic culture?
No. There’s actually family planning in Iran. The Total Fertility rate in Iran is only 2 babies per woman.

Israel’s average birthrate is 2.5%. This is high for a westernized country. Israel is one of the few countries that receive government incentive for additional children.

Young people having a lack of opportunity will contribute to extremism.

The Water Crisis
As well as desalinization - Israel is purchasing water from Turkey (for political reasons)
80-90% of water is used for agriculture in the desert Middle East countries. Why rely so much on agriculture? To be independent; for example, Saudi Arabia exports wheat.

Only 38% of women know how to read and write in Egypt.
Arab States put the lowest investment into R&D worldwide.
Israel has the highest percentage of GDP invested in R&D
Arab World puts 5.4% of their GDP into education, almost 1% higher than the world average.

Index of Economic Freedom: Israel ranks 33/161. Regulations and bureaucracy are still high. 5 families own most of the wealth in Israel. Netanyahu privatized this wealth to these 5 families.

Israel’s corruption is increasing, dropping 7 places to 28th on the Corruption Perceptions Index by Transparency International.

Israel’s biggest strength is High Tech. The Russian immigration helped boost this.
30% of start-ups in Israel are by repeat-entrepreneurs (versus 5% in the U.S.) – The Economist.

Never try to separate politics and economics in the Middle East. In the future, oil will help give Middle East countries a chance to make slow change.

Problems with the Arab World
• Freedom Deficit
• Woman Empowerment Deficit
• Literacy Rates