Economy of the Middle East - AbsoluteAstronomy.com

The Economy of the Middle East is very diverse. Composed of Bahrain

Bahrain

' , officially the Kingdom of Bahrain , is a small island state near the western shores of the Persian Gulf. It is ruled by the Al Khalifa royal family. The population in 2010 stood at 1,214,705, including 235,108 non-nationals. Formerly an emirate, Bahrain was declared a kingdom in 2002.Bahrain is...

, Cyprus

Cyprus

Cyprus , officially the Republic of Cyprus , is a Eurasian island country, member of the European Union, in the Eastern Mediterranean, east of Greece, south of Turkey, west of Syria and north of Egypt. It is the third largest island in the Mediterranean Sea.The earliest known human activity on the...

, Egypt

Egypt

Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...

, Iran

Iran

Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...

, Iraq

Iraq

Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....

, Israel

Israel

The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...

, Jordan

Jordan

Jordan , officially the Hashemite Kingdom of Jordan , Al-Mamlaka al-Urduniyya al-Hashemiyya) is a kingdom on the East Bank of the River Jordan. The country borders Saudi Arabia to the east and south-east, Iraq to the north-east, Syria to the north and the West Bank and Israel to the west, sharing...

, Kuwait

Kuwait

The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...

, Lebanon

Lebanon

Lebanon , officially the Republic of LebanonRepublic of Lebanon is the most common term used by Lebanese government agencies. The term Lebanese Republic, a literal translation of the official Arabic and French names that is not used in today's world. Arabic is the most common language spoken among...

, Oman

Oman

Oman , officially called the Sultanate of Oman , is an Arab state in southwest Asia on the southeast coast of the Arabian Peninsula. It is bordered by the United Arab Emirates to the northwest, Saudi Arabia to the west, and Yemen to the southwest. The coast is formed by the Arabian Sea on the...

, the Palestinian territories

Palestinian territories

The Palestinian territories comprise the West Bank and the Gaza Strip. Since the Palestinian Declaration of Independence in 1988, the region is today recognized by three-quarters of the world's countries as the State of Palestine or simply Palestine, although this status is not recognized by the...

, Qatar

Qatar

Qatar , also known as the State of Qatar or locally Dawlat Qaṭar, is a sovereign Arab state, located in the Middle East, occupying the small Qatar Peninsula on the northeasterly coast of the much larger Arabian Peninsula. Its sole land border is with Saudi Arabia to the south, with the rest of its...

, Saudi Arabia

Saudi Arabia

The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...

, Syria

Syria

Syria , officially the Syrian Arab Republic , is a country in Western Asia, bordering Lebanon and the Mediterranean Sea to the West, Turkey to the north, Iraq to the east, Jordan to the south, and Israel to the southwest....

, Turkey

Turkey

Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...

, United Arab Emirates

United Arab Emirates

The United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...

, and Yemen

Yemen

The Republic of Yemen , commonly known as Yemen , is a country located in the Middle East, occupying the southwestern to southern end of the Arabian Peninsula. It is bordered by Saudi Arabia to the north, the Red Sea to the west, and Oman to the east....

the individual economies range from hydrocarbon

Hydrocarbon

In organic chemistry, a hydrocarbon is an organic compound consisting entirely of hydrogen and carbon. Hydrocarbons from which one hydrogen atom has been removed are functional groups, called hydrocarbyls....

exporting rentier economies

Rentier state

A rentier state is a term in political science and international relations theory used to classify those states which derive all or a substantial portion of their national revenues from the rent of indigenous resources to external clients.- Usage :...

to government led socialist economies to free market

Free market

A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...

economies.

Collectively, the region is best known for producing and exporting oil

Oil

An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....

. The oil industry does significantly impact the entire region, both through the wealth that it generates and through the movement of labor. Most of the countries in the region have undertaken efforts to diversify their economies in recent years, however. In the report, Science-Metrix says the number of scientific publications listed in the Web of Science

Web of Science

ISI Web of Knowledge is an academic citation indexing and search service, which is combined with web linking and provided by Thomson Reuters. Web of Knowledge coverage encompasses the sciences, social sciences, arts and humanities. It provides bibliographic content and the tools to access, analyze,...

database shows that the standard growth in the Middle East

Middle East

The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...

, particularly in Iran and Turkey, is nearly four times faster than the world average.

Statistics

An International Monetary Fund

International Monetary Fund

The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

analysis of growth determinants indicates that greater integration with international markets could provide a substantial boost to income and growth. See also: Middle East economic integration

Middle East economic integration

Middle East economic integration has been envisioned, proposed or implemented by various parties in recent history.The stated rationale is that peace, stability and prosperity in the Middle East can only be sustained over the long-run through intra-regional economic cooperation.Governance,...

Prospects for the MENA Region
MENA Region	2009	2010	2011
Real GDP growth	2.8	3.6	4.5
Real GDP growth (PPP)	2.7	3.6	4.5
Exports (change %)	-9.5	2.6	5.2
Imports (change %)	1.2	4.9	6.6
CA balance Current account In economics, the current account is one of the two primary components of the balance of payments, the other being the capital account. The current account is the sum of the balance of trade , net factor income and net transfer payments .The current account balance is one of two major... (% of GDP)	-0.1	1.5	0.9

{| {| class="wikitable sortable" align="left"
|-
! Rank
! Country
! GDP Per
Capita
! GDP (PPP)
Total ($US B)
|-
| 1
|

Qatar

| align=right | $ 121,700
| align=right | $ 101.2
|-
| 2
|

Kuwait

| align=right | $ 54,100
| align=right | $ 150.2
|-
| 3
|

United Arab Emirates

| align=right | $ 42,000
| align=right | $ 200.4
|-
| 4
|

Bahrain

| align=right | $ 38,400
| align=right | $ 28
|-
| 5
|

Israel

The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...

| align=right | $ 28,400
| align=right | $ 205.2
|-
| 6
|

Oman

| align=right | $ 23,900
| align=right | $ 69.43
|-
| 7
|

Cyprus

| align=right | $ 21,200
| align=right | $ 22.85
|-
| 8
|

Saudi Arabia

| align=right | $ 20,400
| align=right | $ 581.3
|-
| 9
|

Lebanon

| align=right | $ 13,100
| align=right | $ 46.03
|-
| 10
|

Iran

| align=right | $ 12,900
| align=right | $ 876
|-
| 11
|

Turkey

Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...

| align=right | $ 15,392
| align=right | $ 1118.6
|-
| 12
|

Egypt

| align=right | $ 6,000
| align=right | $ 470.4
|-
| 13
|

Jordan

| align=right | $ 5,300
| align=right | $ 33.06
|-
| 14
|

Syria

| align=right | $ 4,600
| align=right | $ 102.5
|-
| 15
|

Iraq

| align=right | $ 3,600
| align=right | $ 96.6
|-
| 16
|

West Bank

The West Bank ) of the Jordan River is the landlocked geographical eastern part of the Palestinian territories located in Western Asia. To the west, north, and south, the West Bank shares borders with the state of Israel. To the east, across the Jordan River, lies the Hashemite Kingdom of Jordan...

| align=right | $ 2,900
| align=right | $ N/A
|-
| 17
|

Yemen

| align=right | $ 2,500
| align=right | $ 58.2
|-
| 18
|

Gaza Strip

thumb|Gaza city skylineThe Gaza Strip lies on the Eastern coast of the Mediterranean Sea. The Strip borders Egypt on the southwest and Israel on the south, east and north. It is about long, and between 6 and 12 kilometres wide, with a total area of...

| align=right | $ 2,494
| align=right | $ N/A
|-
|}

/

/

Bahrain

Owing to large oil deposits and a small population Bahrain

Bahrain

has a per capita GDP of $37,200. Despite the nation's ability to provide for its population by relying on its oil reserves Bahrain has made efforts to expand its economic base. It has built refining capacity that outstrips its own oil production. Consequently, Bahrain actually imports crude oil from Saudi Arabia

Saudi Arabia

, refines it, and re-exports it. The state has expanded its industrial capacity to include Aluminum and signed a Free Trade Agreement with the United States in an effort to expand its export base. Because of heavy industrialization and the necessary construction that accompanies it and Bahrain's small population it relies heavily on imported labor. Consequently 44% of the population in Bahrain between the ages of 15 and 64 are foreign nationals. Bahrain has also positioned itself as a strong player in Islamic banking

Islamic banking

Islamic banking is banking or banking activity that is consistent with the principles of Islamic law and its practical application through the development of Islamic economics. Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees for loans of money...

in an effort to expand beyond resource exports and into a greater role in the international service industry.

Cyprus

The economy of Cyprus

Cyprus

is a prosperous one. In 2008 it was classified by the IMF amongst the 32 advanced economies of the world. The IMF forecasts that Cyprus will be the only developed economy to enjoy continuous growth rates through the 2009 financial crisis. Cyprus has an open, free-market, service-based economy with some light manufacturing

Manufacturing

Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...

. The Cypriots are among the most prosperous people in the Mediterranean

Mediterranean Sea

The Mediterranean Sea is a sea connected to the Atlantic Ocean surrounded by the Mediterranean region and almost completely enclosed by land: on the north by Anatolia and Europe, on the south by North Africa, and on the east by the Levant...

region. Internationally, Cyprus promotes its geographical location as a "bridge" between West and East, along with its educated English-speaking

English language

English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...

population, moderate local costs, good airline connections, and telecommunications.

Oil

Oil

has recently been discovered in the seabed between Cyprus and Egypt, and talks are underway between Lebanon

Lebanon

and Egypt

Egypt

to reach an agreement regarding the exploration of these resources. The seabed separating Lebanon and Cyprus is believed to hold significant quantities of crude oil

Petroleum

Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...

and natural gas

Natural gas

Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...

. However, the Turkish

Turkey

Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...

Navy doesn't allow the exploration of oil in the region.

Egypt

derives a great deal of its foreign exchange from tourism

Tourism in Egypt

Tourism is one of the most important sectors in Egypt's economy. More than 12.8 million tourists visited Egypt in 2008, providing revenues of nearly $11 billion. The sector employs about 12 percent of Egypt's workforce. -History:...

. Consequently most of its labor force is devoted to the service sector. Agriculture is also a large part of the Egyptian economy. The Nile River provides Egypt with some of the most fertile land in the Middle East. It produces food for consumption and export as well as cotton

Cotton

Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....

for domestic and foreign textile

Textile

A textile or cloth is a flexible woven material consisting of a network of natural or artificial fibres often referred to as thread or yarn. Yarn is produced by spinning raw fibres of wool, flax, cotton, or other material to produce long strands...

production. Egypt's other great resource is the Suez Canal

Suez Canal

The Suez Canal , also known by the nickname "The Highway to India", is an artificial sea-level waterway in Egypt, connecting the Mediterranean Sea and the Red Sea. Opened in November 1869 after 10 years of construction work, it allows water transportation between Europe and Asia without navigation...

. Roughly 7.5% of global sea trade transits the canal providing Egypt revenues in excess of $3 billion annually. Egypt's industrial base dates back to the 1960s, when the nation undertook import substitution industrialization policies. The inefficiencies of the state-run program have led the government to begin a privatization program and as a result Egypt enjoyed substantial GDP growth in the first decade of the 21st century. It has also taken advantage of Qualifying Industrial Zone

Qualifying Industrial Zone

Qualifying Industrial Zones are industrial parks that house manufacturing operations in Jordan and Egypt. They are a special free trade zones established in collaboration with Israel to take advantage of the free trade agreements between the United States and Israel...

to expand trade relations with the United States. Despite these developments Egypt remains an underdeveloped country with a per capita GDP of $5,500.

Iran

has one of the largest economy in the Middle East

Economy of Iran

The economy of Iran is the eighteenth largest in the world by purchasing power parity and according to Iranian officials' claims is going to become the 12th largest by 2015. The economy of Iran is a mixed and transition economy with a large public sector and some 50% of the economy centrally planned...

. It is the world's 18th largest by PPP. Iran's major industries

Industry of Iran

According to a report by the Economist, Iran has been ranked 39th for producing $23 billion of industrial products in 2008. From 2008 to 2009 Iran has leaped to 28th place from 69th place in annual industrial production growth rate. A recent report by the World Fact Book ranks Iran 3rd among...

are largely state owned. The nature of the Iranian state-owned enterprises has led to a degree of inefficiency. Iran ranks 69th out of 139 in Global Competitiveness Report

Global Competitiveness Report

The Global Competitiveness Report is a yearly report published by the World Economic Forum. The first report was released in 1979. The 2011–2012 report covers 142 major and emerging economies....

. Iran has been able to subsidize inefficient industry through large oil revenues and maintain respectable growth rates. The nature of the state-driven economy has led to significant 'brain drain

Iran's brain drain

According to the International Monetary Fund, the Islamic Republic of Iran ranks first in "brain drain" among 61 "developing" and "less developed" countries it measured....

' in recent years as educated Iranians

Iranian citizens abroad

The term Iranians abroad or Iranian diaspora refers to the Iranian people born in Iran but living outside of Iran with their children.As of 2010, there are an estimated four to five million Iranians living abroad, mostly in North America, Europe, Persian Gulf States, Turkey, Australia and the...

seek opportunities abroad. Consequently, Iran has begun a privatization effort

Privatization in Iran

According to the Fourth Five-Year Economic Development Plan , the Privatization Organization of Iran affiliated to the Ministry of Economic Affairs and Finance is in charge of setting prices and ceding shares to the general public and on the Tehran Stock Exchange...

in order to stimulate trade in accordance with its ongoing five-year plan as well as an ambitious economic reform plan

Iranian Economic Reform Plan

The Iranian targeted subsidy plan also known as the subsidy reform plan was passed by the Iranian Parliament on January 5, 2010. The government has described the subsidy plan as the "biggest surgery" to the nation's economy in half a century and "one of the most important undertakings in Iran's...

.

The most important advantage that Iran's capital market has in comparison with other regional markets is that there are 40 industries

Industry of Iran

directly involved in it. Industries

Industry of Iran

such as the automotive, telecommunications

Communications in Iran

Iran’s telecommunications industry is almost entirely state-owned, dominated by the Telecommunication Company of Iran . Fixed-line penetration in 2004 was relatively well-developed by regional standards, standing at 22 lines per 100 people, higher than Egypt with 14 and Saudi Arabia with 15,...

, agriculture, petrochemical

National Iranian Petrochemical Company

The National Iranian Petrochemical Company , a subsidiary to the Iranian Petroleum Ministry, is owned by the government of the Islamic Republic of Iran. It is responsible for the development and operation of the country's petrochemical sector. Founded in 1964, NIPC began its activities by operating...

, mining, steel iron, copper, banking and insurance, financial mediation and others trade shares at the stock market

Tehran Stock Exchange

The Tehran Stock Exchange is Iran's largest stock exchange, which first opened in 1967. The TSE is based in Tehran. As of July 2010, 337 companies with a market capitalization of US$72 billion were listed on TSE...

, which makes it unique in the Middle East. Iran has a high potential of becoming one the world's largest economies in the 21st century

Next Eleven

The Next Eleven are eleven countries—Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, and Vietnam — identified by Goldman Sachs investment bank and Jim O'Neill as having a high potential of becoming, along with the BRICS, the world's largest...

Iraq

Nearly 30 years of fighting, against Iran in the 1980s and the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

since 1991, has had a detrimental impact on Iraq

Iraq

i economic growth. Oil production remains Iraq's chief economic activity. The lack of development in other sectors has resulted in 18%–30% unemployed and a depressed per capita GDP of $4,000. Reconstruction aid has helped to bolster the nation's infrastructure, however, an ongoing insurgency

Iraqi insurgency

The Iraqi Resistance is composed of a diverse mix of militias, foreign fighters, all-Iraqi units or mixtures opposing the United States-led multinational force in Iraq and the post-2003 Iraqi government...

has handicapped economic recovery.

Israel

The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...

's national leadership established a socialist

Socialist economics

Socialist economics are the economic theories and practices of hypothetical and existing socialist economic systems.A socialist economy is based on public ownership or independent cooperative ownership of the means of production, wherein production is carried out to directly produce use-value,...

economy when Israel gained independence in 1948. The purpose of this approach was to establish economic self-sufficiency, particularly agriculturally, in the face of hostile neighbors and to provide jobs for a population rapidly expanding through immigration

Aliyah

Aliyah is the immigration of Jews to the Land of Israel . It is a basic tenet of Zionist ideology. The opposite action, emigration from Israel, is referred to as yerida . The return to the Holy Land has been a Jewish aspiration since the Babylonian exile...

. The socialist nature of the economy created a great deal of inefficiency which the government was able to offset through foreign aid, first in the form of West German Holocaust reparations

Reparations Agreement between Israel and West Germany

The Reparations Agreement between Israel and West Germany was signed on September 10, 1952, and entered in force on March 27, 1953...

then through direct aid, primarily from western nations.

Following the Yom Kippur War

Yom Kippur War

The Yom Kippur War, Ramadan War or October War , also known as the 1973 Arab-Israeli War and the Fourth Arab-Israeli War, was fought from October 6 to 25, 1973, between Israel and a coalition of Arab states led by Egypt and Syria...

Israeli defense spending rose dramatically, exposing the weaknesses of the state-run economy. The result was rampant inflation that led Israel to recall the lira in 1980 and issue the sheqel

Israeli sheqel

The old shekel was the currency of Israel between February 24, 1980, and December 31, 1985 until replaced by the Israeli new shekel at a ratio of 1000:1 on January 1, 1986. The old shekel was short-lived due to the high rates of inflation in Israel at the time. The old shekel was subdivided into...

. This move did not sufficiently curb inflation and consequently the sheqel was recalled in 1985 in favor for the Israeli new sheqel

Israeli new sheqel

The Israeli New Shekel is the currency of the State of Israel. The shekel is divided into 100 agorot...

, a move implemented together with a comprehensive economic stabilization program

Economic Stabilization Plan (Israel 1985)

The Economic Stabilization Plan was implemented in Israel in 1985 in response to the dire domestic economic situation of the early 1980s.The background to the crisis is that the years after the 1973 Yom Kippur War were a lost decade economically, as growth stalled, inflation soared and government...

which stemmed inflation and set the stage for high growth in the 1990s. Israel had also undertaken a privatization effort beginning in the late 1970s. The economy received a boost in the early 1990s with the arrival of several hundred thousand immigrants form the former Soviet Union

Soviet Union

The Soviet Union , officially the Union of Soviet Socialist Republics , was a constitutionally socialist state that existed in Eurasia between 1922 and 1991....

. As a significant number of the immigrants were highly educated, Israel accelerated its privatization in order to encourage the high-skilled workers to stay. The new high-skill labor also attracted a lot of foreign direct investment

Foreign direct investment

Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...

. Israel's growth over the past decade has been commensurate with western developed nations as is its GDP (PPP) per-capita which is about $30,000/year – the highest of all the non natural resources dependent countries in the Middle East. It is described as "Very Highly Developed" on the UN

United Nations

The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...

's Human Development Index

Human Development Index

The Human Development Index is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries...

, ranking 15th among 169 world nations in 2010.

In September 2010, Israel joined the OECD, which praised Israel's scientific and technological progress

Science and technology in Israel

Science and technology in Israel is one of the country's most developed sectors. The percentage of Israelis engaged in scientific and technological inquiry, and the amount spent on research and development in relation to gross domestic product , is amongst the highest in the world...

and described it as having "produced outstanding outcomes on a world scale." Indeed, much of the growth in the country's economy over the past couple of decades is attributable to the software, biomedical, electronics, telecommunications and other high-technology sectors as the percentage of Israelis engaged in scientific and technological inquiry, and the amount spent on research and development

Research and development

The phrase research and development , according to the Organization for Economic Co-operation and Development, refers to "creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of...

(R&D) in relation to gross domestic product

Gross domestic product

Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....

(GDP), is among the highest in the world.

Jordan

operates a rentier economy

Rentier state

based largely on foreign aid, investment, and remittances. Jordan

Jordan

heavily depends on its highly skilled workforce in the oil-rich Persian Gulf

Persian Gulf

The Persian Gulf, in Southwest Asia, is an extension of the Indian Ocean located between Iran and the Arabian Peninsula.The Persian Gulf was the focus of the 1980–1988 Iran-Iraq War, in which each side attacked the other's oil tankers...

to send back money to help support thousands of Jordanian families. Consequently its economic fortunes are tied to events in the international community. Although the standard of living in Jordan

Jordan

is significantly higher than other countries with similar incomes, many Jordanians opt for a job abroad because of soaring costs of living and high unemployment in their native country. Jordan is dependent on those remittances

Remittances

A remittance is a transfer of money by a foreign worker to his or her home country. Note that in 19th century usage a remittance man was someone exiled overseas and sent an allowance on condition that he not return home....

which have accounted for nearly 20% of GDP since 1975. Jordan's dependence has had detrimental consequences. Following Iraq's 1990 invasion of Kuwait

Invasion of Kuwait

The Invasion of Kuwait, also known as the Iraq-Kuwait War, was a major conflict between the Republic of Iraq and the State of Kuwait, which resulted in the seven-month long Iraqi occupation of Kuwait, which subsequently led to direct military intervention by United States-led forces in the Gulf...

hundreds of thousands of Palestinians were expelled from other Arab nations. For Jordan this resulted in the significant loss of remittance revenue.

Although the 2003 Iraq War brought detrimental consequences to Jordan's economy at first, it gave Jordan

Jordan

a huge boost in trade and investment with wealthy Iraqis re-settling in Jordan and Amman

Amman

Amman is the capital of Jordan. It is the country's political, cultural and commercial centre and one of the oldest continuously inhabited cities in the world. The Greater Amman area has a population of 2,842,629 as of 2010. The population of Amman is expected to jump from 2.8 million to almost...

become a transit point for business and trade bound to Iraq. Jordan consequently became known as the "Gateway to Iraq

Iraq

" and later the "Gateway to the Middle East". Jordan's pro-business and pro-Western government has created incentives and free trade zones to spur further economic growth.

Jordan's private sector growth has been led by Palestinians. By taking advantage of Qualifying Industrial Zone

Qualifying Industrial Zone

s manufactured exports have increased, led largely through the growth of a textile

Textile

industry. Jordan's shift to a free market economy has brought unprecedented amounts of investments into the economy. Jordan has one of the freest economies in the Middle East due to several key economic reforms in the past few years. Tourism, ICT, trade, and future oil shale and uranium exports will form the backbone of Jordan's economy.

Kuwait

's small population and substantial oil resources led it to become a Rentier state

Rentier state

. The per capita GDP is $60,800. As part of a diversification plan the Kuwaiti government has invested its oil revenues and maintains a sizable sovereign wealth fund

Sovereign wealth fund

A sovereign wealth fund is a state-owned investment fund composed of financial assets such as stocks, bonds, property, precious metals or other financial instruments. Sovereign wealth funds invest globally. Some of them have grabbed attention making bad investments in several Wall Street financial...

. These investment currently account for nearly half of Kuwait's GDP. Because Kuwait's wealth has provided a comfortable standard of living for its citizens it imports most of its labor. Roughly 80% of Kuwait's work force is foreigners.

Lebanon

The economy of Lebanon

Lebanon

has been severely inhibited by internal sectarian conflict and conflict between Israel

Israel

The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...

and Hizballah. The government has incurred significant debt attempting to rebuild the national infrastructure following the Lebanese Civil War

Lebanese Civil War

The Lebanese Civil War was a multifaceted civil war in Lebanon. The war lasted from 1975 to 1990 and resulted in an estimated 150,000 to 230,000 civilian fatalities. Another one million people were wounded, and today approximately 350,000 people remain displaced. There was also a mass exodus of...

. Through foreign assistance the nation has made strides to rebuild, but still remains largely underdeveloped. Currently its trade deficit is nearly $8 billion, its external debt is $31.6 billion, and its per capita GDP is $12,704. Lebanon's economy is being rebuilt, especially by the remarkable growth of its industry (including cement) and services sector which presents more than 70% of the country's economy. Beirut is regaining its place as a center of the Middle East as foreign investments are making a huge comeback in all sectors and businesses and making huge profits, which will encourage more capitals investments.

Oman

Among the nations of the Middle East Oman

Oman

is the most reliant on oil for its finances. Currently oil production and export accounts for 69% of the nation's revenue. The oil industry is relatively young in Oman and consequently growth has come rapidly to the country. The government is also developing a plan to sustain its economy and divest its reliance on oil. By 2020 it hopes to reduce oil revenue to just 9% of its income. Along with that plan the country hopes to move away from rentier economics

Rentier state

and employ its citizens in the labor market and reduce reliance on expatriate labor. To take its first steps in economic independence it has signed a Free Trade Agreement with the United States and is seeking to do the same with the European Union

European Union

The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

, China

China

Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...

, and Japan

Japan

Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

. It is currently maneuvering itself into the re-export

Re-exportation

Re-exportation can occur when one member of a free trade agreement charges lower tariffs to external nations to win trade, and then re-exports the same product to another partner in the trade agreement, but tariff-free. Re-exportation can be used to avoid sanctions by other nations...

and heavy manufacturing markets.

Palestinian Territories

The economy of the Palestinian National Authority

Palestinian National Authority

The Palestinian Authority is the administrative organization established to govern parts of the West Bank and Gaza Strip...

has been severely truncated by the ongoing conflict with Israel

Israeli–Palestinian conflict

The Israeli–Palestinian conflict is the ongoing conflict between Israelis and Palestinians. The conflict is wide-ranging, and the term is also used in reference to the earlier phases of the same conflict, between Jewish and Zionist yishuv and the Arab population living in Palestine under Ottoman or...

. Production has dropped since the beginning of the Second Intifada in 2000. The Gaza Strip has been blockaded by Israel and Egypt since June 2007 after Hamas

Hamas

Hamas is the Palestinian Sunni Islamic or Islamist political party that governs the Gaza Strip. Hamas also has a military wing, the Izz ad-Din al-Qassam Brigades...

took control of the Palestinian territory in the course of a conflict with rival Palestinian group Fatah

Battle of Gaza (2007)

The Battle of Gaza was a military conflict between Hamas and Fatah that took place between June 7 and 15, 2007 in the Gaza Strip. After winning Palestinian legislative elections in 2006, Hamas and Fatah formed the Palestinan authority national unity government in 2007, headed by Ismail Haniya. In...

. Only limited humanitarian aid has been allowed into the Gaza Strip. In May 2010, the UN Office for the Coordination of Humanitarian Affairs

Office for the Coordination of Humanitarian Affairs

The United Nations Office for the Coordination of Humanitarian Affairs , is a United Nations body formed in December 1991 by General Assembly Resolution 46/182...

stated that the formal economy in Gaza has collapsed since the imposition of the blockade. The West Bank has fared slightly better since the split in the Palestinian power structure

Battle of Gaza (2007)

and Fatah

Fatah

Fataḥ is a major Palestinian political party and the largest faction of the Palestine Liberation Organization , a multi-party confederation. In Palestinian politics it is on the left-wing of the spectrum; it is mainly nationalist, although not predominantly socialist. Its official goals are found...

took power in the West Bank Israel has opened some trade up. Still the Palestinian Authority is nearly entirely dependent on foreign aid. Collectively the Palestinian territories have a per capita GDP of $2,900.

Qatar

currently enjoys the regions highest per capita GDP at $101,000. It has derived its wealth from exploiting its oil and natural gas

Natural gas

reserves. With the revenues from its hydrocarbon industries Qatar has established a rentier economy

Rentier state

. Qatar has also build established the largest per capita sovereign wealth fund

Sovereign wealth fund

in the world. With a population under one-million people the government has not found it necessary to diversify its economy.

Saudi Arabia

has 20% of the known oil reserves in the world. With its oil they have a national GDP of $546 billion and a per capita GDP of $21,300. With this revenue stream the country has become the largest rentier economy in the world. As the oil wealth grew so too did the civil service. It grew from 37,000 in 1962 to 232,000 in 1981. Further, as Saudi Arabia's civil service grew so too did its reliance on foreign labor which currently stand at 5.5 million or about one-third of its working age population.

Currently about 40% of Saudi Arabia's population is under the age of 15. This has led the government to accelerate investment in education and infrastructure in an effort to ensue jobs for the growing population and alleviate a chronically high unemployment rate. The state has announced plans to build six 'economic cities' in order to diversify its economy.

Syria

Stemming from a 1960s nationalization effort most Syria

Syria

n economy is run by the government. However, owing to the inefficient public sector, significant domestic subsidies, and considerable intervention investment in Lebanon inflation and external debt have become significant problems. Consequently, the Syrian government has undertaken modest privatization reform in preparation for the opening of the Damascus Stock Exchange in 2009. Modest oil production and an agriculture sector lead Syria's production while most of its employment is in the service sector. Its per capita GDP stands at $4,900.

Turkey

Turkey has the world's 15th largest GDP-PPP and 15th largest Nominal GDP. The country is a founding member of the OECD (1961) and the G-20 major economies

G-20 major economies

The Group of Twenty Finance Ministers and Central Bank Governors is a group of finance ministers and central bank governors from 20 major economies: 19 countries plus the European Union, which is represented by the President of the European Council and by the European Central Bank...

(1999). Turkey has been part of the EU Customs Union since 31 December 1995.

Turkey is often classified as a newly industrialized country by economists and political scientists; while Merrill Lynch

Merrill Lynch

Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...

, the World Bank

World Bank

The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...

and The Economist

The Economist

The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...

magazine describe Turkey as an emerging market

Emerging markets

Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. Based on data from 2006, there are around 28 emerging markets in the world . The economies of China and India are considered to be the largest...

economy.

Turkey

Turkey

Turkey , known officially as the Republic of Turkey , is a Eurasian country located in Western Asia and in East Thrace in Southeastern Europe...

is restructuring its economy in an attempt to gain full European Union

European Union

membership. It began this policy in the early 1970s, abandoning its previous import substitution industrialization policy. As privatization has taken hold in Turkey it has brought with it significant foreign direct investment

Foreign direct investment

. Additionally, the Baku-Tbilisi-Ceyhan pipeline

Baku-Tbilisi-Ceyhan pipeline

The Baku–Tbilisi–Ceyhan pipeline is a long crude oil pipeline from the Azeri-Chirag-Guneshli oil field in the Caspian Sea to the Mediterranean Sea. It connects Baku, the capital of Azerbaijan; Tbilisi, the capital of Georgia; and Ceyhan, a port on the south-eastern Mediterranean coast of Turkey,...

has brought revenue to Turkey and enabled it to share some of the regional hydrocarbon wealth. Turkey's economy is currently led by its agricultural

Agriculture

Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...

and textile

Textile

sectors. It has a per capita GDP of $11,200, supplemented by some 1.2 million Turks working abroad.

United Arab Emirates

The United Arab Emirates

United Arab Emirates

have used their oil revenues to develop a modern state. They have made considerable investment in infrastructure and are negotiating a free trade agreement with the United States in an effort to diversify their economy. Additionally, the nation has made a notable effort to develop a tourist industry by building attractions such as indoor ski slope and artificial resort islands. The UAE is also making an effort to attract foreign direct investment

Foreign direct investment

by offering 100% foreign ownership and no taxes. Because of the massive growth and construction involved in their projects the UAE is heavily dependent on foreign labor.

Yemen

has plagued by chronic economic mismanagement. With 35% unemployment, the nation relies heavily on expatriate remittances

Remittances

. The reliance on foreign labor markets proved disastrous following the 1991 Persian Gulf War

Gulf War

The Persian Gulf War , commonly referred to as simply the Gulf War, was a war waged by a U.N.-authorized coalition force from 34 nations led by the United States, against Iraq in response to Iraq's invasion and annexation of Kuwait.The war is also known under other names, such as the First Gulf...

when Saudi Arabia and Kuwait expelled Yemeni workers and curtailed aid to the country in response to its support of Iraq. Most of Yemen's GDP comes from its limited oil production. The bulk of its labor is involved in agriculture

Agriculture

where its primary cash crop is khat

Khat

Khat, qat, gat or Waquish Spoken from true Yemeni, is a flowering plant native to tropical East Africa and the Arabian Peninsula....

External links

2010 Economic Prospects for the Middle East and North Africa Region - World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
2010 Regional Economic Outlook: Middle East and Central Asia - International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
2011 Regional Economic Outlook: Middle East and Central Asia - International Monetary Fund

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