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Aim
This book was first published by Routledge in 1995 and received encouraging reviews. Successful sales resulted in a substantially revised and expanded second edition. The aims of this third edition are to update all of the data presented and address the new challenges which the economies of the Middle East face. The basic structure in terms of chapter headings and sub headings still seems appropriate. A new chapter on globalisation has been added however, reflecting the increasing diversity of links between the region and the wider world. In particular links with Asia have grown and strengthened, whereas those with Europe and the United States have declined relatively.
Internal developments have not unfolded as anticipated in the second edition as the so called āArab Springā has been and gone without any enduring impact. Existing state structures have been more resilient than expected, and change is likely to come by evolution rather than revolution. In this third edition therefore the methodology involves taking a political economy approach focusing on institutional factors rather than being designated as economic analysis. It is interdisciplinary as the determinants of development are not simply economic, but political and cultural. Development can and should be viewed from different perspectives and the greatest insights may be where disciplines intersect.
This new edition should be suitable for use by final year undergraduates and MA students in and from the Middle East, as well as outsiders interested in this rapidly changing region. A new feature of the third edition is the questions for discussion at the end of each chapter. These could be used for project work, assignments or seminar presentations. An important aspect of the book is to ask questions, which may be answered empirically using quantitative data, or qualitatively through an examination of historical or contemporary experiences.
The objective of this present study is to provide an account of the recent experience of development in the Middle East that will enhance the readersā understanding of how the development process works or fails in an important region of the world with several unique characteristics. This should encourage the reader to question the universality of the neo-classical approach to development. Are western economic concepts and values applicable in societies whose priorities may be very different, reflecting not only their stage of development, but differences in religion and culture? All too often economists neglect such issues.
In most courses on economic development the standard classical and neo-classical approaches are employed, so that students become acquainted with the conventional models, concepts and issues which are central to the subject. The meaning and measurement of development is the starting point, with the historical context emphasised. Growth and structural change are discussed in terms of one sector and two sector models. Concepts of dual economies are introduced as well as unbalanced growth theory and the notion of leading sectors.
One aim of this book is to reinforce the studentsā understanding of these basic concepts, by drawing on the experience of one specific geographical region. The Middle East economies are taken as case studies to illustrate and explore further the usefulness of the material the students have learnt. Through this exposure to a region with a distinctive culture, religion and value system, readers are challenged to rethink their assumptions about development, and indeed the premises of much of modern economic history.
The context
The economies of the Middle East have developed remarkably since the first edition was written, partly due to the second oil price boom and the much better management of surplus revenue. Although the oil price declined once again with the negative impact of Covid-19, it has subsequently revived. In the longer term, as fossil fuels are phased out to reduce the risks from climate change, the outlook for oil pricing and production is problematic. However, as this will take many decades the economies of the Middle East have time to diversify into alternative activities. The role of the state has changed with improvements in institutional capability, although the economic competency of governments and ministries varies more than ever as the gap between best practice and poor administration widens. The private sector plays a much greater role in the economies of the region, and home grown multinational companies have now emerged, but it is often difficult to delineate the boundaries between the state and the private sector.
Economic power has shifted from the northern Arab countries to the Gulf, with Saudi Arabia by far the largest economy in the region, ahead of Turkey and Iran. The economy of the UAE is now almost as large as that of Egypt. Capital flows from the economies of the Gulf Co-operation Council (GCC) to the northern Arab states have taken off and are having a profound economic impact on the region as a whole. Labour flows remain limited however, and the policy of prioritising employment for local citizens in countries such as Saudi Arabia and Kuwait has resulted in less mobility of Arab labour, apart from that of the more educated professionals. Regional integration therefore remains limited, and most trade is externally focused.
Iran is included in the study as an integral part of the region, with much of its trade flowing through the UAE. Although Iranās economy has suffered because of continuing sanctions by the United States and the European Union, the Islamic Republicās economic problems are mainly due to internal mismanagement. Nevertheless high oil and gas prices have helped the economy, and commercial relations with Asia are flourishing, and far from the economy collapsing, there is some reason for optimism. In neighbouring Iraq it is much harder to be optimistic, and although there have been significant economic changes since the United States invasion, sustainable economic development will not be possible until the security situation improves and politics becomes more stable, although since 2012 there has been some encouraging progress, with interest by foreign investors in Iraq increasing.
The Middle East receives more media coverage than any other area of the developing world. As a result of its deep seated conflicts the region is a major focus of attention for specialists in international relations and political scientists. Academics involved in development studies, and consequently their students, have much less knowledge of the Middle East. Indeed western economists and sociologists have been much more active in African and Latin American studies, and most case study material used in development courses relates to these regions.
In recent years development specialists have been pre-occupied with the economies of East and South East Asia, and to a lesser extent South Asia, as despite the Asia crisis of 1997, these are seen as much more promising cases of economic growth, especially given the Chinese and Indian experiences. In contrast the Middle East has been overlooked, with the growth in the GCC states simply attributed to oil and gas exports, rather than been viewed in the context of successful economic diversification strategies.
This relative neglect of the Middle East from the perspective of development studies is partly a result of the limited range of books and articles on the region written by British or American economists and sociologists. There are a number of books in English by Arab writers, but most adopt a country or sub-regional perspective, and do not treat the Middle East as an entity. Furthermore most of these authors are little known in development studies circles apart from notable exceptions such as Samir Amin.1 Even he, however, has comparatively little to say on the Middle East, being regarded as more of an African specialist.
Approach
The intention has been to write a subject oriented book rather than a country by country study. The approach is analytical rather than descriptive, with the analytical tools drawn from the theories of economic development. The objective is to complement established texts in development economics such as that by Michael Todaro and Stephen Smith, now in its eleventh edition,2 Frederick Nixson, now in its second edition,3 or Peter Cramp, now in its fourth edition.4 The first is the leading American text, while the latter two are aimed at the United Kingdom market. These mainstream texts use the tools of conventional economic theory, and demonstrate how economists such as W. Arthur Lewis have constructed models from these premises which can be applied specifically to developing countries.5 Such approaches are categorised by economists as neo-classical, and are often described as technocratic by political scientists and international relations specialists.
There are of course many alternative approaches to development, and this book is also designed to appeal to those who have followed these traditions. The text by Michael Todaro and Stephen Smith draws on a wide range of economic concepts and theories at an introductory and intermediate level. It is specifically targeted at economics students in developing countries, and draws on economic theories and concepts which are felt to be useful to explaining development problems. Todaro places more stress on comparative economic systems, and there is a fuller discussion of the merits of the command versus the market economy, issues which are pursued here.
A fundamentally different approach is that of Wilber and Jameson whose readings are designed for students of development studies generally and not only economists.6 The readings are written from a political economy perspective, and the contributors include committed Marxists such as Paul Baran. Overall the text is well balanced however, and it has been a popular recommendation for courses in development offered by sociology departments. The chapter by Howard Wiarda on non-ethnocentric theories of development is especially relevant for this study, as it considers views from those in emerging economies on development objectives. There is a highly critical contribution on privatisation by John Waterbury who has considerable Middle Eastern experience. The lack of further editions illustrates that radical approaches to development became less fashionable in recent years, undoubtedly reflecting the demise of socialism. Whether there is a revival of such approaches remains to be seen, although so far this does not appear to be the case. Indeed the political context has become nationalistic rather than socialistic. This is also the subtext of the study by Marcus Noland and Howard Pack, The Arab Economies in a Changing World. 7
A more mainstream developmental approach is taken by Julia Devlin in her book, Challenges of Economic Development in the Middle East and North Africa Region. Her study is comprehensive, but at the same time concise, and certainly an informative contemporary historical survey.8 An edited volume covering similar ground is the work by Hadi S. Esfahani and Guicay Tuna.9 This is becoming dated however, and is an expensive acquisition.
Amartya Senās consideration of development as freedom is also worth consideration in a Middle Eastern context.10 He sees the free and sustainable agency of people as a major engine of development, and the violation of freedoms resu...
