Discuss and Analyze How Middle Eastern Economies Can Be Independent and Self Sufficient
Middle Eastern economies are one of the regional economies in the world that has over the years been subject of discussion for its abnormal trend. The region is heavily loaded with resources, in particular oil. It is the largest exporter of oil in the world. Middle East enjoys dominance in the oil sector, a generally favorable geo-strategic location at the interception of three continents, a direct proximity to one of the world economic hub-the European Union and adequate connection to waterways and sea. Despite this, Middle Eastern economies are among the poorly performing economies in the world. In fact, as compared to other developing countries in Asia and Africa which do not have oil reserves or enjoy the benefits that this region has, it is surprising that the region`s economies have been growing minimally. With all the potential that Middle East has and the leverage it has over other countries (both developing and developed), Middle Eastern countries hopes of becoming self sufficient and independent are achievable. This essay looks at what Middle East can do to achieve sustainable growth.
Middle Eastern countries have been over the years been ruled by dictators where democracy has never been embraced. As such, the region is marred by poor social political policies, poor civil and political liberties, gender inequality, corruption, bureaucracy, and lack of opportunities for the full development of human knowledge and capabilities. This are the root causes of the underperforming nature of the region. The region can overcome these challenges by adopting modern institutions such as democratic forms of governance including freely elected policy makers, competent and sovereign judiciaries, and institutions establishment or empowering of institutions protecting human and civil rights. This will see the countries in the region develop become favorable for foreign investors, as there will be reduced bureaucracy, transparency, build investor confidence, enhance development, streamline public sector that are all beneficial for economic development.
In addition, oil-reliant countries have a likelihood of relying largely on oil. Market fluctuations and new discoveries of oil reserves elsewhere in the world threaten these economies. Middle Eastern countries must conduct fiscal policy by changing their view on their resource endowments and their influence on the countries` welfare. The role of fiscal policy in oil producing nations is very important and mainly aims at cushioning this effects of oil markets economy booms and bursts in the long run, when keeping in check issues of government spending and investment policies and financing of public sector processes. The policy should emphasis on delinking state spending from oil gains, hence help in diversifying the economies of these countries. This will also see the removal of barriers to improvement of the non-oil industries. Middle Eastern will need to also review taxation policies to be able to boost other sectors and reduce overreliance on oil, hence become self sufficiently and independent.
Middle Eastern region have realized the importance of educating its population. Nevertheless the curriculum and education need does not address or conform to the countries` need. Majority of education is targeted at imparting theoretical knowledge rather than application. Education reforms need to be addressed in the various countries in the region. Emphasize should be done on reviewing the curriculum to a more flexible and modern one, not forgetting improving training, hiring and remuneration issues so that the quality of education can improve. This will help graduates from the various education levels including primary, secondary and tertiary levels to be able to provide the needed human capital in propelling the highly potential economies of the Middle Eastern region to greater heights.
Middle East lacks proper trade liberalization policies. Most developing countries have opened up to the world to enable them benefit from bilateral or multilateral trade. This leads to higher productivity and growth in per capita income. Middle Eastern countries need to enhance liberalization by reducing trade barriers, reduce government imposed charges tariff and non tariff barriers and generally opening to the world. This will lead to increased trade hence enhance productivity by importing stimulating technology and knowledge. Gulf Cooperation Council (GCC) member countries have benefited from trade liberalization, an indication that, the regions shift from traditional conservancy to globalization is key to economic success. This will also help create employment opportunities for the fast growing population.
Finally, Middle East`s stability has been very volatile over the years. The governments have largely spent on military equipment unnecessarily even when they have no potential threat. This is also one reason that has made the region get into conflict with other countries and within itself. The region needs to refocus its energy in sustainable development, improvement of foreign policy and investment in education to be able to address the challenges hindering it from achieving economic prosperity, rather than investing in military.
Ultimately, Middle Eastern region has a great potential of becoming the next global economic hub, with high per capita income, improved infrastructure, low unemployment rates, political stability, quality education and general improved standard of living of its populations.