How can the MENA Region Achieve Sustainable Economic Development?
The Middle East North Africa (MENA) region is currently facing a crisis. These countries encapsulate some of the richest cultures that trace back to some of the earliest accounts in the world. However, ever since the fall of the Ottoman Empire, independent states have been left to rule on their own. Luckily due to the vast amounts of oil in the ground within the region, these states have been able to propel their economies due to the vast wealth that follows almost limitless stocks of oil and gas. But is oil and gas a sustainable way to fuel your economy as these countries continue to grow? No, resource curses have driven countries into stagnated states that could restrict growth for years to come. Consequently, encouraging countries to seek economic sustainability throughout the MENA region will help counteract the resource curse that countries are currently facing. First, MENA countries need to start by diversifying trade at an interregional level. Trade in the region will be promoted by the reduction of the total amount of oil and gas exports to other nations around the world. Corporations like the Gulf Cooperation Council (GCC) can lead the front on an interregional scale; however, countries on a national scale can understand the need to move away from oil and gas as it will not fuel the economy forever.
Economic sustainability practices the support of long-term economic growth without negatively impacting social, environmental, and cultural aspects of the community. This being said, promoting this aspect of economic growth in the region will lead to counties that are not dependent on income from resources that will not be there forever. Understanding the aspect of an easy reliance on a resource curse is paramount to how the countries of the MENA region were able to propel themselves to international success; furthermore, these countries having such large stores of oil caused them to be sought after by current world powers looking to achieve success and growth in their own countries. That interest caused these newly founded countries to have a bidding war on their hands. As cash started to flow in the Sheikhs of the region did not have to focus on truly developing other aspects of the markets outside of oil and gas.
Despite the fact that MENA countries have access to easy cash flow from oil and gas, it is a finite resource. Seeking economic sustainability will allow for the transition to an economy that would be able to last through hardships as well as continue to grow. However, moving towards this goal is not easily done as for most countries because oil and gas take up upwards to 80% of the income of a country. So what can be done to insight the movement to economic sustainability? The MENA region has relied heavily on exports of oil and gas to other regions; consequently, causing limited interregional relationships as well as not needing to develop other goods and services in their markets as sources of income. Currently, countries of the region are focused on the wealth that they would achieve from staying in the oil and gas industry but are not looking at the repercussions of doing so. For example, Iraq intends to continue to develop its industries around oil and gas to try and achieve the wealth that it lost over the past 40 years. This idea will in turn only benefit Iraq and not the region, other countries are carrying out similar plans to just develop their own sectors and not look at the region as a whole.
Consequently, the idea of promoting trade within the region would limit the need to focus on exporting oil and gas. Trade would allow these countries to develop underappreciated aspects of their markets. Which would in turn spark the start of sustainable development within the countries and the region as a whole.
Leading regional corporations like the Gulf Cooperation Council (GCC) can head the movement to promote this trade. The GCC is home to some of the largest economies in the region; furthermore, the GCC has countries that are understanding of the need to diversify their economies. Being a cooperative leader within the region will promote some of the smaller countries to understand the importance of achieving economic sustainability. By extension promoting the diversification of their economies will allow for the diversification of their respective markets.
Accordingly, enacting laws and regulations by the GCC to limit the amount of oil MENA countries can export will heavily affect the mindset of the leaders of these countries to think of different ways to achieve income. This may cause a time of economic downturn as the countries start to adapt to the new markets that are being captured but will eventually lead to something that is beneficial for multiple parties. The economic downturn will really allow leaders to see how they need the diversification of their markets and how unsustainable their economies really were. However, the future benefits out way the time in the economic downturn. Moving away from the oil and gas industry is paramount in having an economy that can survive in times of strife. Within these markets, we could see another problem start to be tackled and that is labor force participation within the region. Many countries have a large portion of the younger generation that is not motivated to go into the workforce as they see public sector jobs, surrounding oil and gas, that are easily accessible to them. The trade that I am encouraging will lead young people to venture into the private sector to seek success in an emerging market.
Admittedly having countries come to understand their problems will allow for a more natural transition, but would this transition really come about? Probably not, countries need laws or regulations to help implement the change that will be necessary to achieve economic sustainable development. These countries are still relativity new in the context of the world yet are still achieving new heights that other developed countries have yet to achieve. I want to see the development of the MENA region and see it continue to grow.
