CRIAC 2010/2011 International Relations Theory

Second Paper, Chapter 12
“How oil abundance has affected development in the Middle East and North Africa”

Charline Burton 13/11/2011

Second paper “How oil abundance has affected development in the Middle East and North Africai ”
The abundance of oil in the Middle East and North African (MENA) had as a result a development that is characterized by an economy dominated by oil exportations; over‐evaluated fixed exchange rate regimes to promote importations; autocratic political regimes and poor governance and weakness of the civil society. However, for some oil‐titans countries, a change is underway towards more diversification of the economy. The MENA countries are the world’s dominant supplier of energy, including oil. Its large oil fields were first developed under colonial rule. Except for Iran, Israel and Turkey, the Middle East countries are mainly Arabs, and are ruled either by a traditional king or emir monarchy, or by autocratic republics. When those countries acquired independence in the 1960’s, these political elites decided to focus almost exclusively on oil instead of developing a sustainable diversified economic system that could benefit the entire population. MENA oil producer countries therefore built their economy mainly on oil exportation, following de facto or formal fixed over‐evaluated exchange rate regimes. With the industrialization of the rest of the world and the growing demand of oil, the oil producer countries’ GDP climbed to the highest summits, becoming amongst the richest nations in the world. In the early 1980’s, Lybia’s GNP per capita was higher than the one of countries such as Italy or Spain. Today’s GDP in Abu Dhabi, one of the UAE emirate, is USD 68,000 ii (while USD 47,000 for Belgium iii ), one of the top‐three in the world. But those countries are a