This week, I resume looking at the Middle East based on the presentation I did last July at the UWI Open Campus in St Vincent. I thank those who commented and offered their critique on the first part in my column two weeks ago.
As I pointed out in that column, the Middle East can be characterized as having several extremes. These extremes are very evident in the wealth of the region. The economy of the Middle East is diverse. Individual economies range from hydrocarbon exporting economies to government-led socialist economies,to free market economies.
Collectively, the region is best known for producing and exporting oil. The oil industry significantly impacts the entire region, both through the wealth that it generates and through the movement of labour. Most of the countries in the region have undertaken efforts to diversify their economies in recent years.
Qatar and United Arab Emirates (UAE) are the two richest nations in the Middle East and North Africa (Mena) region. The Credit Suisse Research Institute, in its sixth annual Global Wealth Report, reports: “The Mena region is home to 330,000 millionaires, up by more than 240 per cent since 2000. By 2020, the millionaire population in the region is forecast to reach 500,000, up by another 52 per cent.”
In terms of how much fortune Mena residents have acquired, Qatar ranks first, with the average wealth per adult pegged at $157,000 in mid-2015, rising by 0.8 per cent from the same period the previous year. Qatar also ranked 21st globally in terms of per capita wealth, up from the 29th position in 2000. The second-richest country in the region is the United Arab Emirates, where the average wealth per adult is pegged at $144,400.
The millionaire population in the UAE, which currently stands at 59,000 adults, is expected to grow by 62 per cent to 96,000 in 2020. Not far behind is Kuwait, where the average wealth per adult is estimated to be around $113,400. In Bahrain, private wealth per adult dropped by 0.3 per cent, while in Saudi Arabia, the figure rose by 0.9 per cent to reach $39,500.
Saudi Arabia has 18 per cent of global oil reserves, the second highest in the world. The oil-rich countries in the Middle East include Iran, Iraq, Syria, Kuwait, Saudi Arabia, Bahrain, Qatar, United Arab Emirates (UAE), Oman, and Yemen.
Together, they have an area of 5.1 million square kilometres or about 3.4 per cent of the earth’s land surface, but they possess, according to BP’s 2012 Statistical Review of World Energy, 48 per cent of the world’s known oil reserves and 38 per cent of natural gas reserves.
According to current estimates, more than 80 per cent of the world’s proven oil reserves are located in OPEC member countries, with the bulk of OPEC oil reserves in the Middle East, amounting to around 66 per cent of the OPEC total. OPEC’s proven oil reserves currently stand at 1,206.00 billion barrels.
But with that much wealth there is equally much poverty. Egypt, Yemen, Palestine, Iraq and Syria now have staggering numbers in poverty. Twenty one percent of the Iraqi population is currently living on less than US$2 a day. In Yemen, that number is more than 37 per cent. The list goes on from Syria to the West Bank. And the numbers are increasing.
The economies of the region are undoubtedly tied to the political establishments. Most of the wealth is controlled by the ruling families and extended relations. How this wealth is distributed in the countries that do possess great amounts also widely differ.
Countries like Saudi Arabia, UAE and Qatar are ruled by monarchs. The wealth is in the hands of the ruling elites but they have over the years ensured that their citizens have had a share of the pie in getting access to some of wealth, even if they don’t get political access. Some citizens undoubtedly get more access than others and it is near impossible for outsiders to get citizenship.
Nevertheless, many foreigners have gravitated to these rich capitals in search of lucrative employment. In several of these oil rich countries, foreign labour outstrips the local population. From top executives to domestic help, one will find foreigners in all sectors of the economy. And this is where the great disparities among the inhabitants occur between the wealthy citizens and the not so wealthy majority foreign labourers.
We are well aware of the stories that come out of these countries about issues relating to the abuse of foreign labour. These are sad realties that must be addressed and usually only addressed when the media highlight them. But equally there are many success stories of persons, perhaps in the thousands, who have done well in spite of the challenges. They have been able to repatriate their earnings in such quantities that have sustained the economies and livelihood of many families in poverty-stricken countries and places in Asia and the Pacific.
I made the point in my presentation and I will speak more to it in a later column of the many Caribbean nationals who have done well working in such lucrative markets in the Middle East.
Syria from all reports was self-supporting and self-sustaining in food production and in industry. All before the current civil war which has ripped the country apart and caused so much pain and suffering.
The Middle East, with its tremendous wealth,for all intents and purposes can be described as the playground for the superpowers of world. During the Cold War, the battle was between the United States and the former Soviet Union as to which one would control the countries of the Middle East. Today that battle continues with the US and Russia, the political successor of the Soviet Union, still vying for political and economic control.
And, sadly, that wealth which should be driving advances in science, learning and technology in the region and assisting the poorer nations of that same region out of poverty, is instead largely tied up in the buying of arms.
Saudi Arabia was the top purchaser of American-made arms from 2011-2015, followed closely by the United Arab Emirates, according to research compiled by the Stockholm International Peace Research Institute (SIPRI), which has been analyzing international arms transfers since 1968.
Forty per cent of US arms exports go to the Middle East. US revenue from Middle East weapons sales topped $30 billion last year. The country with the world’s biggest defence sector sold weapons and military supplies worth $30 billion to the Middle East in the past year in sales approved by the U.S. State Department.
According to data collected from the U.S. Defence Security Cooperation Agency, most American weapons sales were completed with countries in the Gulf Cooperation Council (GCC) including Saudi Arabia, UAE, Bahrain, Oman, Qatar and Kuwait. In addition to GCC countries, Iraq, Israel and Lebanon also acquired a substantial amount of arms and defence supplies from the U.S.
Russia also increased arms sales to Iran and Syria.
A lot of what we are witnessing today is the result of several significant events occurring in the Middle East over centuries and especially in the last century. I will delve deeper as I proceed in this series.
(Suleiman Bulbulia is a Justice of the Peace. Secretary of the Barbados Muslim Association and Muslim Chaplain at the Cave Hill Campus, UWI.