How Lebanon Has Weathered the Storm

by Nisreen Salti , Aslı Bâli
published in MER252

One would imagine that, of all the countries in the Middle East, Lebanon would be among the hardest hit by the global financial crisis. Famous for its weak central state and ferociously capitalist private sector, Lebanon has the closest thing to a free market in the region. It has a dollar-based economy that is highly integrated into global markets and is heavily dependent on the remittances of expatriates in the rich countries where the crisis came first. And the origins of the downturn in high finance would seem to augur especially poorly for Lebanon: The banking and financial sectors are the cornerstone of the country’s economy, and the banking sector relies on foreign and non-resident depositors.

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Making Big Money on Iraq

by Pete Moore
published in MER252

Kuwait has its diwaniyyas, Yemen its qat chews. But for languorous trade in rumor, gossip and flashes of political insight, there is no substitute for chain-smoking and eating Iraqi masgouf.

At one of several Iraqi establishments in Sharjah, a down-market cousin of Dubai in the United Arab Emirates, the host centered the bulging fish upon a table for six. “Iraq’s economy is like the fish,” he said, laughing. “How much you get depends on how quickly you eat.” It is an apt description of today’s Iraq -- the country’s patrimony is literally being divvied up and devoured.

Remittances and Development

by Sameera Fazili
published in MER252

The Middle East and North Africa have been hit hard by the global recession. Several of the oil-rich Gulf states are in the midst of an economic contraction, with their famed sovereign wealth funds having lost 27 percent of their value in 2008. The Gulf states, along with the European Union, buy most of the non-oil exports of the Middle East and North Africa, so recessions in the importing countries mean depressed trade throughout the region. According to the World Bank, the average growth rate for the middle-income states of Egypt, Jordan, Lebanon, Morocco and Tunisia, which have little or no oil, is projected to fall to 3.9 percent in 2009, far below the levels of the 2001-2008 boom.

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The Gulf Comes Down to Earth

by Kristen Smith Diwan , Fareed Mohamedi
published in MER252

Between the summer of 2008 and the beginning of 2009, oil prices plummeted from a high of $147 per barrel to a low of $33. This extraordinary reversal of fortune announced the end of the second oil boom for the countries of the Gulf Cooperation Council (GCC) -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates -- precipitated, of course, by the broader global financial crisis. How these oil-exporting countries will weather this dual economic challenge is a live question. From the time that the Gulf economies took off in 2003, there were growing worries that their rapid rise was a massive investment bubble built on high oil prices and cheap credit.

Locked In, Locked Out of Work

by Jennifer Olmsted
published in MER253

Article VI, Item 2 of the 1993 Oslo accords concluded between Israel and the Palestinians states, “After the entry into force of this Declaration of Principles and the withdrawal from the Gaza Strip and Jericho area, with the view to promoting economic development in the West Bank and Gaza Strip, authority will be transferred to the Palestinians in the following spheres: education and culture, health, social welfare, direct taxation and tourism.”