Economics & business in the Middle East
Diversification from fossil-fuel dependence faces immediate and long-term challenges.
The prospect of US shale oil production capping energy prices regardless of any extension of the OPEC/non-OPEC production-cuts agreement will keep fiscal pressure on regional oil exporters. Any further cuts in expenditure, reduction of subsidies and attempts to raise new taxes will only raise social tensions. Saudi Arabia's crown prince is proceeding apace with his social reform and economic diversification programme but it has left traditionalists and the private sector, on which success will ultimately depend, reeling. Meanwhile, Iran has lost hope in the prospect of a return to the international financial system and with it an influx of Western investment.
- Will the other Gulf Arab monarchies follow Saudi Arabia in economic reform?
- Can Iran juggle its intractable political tensions with the United States with its growing domestic economic unrest?
- Will social safety nets set up to offset subsidy cuts in countries like Egypt work?
- How well will the Syrian and Iraqi governments kick-start reconstruction after years of civil war?
Senior lecturer in International Political EconomyRegent’s University London
Associate Fellow, Middle East & North Africa ProgrammeChatham House