The Middle East and the Role of Economics

Why economics needs to be better integrated into policymaking in the Middle East.

By Nicole Muzzy

If Iran closes the Strait of Hormuz, how will Saudi Arabia and other Gulf states react? What Middle Eastern country is next to have a revolution? What motivates terrorists? How should U.S. policymakers respond in each case? The answers to these questions require comprehensive and innovative analyses. Scholarship in Middle East affairs is traditionally performed either through cultural studies or security studies. Unfortunately, few academics, and even fewer policymakers, focus on the role of economics. Cultural and security studies tend to ignore the economic motivations of regional actors and how those motivations are frequently elevated above other considerations. The inability to define and implement successful policies in the Middle East often results from the fundamental misunderstanding and neglect of the region’s political economy.

Even in the Middle Eastern states that are most strictly governed by religious authority, leaders base many important foreign policy choices on economics rather than on culture. The ultra-conservative Islamic tradition of Wahabism helped create Saudi Arabia, the United States’ largest regional trading partner. At the same time, Wahabism has not determined the political priorities of Saudi Arabia’s rulers. This is exemplified by their continued partnership with the United States despite its support for Israel, which they morally oppose. The historical rift with the co-religionist Hashemites was largely based on economic competition, which included territorial acquisition and control of Mecca’s tax revenue. This prioritization helps explain how Saudi Arabia’s founder King Abdul Aziz ibn Sa’ud conquered the peninsula and the attentions of U.S. oil prospectors. This is also characteristic of policymaking throughout the Arabian Peninsula; in many cases, economic concerns overpower the similar religious interests and values of neighboring states. It follows that these countries would react negatively to an attempt by Iran to close the Strait of Hormuz - a vital route for their imports and exports - even though Iran is an Islamic state.

Popular sentiment is guided by economic concerns as well. Not coincidentally, one of the most famous photographs from last year’s Egyptian protests was of a man with baguettes taped to the sides of his head. “Arab Spring” protesters throughout the region cited unemployment, poverty, and high food prices as revolutionary motivations. The Middle East and North Africa region is overwhelmingly young, with 60% of the population under the age of 30. In Tunisia, where the revolutions began, more than 30% of high school graduates are enrolled in 4-year colleges. Populations in Gulf countries share the same characteristics, although they have very high per capita income. The importance of economic stability helps to explain why many of the now deposed Arab rulers were able to stay in power for decades, and why autocrats still rule the more wealthy Gulf states. The next revolution in the region is most likely to occur in a state with a bad economy, in addition to having a despotic ruler.

Dissatisfaction with the state of international economics also served as a partial motivation for Al-Qaeda’s attacks on the World Trade Center, both in 1993 and again in 2001.Trade and finance issues are not the most obvious motivations for terrorist groups, but they are fundamentally important and must be acknowledged. Increased international trade and globalization has helped starkly contrast the West against the less-industrialized countries of the Middle East. Frustration with the unfair nature of global economics has compelled many newly industrializing states and non-state organizations to resent the United States. For much of the twentieth and twenty-first centuries, U.S. involvement in Middle East has been perceived as economic exploitation.

Cultural and security studies will likely continue to constitute the core of regional scholarship, but change is needed. The Middle East cannot be understood by only studying regional culture, government systems, and the prevention of terrorism. Traditional approaches will not fully answer the questions I posed in my introduction. Political economy must garner more attention from academics and policymakers. If economics is better incorporated into Middle East studies, better policies will be more readily developed. In turn, if the region’s economic concerns are better addressed, we will see a more secure and U.S.-friendly Middle East.

Nicole Muzzy is pursuing her MA in International Affairs at George Washington University’s Elliott School of International Affairs where she concentrates on the Middle East and international economics.

Photo courtesy of ¡Carlitos via Flickr.

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