Import Substitution

  • Rodney Wilson


In recent years most of the countries of the Middle East have become increasingly aware of the difficulties associated with relying on export trade as the main ‘engine of growth’. The pricing and production limitations faced by the leading agricultural producers in the area have just been discussed in the previous chapter. Even in the oil-producing states, however, there is a growing realisation that overdependence on the export of one commodity makes them extremely vulnerable to changes in world market conditions. It is true of course that the oil-producing nations have been successful in organising themselves into a cartel to control supplies through OPEC in a way that no group of agricultural producers has been able to emulate.1 Without the political will to agree amongst the Arab members that the October 1973 war and its aftermath provided, it seems unlikely that OPEC would have been so successful in raising the price of oil. Throughout the decade before this war, the price of oil had been falling in real terms, and the terms of trade of the major producing nations had been deteriorating. Since the price rises of 1974 this downward trend is again apparent, as the limited price rises agreed in September 1975 have not compensated the OPEC producers for the increased prices that they have to pay for imports of industrial goods from the West.


Saudi Arabia Middle East Capital Good Industrial Output Import Substitution 
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Chapter 3

  1. 1.
    For detailed information on how this was achieved see Fuad Rouhani, A History of O.P.E.C. (Praeger, 1971), Chapters 1–4, 15 and 16 especially.Google Scholar
  2. 2.
    A critical account of Saudi Arabia’s economic progress is given by Fred Halliday, Arabia Without Sultans (Penguin, 1974), Chapter 2.Google Scholar
  3. 3.
    Z. Y. Hershlag, Economic Structure of the Middle East (E. J. Brill, Leiden, 1975). Chapter 3 is on the economic interpretation of Arab socialism.Google Scholar
  4. 4.
    Jahangir Amuzegar and M. Ali Fekrat, Iran: Economic Development Under Dualistic Conditions (University of Chicago Press, 1971 ), Chapter 2.Google Scholar
  5. 5.
    The latest book on Egypt is by Robert Mabro, The Egyptian Economy (Oxford University Press, 1974). Chapter 8 deals with structural changes in the economy.Google Scholar
  6. 7.
    Israel’s development performance is assessed by D. Horowitz, The Enigma of Economic Growth: A Case Study of Israel ( Praeger, New York, 1972 ).Google Scholar
  7. 9.
    See Rodney Wilson, Industrialization and Foreign Capital, ( Focus Research Report on Egypt, London, 1974 ).Google Scholar
  8. 15.
    Hassan El Saaty and Gordon K. Hibabayashi, Industrialization in Alexandria, American University at Cairo, 1959.Google Scholar
  9. 16.
    K. M. Barbour, The Growth, Location and Structure of Egyptian Industry ( Praeger, New York, 1972 ).Google Scholar
  10. 17.
    P. K. O’Brien, The Revolution in Egypt’s Economic System (Oxford University Press, 1966 ).Google Scholar
  11. 19.
    Rodney Wilson, The Times Supplement on the Arab Renaissance 20 March 1975.Google Scholar
  12. 24.
    Walter Elkan, Iran’s Human Resources ( Focus Research, London, 1974 ).Google Scholar
  13. 25.
    For an account of industrialisation trends see R. G. Looney, The Economic Development of Iran 1959–1981 ( Praeger Special Studies, New York, 1974 ).Google Scholar
  14. 26.
    Diversification in these fields is discussed by J. P. C. Carey and A. G. Carey, ‘Industrial Growth and Development Planning in Iran’, Middle East Journal, Vol. 29 (1975), pp. 1–15.Google Scholar
  15. 27.
    Though Iran historically has boasted a high level of skill. See Charles Issawi, The Economic History of Iran 1800–1919 (Centre for Middle Eastern Studies, University of Chicago, 1971 ).Google Scholar
  16. 28.
    H. B. Chenery, ‘Patterns of Industrial Growth’, American Economic Review, September 1960, pp. 624–54.Google Scholar

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© Rodney Wilson 1977

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  • Rodney Wilson

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