Intra-Regional Trade and Factor Mobility

  • Rodney Wilson


At first sight there appears to be tremendous scope for trade and commerce between the nations of the Middle East because, to a large extent, they complement each other with regard to their resources. Egypt, for example, with its plentiful manpower but lack of capital, is the natural centre for the supply of labour-intensive goods such as textiles or clothing for the whole region. Saudi Arabia, because of its abundant financial resources but labour shortages, is an obvious location for capital intensive industries, especially those requiring a plentiful supply of cheap energy, although the country’s technological deficiencies must first be overcome. In contrast Israel boasts a high level of technology and has a well trained workforce, but, like Egypt, has a great shortage of capital. It is therefore well suited to supply the whole region with technologically advanced goods, such as machine tools or electronic equipment. Iran, with its long craft tradition, could similarly be the main centre in the Middle East for the production of high-quality consumer products including furniture, clothing, and possibly footwear, particularly for the higher-income end of the market.1


Saudi Arabia Middle East Arab Country Factor Mobility Trade Diversion 
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Chapter 5

  1. 1.
    The case for regional economic integration in the Middle East is similar to that for other areas of the Third World. For an appraisal of the general issues involved see R. F. Mikesell, ‘The Theory of Common Markets and Developing Countries’, in Peter Robson (ed.), International Economic Integration (Penguin, 1971 ), Chapter 9.Google Scholar
  2. 2.
    This point was stressed by David Garrick, ‘Regional Integration and Economic Development in the Middle East’, Middle East Affairs, Vol.xii, No. 9 (1961) 294–300.Google Scholar
  3. 3.
    Problems of economic integration in the Gulf are dealt with by Saad Andari, Kuwait: Developing a Mini Economy, M.A. Thesis, University of Durham, 1975.Google Scholar
  4. 6.
    The most comprehensive account of the operation of the Arab Common Market is given by Albert Musrey, An Arab Common Market ( Praeger, New York, 1969 ).Google Scholar
  5. 7.
    For a critical account of the operation of the market, see Z. Y. Hershlag, Economic Structure of the Middle East (E. J. Brill, Leiden, 1975 ), Chapter 12.Google Scholar
  6. 9.
    See Rouhollah Ramazani, The Middle East and the European Common Market (University Press of Virginia, 1964), Chapters 6 and 7 especially.Google Scholar
  7. 10.
    See Galal Amin, The Modernization of Poverty (E. J.Brill, Leiden, 1974) p. 28ff.Google Scholar
  8. 15.
    For a brief account of recent trends in education in the Arab world, and the productiveness of investment in education, see Galal Amin, The Modernization of Poverty (E. J. Brill, Leiden, 1974), p. 61ff.Google Scholar
  9. 16.
    An introduction to the literature and a bibliography is given by G. M. Meier, Leading Issues in Economic Development (Oxford University Press, 1971), p. 313ff.Google Scholar
  10. 17.
    See Shimeon Amir, Israel’s Development Co-operation with Africa, Asia and Latin America ( Praeger, New York, 1974 ).Google Scholar
  11. 18.
    An interesting study of the West Bank economy has recently been published. Vivian Bull, The West Bank—Is It Viable? ( Lexington, Massachusetts, 1975 ).Google Scholar
  12. 19.
    See, for example, H. W. Richardson, Elements of Regional Economics (Penguin, 1969 ).Google Scholar
  13. 20.
    Kamal Sayegh, Oil and Arab Regional Development (Praeger, 1968), Chapter 7.Google Scholar
  14. 21.
    Rodney Wilson, ‘Caught in Trap over Soviet Debt’, The Times Supplement on Egypt, 5 November 1975.Google Scholar
  15. 23.
    The most comprehensive account of the Fund’s operations is provided by Robert Stephens, The Arabs New Frontier: A History of the Kuwait Fund ( Temple Smith, London, 1973 ).Google Scholar
  16. 24.
    An introduction to techniques of project appraisal is given in G. M. Meier, Leading Issues in Development Economics (Oxford University Press, 1970), p. 340ff.Google Scholar
  17. 27.
    This body was sponsored by the Kuwait Fund. See Z. A. Nasr, The Kuwait Fund Scheme for the Guarantee of Inter Arab Investments (K.F.A.E.D., May 1972 ).Google Scholar
  18. 28.
    Also, Abdlatif Y. Al-Hamad, Building up Development Orientated Institutions in Arab Countries ( K.F.A.E.D., October 1972 ).Google Scholar
  19. 28.
    A point even the Director of the Kuwait Fund admits. See A. Y. Al-Hamad, Investing Surplus Oil Revenues ( K.F.A.E.D., April 1974 ).Google Scholar
  20. 29.
    See Bill Hale and Julian Bharier, CENTO, R.C.D. and the Northern Tier Middle Eastern Studies, Vol. 7, Part 3 (1972).Google Scholar

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© Rodney Wilson 1977

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  • Rodney Wilson

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