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The Middle East and the International Economy

  • Rodney Wilson

Abstract

During the 1970s the Middle East has experienced a trade boom and has become the world’s fastest growing import market. The recent world recession, which was largely caused by the oil price rises of 1974, ironically only marginally affected the Middle East, which was the one region of the world where business was brisker than ever before. Of course, to a large extent it was in fact the rise in oil revenues that created the boom conditions, and this more than offset the reductions in the volume of oil output caused by the recession in demand in the industrialised world. Despite the tremendous increase in revenue, it is perhaps strange that trade has nevertheless grown so much, given the desire of most of the countries involved to become less dependent on economic links with the outside world and given the widespread encouragement of diversification through import substitution. This trade growth was not surprising, however, since, with the vast increase in oil revenues, the recipient countries were naturally keen to embark upon ambitious development plans. These inevitably entailed a huge increase in imports because domestic substitutes were not available.1 Most governments believed that this strategy would be preferable in the long term, because eventually, as domestic production capacity increased, dependence would lessen.

Keywords

Saudi Arabia Middle East Export Price Special Draw Special Draw Rights 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Chapter 6

  1. 11.
    For earlier details of relative trade positions, see J. D. Coppock, Foreign Trade of the Middle East (A.U.B., Beirut, 1966 ).Google Scholar
  2. 12.
    Also Lee E. Preston, Trade Patterns in the Middle East ( American Enterprise Institute for Public Policy Research, Washington, 1970 ).Google Scholar
  3. 13.
    The emergence of these imbalances is described by Galal Amin, The Modernization of Poverty (E. J. Brill, Leiden, 1974 ), Chapter 1.Google Scholar
  4. 15.
    The most up-to-date account of OPEC operations is given by Mana Saeed Al-Otaiba, O.P.E.C. and the Petroleum Industry (Croom Helm, London, 1975), Part 2 especially.Google Scholar
  5. 16.
    Michael Field, One Hundred Million Dollars a Day ( Sidgwick and Jackson, London, 1975 ).Google Scholar
  6. 18.
    For details of Iran’s early negotiations with the companies see Jahangir Amuzegar and Mohamed Ali Fekrat, Iran: Economic Development under Dualistic Conditions (University of Chicago Press, 1972), Chapter 3.Google Scholar
  7. 19.
    Rodney Wilson, Industrialization and Foreign Capital (Focus Research Report on Egypt, London, 1974), p. 15ff.Google Scholar
  8. 20.
    Z. Y. Hershlag, Economic Structure of the Middle East (E. J. Brill, Leiden, 1975), Chapter 11 deals with defence expenditure.Google Scholar
  9. 21.
    Unless it results in the establishment of a local armaments industry. See L. Lockwood, ‘Israel’s Expanding Arms Industry’, Journal of Palestine Studies, Vol. 1, No. 4 (1972) 73–91.CrossRefGoogle Scholar
  10. 22.
    In addition, remittances from Algerians in France help. See M. Guillon, ‘Les Repatriés d’Algèrie dans la Région Parisienne’ Annales de Géographie, Vol. 83 (1974), pp. 644–75.CrossRefGoogle Scholar
  11. 26.
    As well as in financial journals. See, for example, Robert Z. Aliber, ‘Oil and the Money Crunch’, National Westminster Bank Review (February 1975).Google Scholar
  12. 27.
    Jan Tumlir, ‘Oil Payments and Oil Debt in the World Economy’, Lloyds Bank Review (June, 1974 ).Google Scholar
  13. 28.
    Gerald A. Pollack, ‘Are the Oil Payments Deficits Manageable’, Princeton Essays in International Finance, No. 111, International Finance Section, Princeton University, (June 1975).Google Scholar
  14. 29.
    For a useful background study of Saudi Arabia which throws light on its capacity to import, see Ramon Knauerhase, The Saudi Arabian Economy ( Praeger, New York, 1975 ).Google Scholar
  15. 31.
    This interdependence is stressed by Abdlatif Y. Al-Hamad, International Finance: An Arab Point of View (paper published by Kuwait Fund for Arab Economic Development, October 1974 ).Google Scholar
  16. 33.
    Robert Triffin, ‘The Case for Demonetization of Gold’, Lloyds Bank Review (January 1974), p. 1ff.Google Scholar
  17. 35.
    For an Arab point of view see Abdlatif Y. Al-Hamad, Arab Capital and International Finance ( Kuwait Fund for Arab Economic Development, November 1973 ).Google Scholar
  18. 37.
    Though his concern since leaving Egypt has been West Africa rather than the Middle East. See Samir Amin, Neo Colonialism in West Africa (Penguin, London, 1973 ), Introduction, p. XIVff.Google Scholar

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© Rodney Wilson 1977

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  • Rodney Wilson

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