Brunei economy: Nothing much to worry about.

A small country soaked in oil and natural gas, enjoying the highest per capita GDP in the world, that’s Brunei. Among the richest countries in the world with its citizens enjoying all the goodies of the modern world, from free education to medical facilities, and everything in between subsidized. And it’s Monarch considered the richest person in the world, with a personal fortune said to worth upwards of USD 20.00 billion. Quite a few superlatives!

The oil and gas sectors contribute over half of the GDP of the country, and earn over 90% of its exports revenues. Nearly 60% of the labor force is engaged in industry, followed by the services sector that provides jobs to 33% of the labor. Agriculture is a minor but important activity, contributing about 4.5% to the GDP.

The country produces rice, vegetables, and fruits, primarily for domestic consumption. Livestock breeding including water buffalo, takes care of a part of the domestic requirements, and the rest is met through imports, mainly from Australia. Apart from the oil and gas industry, construction, perhaps inevitably, is the second major industry. The industrial production growth rate is around 2%.

While Brunei exports oil and gas, it imports all kinds of consumer goods, capital goods, chemicals, foodstuffs, etc. Japan, Australia, U.K., Malaysia, etc., are it’s major trading partners.

The fall in the international prices of oil have affected Brunei economically, but with a low population and high revenues, the impact has been minimal. With a low inflation rate and a manageable rate of unemployment, there are no serious implications for Brunei on account of the global economic problems.

On its part, the Government is taking steps to alleviate the problems of unemployment, and to develop the Banking and Trousim industries, in order to broadbase the economy.

Bahrain economy: Cruising along.

A tiny Island off the Saudi Arabian coast, and linked to Saudi Arabia via the famed causeway, an engineering marvel in the sea, Bahrain has come a long way from its nomadic past.

With oil came prosperity, which was, by and large, invested wisely, to create an economic base for the future progress of the country. The oil industry continues to dominate the economy, contributing over 10% to its GDP, 60% of its exports revenues, and over 70% to the Government kitty. It is also the major source of employment for the workforce.

The GDP of Bahrain has been running at a steady rate of 6.5% in 2007, 6.1% in 2008, and expected to be around 6% in 2009. The inflation rate is around 7%, and industrial production growth rate is about 5%. Bahrain is the only Gulf State to have a Free Trade Agreement(FTA) with the United States. Bahrain also scores high on the Heritage Foundation Index of Economic Freedom. For the year 2008, Bahrain was reported to be the 19th freest economy in the world.

Among the major economic activities of the country, apart from the oil and gas industry, are other industries like aluminium, the Banking and Financial Services, including Islamic Banking, and the contruction industry. Bahrain is making special efforts to develop the Island as an international financial center, especially for Islamic Finance and Banking.

It is noteworthy that the Bahraini Banking and Financial services industry has not suffered the same fate as its Western counterparts, mainly because it does not have exposure to toxic assets, and is better regulated.

The problems facing Bahrain in the long run, relate to the depletion of its oil and natural gas reserves, and the social problems resulting from a huge expatriate population.

Yemen economy: Trailing behind the rest.

Think of the Gulf, and you visualize super-rich Kingdoms and Emirates awash with oil wealth, and abuzz with multi billion dollar projects, moving and shaking the international economic system.

Not so Yemen, the poor cousin of the richer Gulf states in the Middle East, like Saudi Arabia, Kuwait, etc. According to a recent study, nearly one third of Yemenis endure chronic hunger, and 35% of the population lives below the infamous poverty line. And an equal percentage of the workforce is unemployed.

Quite ironic, given the fact that its other Gulf cousins are deficient in labor and import them in large numbers. As a matter of fact, hundreds of thousands of Yemenis work in the Gulf states, remitting over a billion dollars every year. In fact, that is the major source of revenues to the country, with oil revenues, as such modest, coming down further, on account of the fall in oil prices. The per capita income of the country is abysmally low compared to its richer cousins in the Middle East.

Poverty, unemployment, illiteracy, etc, the standard features of the least developed countries, are to be found in Yemen. With inflation running in double digits, it is an uphill task for the population to maintain a reasonable lifestyle.

Yemen is a modest producer of oil, though its gas reserves are considerable, though unexploited. Among the major agricultural produce of the country is coffee, cotton, wheat, sugar, etc. Yemen exports coffee, cotton, refined oil, sugar, processed fish, etc., and imports a wide array of consumer products, industrial machinery, foodstuffs, etc.

Recently the World Bank, in its quarterly study of the Yemeni economy projected a GDP growth rate of 7.7%. The development process in Yemen can take off and be sustained in the long run by integrating its economy with the Gulf economies, and attracting investment from them for infrastructure projects, and other projects that can earn foreign exchange for the country, while generating employment.

Syrian economy: Slower growth forecast.

The Syrian economy that has been growing at a decent pace over the years has taken a hit in 2008-09 on account of a combination of a drought, and shortage of electricity and water, apart from the negative effects of the global recession.

As such Syria is under economic sanctions by the United States for the last five years, and faces several hurdles in conducting free trade with the world at large, especially the West.

The Syrian economy is very much a state subject, though the country is slowly opening up to the world. The country does attract hordes of tourists from all over the world who are attracted to the ancient land and its civilization, and the historic monuments that dot the landscape. Tourism is a major foreign exchange earner, and the country also exports crude oil, phospates, cotton, fruits, etc. It imports foodgrains, metals, machinery, etc.

As for the economic outlook for the country, it expects a GDP growth of 5.1% in 2009. According to a study of the IMF, the Syrian economy is expected to grow at a slower pace compared to its other peers in the Middle East. The country’s inflation rate is 15.4%, and unemployment is hovering around 9%.

The sever drought, now in its third year, has led to a fall in food grain production, especially wheat, the staple. Further, remittances from Syrians working abroad are also coming down.

To counter this situation, the Syrian Government is encouraging economic liberalization, inviting foreign investment, especially from the Gulf states. However, unless the country provides the necessary infrastructure, it may not be able to attract the right kind of foreign investment. For instance, the major portion of foreign investment that has come so far, is said to have gone into the real estate sector, which has grown faster than the other sectors.

Given the increasingly liberal approach of the Syrian Government to the issue of economic development, there is hope that the future holds better promise for this ancient land and its people.

Qatar economy: Rising star of the Middle East.

The small and over-prosperous Arabian Gulf State of Qatar has ambitious plans to reduce its dependence on hydrocarbon income, primarily, liquefied natural gas, to zero by the year 2020. Presently, it is the world’s largest producer and exporter of LNG.

Revenues from this precious resource(LNG), have been invested into building up an infrastructure for the future development of the country, and also reduce dependence on oil based revenue streams. In the year 2008, the country boasted a per capita GDP of USD 68,467.00 that was the highest in the world. The country continues to embark upon projects and initiatives that is aimed at retaining this level, and increasing it further.

The current global economic crisis has had an impact on the Qatari economy, with revenues down, but the adverse impact has been minimal, essentially in the form of a slowdown, that is likely to set back the time frame to achieve the set goals by a couple of years, according to official sources.

Qatar is encouraging foreign participation in its economic development, as much as it is interested in investing abroad in a range of opportunities, with the aim of creating a reserve and surplus for the future, as well as reducing its dependence on oil based revenues.

The country has been also active in internation fora, and is trying to build up an image of a moderate and a modern state in the Middle East, to act as a bridge between the West and the Gulf. It is an ambitious country with a budget and resources to match. The finesse with which the Qatari establishment handles the developing situations will determine the country’s level of success as an emerging leader in this part of the world.

Jordan’s economy on a weak wicket.

One of the poorer countries in the Middle East, going by the standards of other nations like Kuwait, the UAE, etc., Jordan is nevertheless, rich in history with the ancient ruins of Petra drawing hundreds of thousands of tourists from all over the world every year.

This year though, the tourist arrivals have fallen, owing to the tough economic conditions in much of the Western world that sends a good part of the tourist traffic to Jordan. Coupled with this is the drastic fall in the offtake of Jordan’s goods and services from neighboring Iraq, that is under the occupation of its “good friend” America. And adding to the economic woes, is the fall in the remittances of Jordanians working overseas, as they return home, due to the downslide in the economic forturnes of their host countries in the Middle East.

Jordan is not an oil rich country, though it has a fairly developed petroleum refining industry. The major economic activities of the country relate to mining of phospate, potash, chemicals amd tourism. With imports at more than double its exports, the country suffers a trade imbalance that is difficult to bridge. Unemployment is a major problem for the country, and increasing with expatriates returning home in large numbers. High inflation and unemployment have led to a dangerous situation that may go out of hand, given the right provocation.

All in all, it appears to be a rough ride ahead for the Jordanian economy, though it can expect a liberal dose of Western, especially, American grants, as in the past, to provide a cushion against economic hardship.

The Jordanian Government, which essentially means the Monarch, has a delicate task on its hand, having to balance a potentially combustible potpourri of economic slowdown, increasing unemployment, a restive youth, and the perennial political instability in the region impacting on the domestic situation.

Egyptian economy faring well.

Belying fears of an economic slowdown, the ancient land of the Pharaos has proved its resilience in weathering the economic storm blowing throughout the world, just like it has been taking desert storms in its stride over the centuries.

Even though Egypt is expected to grow much slower this year than in fiscal 2008, when it recorded a highly commendable growth of 7%+, it is still considered a decent level of growth, given the ground realities on the global economic front. For the record, the country has clocked a growth in the GDP of around 4.70% in the current fiscal, upto the June quarter. Overall growth rate for 2009 is expected to be 5.50%.

The major part of the growth story of Egypt, is related to the Information Technology and Communications sector, a bit surprising that, and followed by the construction sector. That apart, domestic consumption has played a vital supporting role in boosting the economy. And the Banking sector is happily placed, without toxic assets to contend with, and has maintained a decent level of growth with its conservative lending and investment policies.

On the downside, all the major contributors of revenues to the country’s treasury viz, Suez Canal, Tourism, FDI, and overseas remittances, etc. were down, chopping off a few decimal points from the growth figures.

The Egyptian Government, on its part, is realistic enough to understand that, the global economic crisis is bound to have its effect on its economy, and is preparing to initiate a stimulus package, said to be in the range of USD 2.00 billion. The money is to go into a slew of infrastructure projects that is expected to have a beneficial effect on the other sectors, thereby pulling up the economy a few points.

Unrealized potential of the Libyan economy.

The North African state of Libya, one of the largest producers of oil, the liquid gold, had burst on the international scene in the early 60’s after the discovery of oil, as a nation with great potential for economic development, not only of itself, but also for other countries in the region.

With a low population count, and high income from oil, it was expected to move rapidly up the economic ladder. Even though sincere efforts were made at the top level, the bureaucracy driven economy does not appear to have made much headway in the last thirty years.

Oil has been the mainstay of Libya’s economy, even though attempts at diversification of investment and production have not succeeded as per plans. The major reason given for this failure is the supposedly corrupt and inefficient bureaucracy. Of course, the drop in oil prices has badly hit Libya’s revenues. And coupled with the global recession, it has had a doubly severe effect.

The Libyan Government has been engaged, rather vainly, in the last few decades, to push the economy into the top bracket, but its confrontation with the West resulting in United Nations sanctions, had an adverse effect on Libya, in many ways, contributing to economic stagnation. With little agricultural activity, and mostly imported food and equipment, the foreign exchange kitty of the country is also under stress.

Libya had allocated about USD 75.00 billion for various infrastructure projects under its strategic plan for the period 2008-2012, but it is not sure how much of this allocated fund would be actually spent, in view of the fall in oil revenues, and the increasing import bill of the country.

The Libyan leader Muammar Gadhafi may have to really start a “revolution against corruption” to get things going in Libya towards economic prosperity.

Sudan: The black giant struggles to rise and shine.

Bilad as Sudan. The land of the Blacks. A vast country with hidden potential and promise of prosperity. Sudan is one of those countries whose potential remains untapped and unexploited because of persistent internal disturbances, and unwarranted external interference from interested quarters.

Sudan is one of the countries on the U.S. hit list as a “state sponsor of terrorism” (whatever that means!), that disqualifies it from accessing American in particular, and Western in general, technology and aid freely, and creates all sorts of hurdles in it’s path towards economic progress and prosperity.

Compared to it’s neighbors, Sudan has recorded a decent average growth of 7% to 8% in the last few years, and is expected to notch up % growth in the current fiscal according to official sources.

The major source of revenues for this African giant are from oil that contributes over 50% of its revenues, though livestock and related products are gaining in importance as a contributor to the national kitty. In fact, the Sudanese Government is keen to develop this sector in a big way to take advantage of the vast expanse of land available to it, to develop this activity.

Sudan recently drafted the International Monetary Fund to monitor and report on its economic performance and policies in order to achieve the objective of sustained economic growth, macro economic stability, and rebuilding foreign exchange reserves.

According to the IMF, the major reasons for a fall in Sudan’s revenues is the fall in the oil prices, and it’s penchant for intervention in the foreign exchange markets in order to conserve precious foreign exchange, among other things.

On its part, the Sudanese Government holds the sanctions regime against it to be mainly responsible for its economic troubles, though at the same time, it also points that this very fact has insulated Sudan from the worst effects of the global economic recession.

Qatar, the nimble footed player.

Qatar, the oil and natural gas rich state in the Arabian Gulf, is a nimble footed operator that seizes opportunities as they come along, and capitalizes on its strength in the process.

One of the fastest growing economies in the Gulf region, it is also not lagging behind on cornering international glory through its proactive role in international affairs. The Doha Round of the WTO talks was a highlight and a feather in the cap of the ruling establishment in Qatar.

The country has been quite aggressive in diversifying its income sources away from its traditional oil and natural gas base, to industry, commerce, tourism, etc. However, much needs to be done in these areas. As a matter of fact, the Government has taken an active part in all matters of economics, commerce and industry, while encouraging the private sector to play their part in the process.

However, like other countries not directly responsible or connected with the global economic crisis, Qatar has also had to face its share of problems on the economic front. Even though the Banking sector has been doing quite well, with 2008 being a golden year, the Government has had to intervene in the sector, imposing certain restrictions, in order to restore public confidence, and avoid the spread of a negative sentiment, affecting the markets.

A special mention needs to be made of the Islamic Banking sector that has done really well, crisis or no crisis, and has remained practically immune from the virus of toxic assets affecting their conventional cousins in the western world. This is mainly because of their ethical business practices, and avoidance of highly risky and unethical business practices and wheeling and dealing. As a result, the conventional Banks, in large numbers, have been going in for the establishing Islamic Banking subsidiaries to face the troubled times better.

The coming years pose a challenge to Qatar, but given its past record of nimble footed negotiation of troubled times, this middle eastern state may trot ahead of many of its counterparts in the Gulf.

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