Social stratification and fast population growth are characteristic of all Middle Eastern countries

1 march 2017

At the moment sustainable development of the Middle East looks virtually impossible. International cooperation aimed at normalizing the economic situation has become a global challenge. During the seventh session of the Middle Eastern conference of the Valdai Club, the experts discussed the opportunities for reviving the economy in the region with the help of both local and external players as well as non-governmental organizations. According to the moderator of the discussion, Leonid Grigoriev, Chief Adviser to Head of the Analytical Center for the Government of the Russian Federation , all the middle eastern countries have fairly noticeable social stratification and are experiencing fast population growth, which allows for some general trends to be traced in the region.

“The region’s key countries have colossal differences in GDP per capita,” Mr. Grigoriev said. “In Saudi Arabia it is $54,000, in Egypt it is just $12,000, in Pakistan it is $5,000 and in Afghanistan it is just $2,000.” The expert believes that a great deal depends on 3 key factors: private investments, state support of the rich countries and the flow of remittances from migrant workers in the Persian Gulf. “Egypt alone gets some $7 billion in remittances, which in total exceeds the inflow of capital but is used for personal consumption rather than investments,” Mr. Grigoriev pointed out. “So, development depends on security, the socio-economic organization of the countries and the strategic use of the 3 main resources that the countries in the region can rely on in their revival and modernization.

The window of opportunity that has currently opened due to the peace talks is extremely important, Mr. Grigoriev supposes. It is the first time in many years that we have had such an opportunity, the expert pointed out, but history proves that it is important to seize it. “The population growth rate is about 2%, and 10-15 years from now the new generation can find themselves unemployed and pose a serious threat to stability should these years be wasted in terms of socio-economic development,” Mr. Grigoriev concluded.

The experts that took part in the discussion agreed that the energy resources factor was fundamental for economic growth in the region. Given the OPEC agreement about reducing oil production, the oil prices may increase somewhat, which would have a positive impact on the economies of oil producing countries. In the context of the economic stabilization of the Middle East, the experts also considered the issues of creating security zones and the prospects of building pipelines across the territory of Syria.

Photo from the website of the Valdai International Discussion Club.