The Middle East Political Turmoil and Economics
By: Amit Bhushan Date: 27th Dec. 2017
There are many ‘changes’ being witnessed on Politico-economic front. This is not only true for the turbulent Middle East region (or MENA region) but for most of the World. However the ability to the changes to bring in political stability in the region remains in doubt, though. This is because many of these changes continue to rely on extraneous factors rather than internal controls and therefore continued involvement of such factors in the domestic politico-economic structure of the politically turbulent region. What has remain the hallmark of the region is to remain ‘Islamic’ in its social sector even as it pushes towards somewhat greater liberalism while becoming a Europe in the economic sphere and also as 'stable' politically and that has been a broad contour of the developments in the region over a period. What has remained a hallmark of the political economy is a fixation on ‘oil prices which is the single most important ‘export’ of the region and has led it to convert itself into a market for luxury goods and gas-guzzling automobiles besides many other Wester tastes. No wonder most people are seen lamenting about the ‘crash’ in prices and ever hopeful of the ‘price rebound’ since that would ensure harmony in line with 'tastes'. This is also seen as a factor that would bring about the social as well as ‘political’ stability. The growing ‘independence’ of the USA away from mid-east towards its domestic produce is seen as a big disruption from which the region wants to come out of, and therefore needs to develop new markets for oil. with a little greater focus on gas as well but only for outside rather than in domestic areana for gas.
There have been important ‘changes’ that are being ‘ushered’ into the region whereby technology based economic progress seems to be getting some fillip. This is seen as an area which would create jobs and improve living standards and well-being for the people in the region and possibly allow some space for ‘creative’ people to rise thereby bringing in socio-political stability. This is however seen as cedeing of space by the 'conservative' who have been 'responsible' for much of stability and little seems to have been done to balance the economic interests within domestic areana. However a fixation for the oil prices and therefore its internal ‘market model’ seems to be being debated alongside economic and socio-political stability. So the domestic human resources seem to be getting somewhat higher political importance than in past but then these would need to show progress to be able to stake claim to the dues. The past has seen the taste and preference of the people grow on the lines of the Western economic order since that allowed for a higher ‘oil’ price and that seems to have broken somewhat. However the ‘play’ of the extraneous factors in these markets continue unabated. Perhaps in no other region is resource like ‘Natural gas’ treated with such disdain from political perspectives. Perhaps the abundance of cheap energy source in the form of a more easily ‘manageable’ oil had led to that, alongside costlier tech for ‘managing’ gas and its low prices and global importance. Now with most of the world looking to diversify away from its energy sources (from Middle East), and also perhaps away from Oil, it is important that the political consideration of such a move be given its due weightage. In any case many Middle Eastern governments are looking to raise tax revenues from the domestic arena due to ‘global’ pressures.
What Middle East can perhaps try is put taxes or systematic increase of ‘oil’ based fuels by increasing prices to international levels (over a period) in the domestic markets as this would help them bring about changes in the domestic market structures and diversify away from the past. This can be done simultaneously with opening of a domestic market for ‘Gas’ which will give rise to new domestic projects and jobs and also help in raising financial resources to fund growth. It would also help them bring in new players and technology and investments much needed to stabilize ‘markets’ which remain volatile for now. This may see a ‘change’ in the structure of its domestic markets though whereby the focus on ‘energy conservation’ may witness some rise which is in any case a more wide spread phenomenon, and new players in the markets on this count. A rise in importance of Gas will perhaps ensure that the overall energy exports and their prices become more stable besides also allowing to maintain the ‘volumes’ of such export in an era where new investments for development of new fields is become more difficult. Reduction in Gas Flaring may help bring in investment and technology as well as investments. This would also see a rise of tendency to ensure stability of prices for both oil and gas rather than just a focus on oil (alone) as earlier. This would perhaps see a greater balance of interest for both ‘producers’ as well as ‘consumers’. Let’s see the ‘Game’ evolve…