Economic Growth in the Middle East, 1950–1972

Author:

Barlow Robin

Abstract

The year 1973 was clearly a turning point in the recent economic history of the Middle East. On October 1 of that year, the price of Arabian Light, a representative type of Middle Eastern crude oil, stood at $3.01 per barrel. On October 16, following the outbreak of the Arab-Israeli war, the price rose to $5.12. By January 1, 1974, the price had reached $11.65, as OPEC further exploited its opportunities for cartel profits. In consequence, there was an international transfer of purchasing power—from oil importers to oil exporters—unprecedented in its scale and suddenness. The Middle East has been the major beneficiary of this transfer. Other Middle Eastern countries benefited indirectly, as the oil states expanded their demand both for imported commodities and for immigrant labor, and stepped up their programs of financial assistance to less favored parts of the region. So 1973 saw the start of an acceleration of Middle Eastern growth that was both rapic and widely diffused.

Publisher

Cambridge University Press (CUP)

Subject

Sociology and Political Science,History,Geography, Planning and Development,Sociology and Political Science,History,Geography, Planning and Development

Reference11 articles.

1. Time (01 10, 1977), p. 50: “The foreign money entering Israel spurred growth that has given Isarel a G.N.P. only a shade smaller than that of Egypt, though its population, at 3.3 million, is less than a tenth the size.”

2. Donald C. Mead , Growth and Structural Change in the Egyptian Economy). Equation (3) is based on 45 observations of per capita dollar GNP, as estimated by equation (2), and per capita national oil output, of which 13 pertained to Kuwait (for the years 1960–1972), 13 to Saudi Arabia (1960–1972), II to Libya (1962–1972), 6 to Oman (1967–1972), and I each (for 1972) to Bahrein and the Emirates. Sources of data on national currency GNP in these six countries, needed for the estimation of dollar GNP via equation (2), are given in n.j of the Appendix. Data on oil revenue and prices were obtained from OPEC, Annual Statistical Bulletin, 1973. R2 for equation (3) was 0.96.

3. Barlow , “Test of Alternative Methods,” p. 455.

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