Economic reforms in the Middle East were a tough challenge. The Middle East countries were called “Global Losers” because of their lack of growth compared to Asian and Latin American economies. Economic reforms were undertaken to reverse this negative economic trend. USA, IMF and World Bank played an important role in initiating reforms in the Middle East. Egypt Jordan and Saudi Arabia were among the major Middle East countries to implement economic reforms.
Economic reform in the Middle East has been one of the toughest challenges faced y the Governments of those countries. The region which was once a major economic force in the world didn’t experience much economic growth after the 1980s. While the Asian Latin American and even some African countries grew significantly after implementation of economic reforms, the Middle East countries could not register much economic growth due to failure to adopt proper reform measures.
Economic stagnation, growing unemployment and poverty and paucity of investments characterized the Middle East economies post 1980s.
Moreover the Middle East economies were further affected y the gulf war during the early 1990s. Economists started calling this area the “Global Losers”.
Role of USA, World Bank and IMF in economic reforms in the Middle East
It was realized that in order to reverse the economic trends in this region and to bring about economic growth, economic reforms needed to be undertaken. Efforts ere initiated by the International Monetary Fund (IMF) and World Bank. Role of the private sector was emphasized with the objective of attracting investments. Liberalization of trade was another key focus area. The United State also played an important and persuasive role in the comic reforms in Middle East nations.
The “Washington Consensus” was an important initiative in this regard. It focused on –
Withdrawal of price control measures.
Middle East Free Trade Area (MEFTA) Initiative
In 2003, the Middle East Free Trade Area (MEFTA) Initiative was undertaken. The objective of this program was to support and augment the process of economic reforms in the Middle East.
The following initiatives were undertaken under MEFTA.
The United States of America set up Free Trade Agreements (FTAs) with a number of Middle East countries.
Assistance was provided o the countries implementing economic reforms.
Bilateral Investment Treaties (BITs) were signed with several Middle East countries like Egypt, Jordan, Lebanon, Tunisia, Algeria, etc.
Middle East countries were able to apply for accession to the World Trade Organization (WTO) which would help them to real the benefits of open markets.
Last Updated on : 26th June 2013