Stability and development is a tempting formula, but it has been tried before
, a diplomatic club which comprises Brazil, Russia, India, China and South Africa, had members from every corner of the developing world except the Middle East. No longer: of the six countries invited to join the bloc at its annual summit on August 22nd, four—Egypt, Iran, Saudi Arabia and the United Arab Emirates —are from the region. If they all accept, the Middle East will account for more than a third of the expanded bloc’s members.
The Middle East has huge potential. First, and most obvious, it is awash with hydrocarbons. It accounts for 36% of world oil production, 46% of oil exports, 22% of natural-gas output and 30% of liquefied natural gas exports. Those numbers will only rise. The region has vast reserves and low production costs. At a time when Western oil majors are skittish about investing, Gulf firms are adding capacity.
Oil is at the heart of the second shift, in energy markets. The region is trying to become an even bigger force in oil and gas to finance a transition away from hydrocarbons, contradictory though that may sound. Recent high oil prices have brought a windfall. Aramco, the state-owned Saudi giant, posted a record $161bn profit last year, up from $110bn in 2021. It plans to expand its capacity by 1m barrels a day over the next three years. Thehas a similar target.
The easing of tensions has nonetheless brought a measure of calm, which may help explain the improving economic outlook. Theexpects the non-oil portion of the Gulf states’ economies to grow by 4.2% this year , even as the oily bit expands by just 1.9% . The region attracted 6% of global flows of foreign direct investment last year, up from 3% in 2019., accounted for 14% of the world’ss in the first quarter of 2023.
Unfortunately, most of the Middle East is penurious. Even in a time of regional calm, dire economies threaten these countries’ stability. In the past five years alone, since Prince Muhammad first began talking about a regional renaissance, there have been big protests in Algeria, Iran, Iraq, Jordan, Lebanon and Sudan.Egypt, the most populous country in the Arab world, is especially alarming.
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