Monitoring the Global Recession in the Middle East

New Report: "Missed by the Boom, Hurt by the Bust: Making Markets Work for Young People in the Middle East"

A new Middle East Youth Initiative report, "Missed by the Boom, Hurt by the Bust: Making Markets Work for Young People in the Middle East," advises against a reversal of open market policies in the region, stating that instead "the crisis should serve as an opportunity for increasing competitiveness, promoting job creation, and developing a better skilled workforce."

More Analysis from the Middle East Youth Initiative:

• Global Economic Crisis: Prosperity and Politics in Lebanon Navtej Dhillon and Jad Chaaban

• Tough Times Ahead for the Iranian Economy Djavad Salehi-Isfahani

• Global Economic Crisis: Coping Mechanisms in Oil-Exporting Economies of the Middle East Djavad Salehi-Isfahani

• Global Economic Crisis: A Catalyst for Change in Saudi Arabia? Navtej Dhillon and Hassan Hakimian

• The Middle East in a Post-Oil Boom Era? Navtej Dhillon

• Global Economic Crisis: Mixed Forecast for Jordan and Syria Taher Kanaan and Nader Kabbani

• Global Economic Crisis: Can Egypt Emerge as a Winner? Navtej Dhillon and Heba Handoussa

• Global Economic Crisis: Short and Long-term Prospects for Egypt Navtej Dhillon and Ragui Assaad

• Slipping Oil Prices: Is the Oil Rich Middle East Prepared? Djavad Salehi-Isfahani

Recent Developments in the Region:*

• May 17: The World Economic Forum on the Middle East concluded in Jordan, with regional leaders voicing strong support for change and reform in the face of global economic challenges. The two "action items" highlighted at the end of the conference were energy security and conservation and youth issues. (See the World Economic Forum press release, Christian Science Monitor and الدستور)

• May 10: The latest IMF Regional Economic Outlook predicts GDP growth will slow to 2.6 percent in the Middle East and North Africa in 2009. The Middle East oil-exporting countries are expected to see growth of 2.3 percent, but the report concludes that "countries with adequate fiscal space" should maintain or increase spending, which is helping to stimulate global demand. (See IMF Regional Economic Outlook)

• April 29: In an official statement welcoming the upcoming World Economic Forum on the Middle East, set to take place on the Dead Sea from May 15 to 17, HM King Abdullah of Jordan stated: "The World Economic Forum is always a source of inspiration for those who work to advance development in our region and tap into the vast potential of our young people." The theme of this year's conference is "Implications of the Global Economic Crisis for the Middle East: Home-grown Strategies for Success." (See Jordan Times and the World Economic Forum website)

• April 22: The IMF World Economic Outlook projects that Middle Eastern economies (excluding North Africa) will grow by 2.5 percent in 2009, a drop from a nearly 6 percent growth in 2008 and the IMF's January projection of 3.9 percent. The downturn will affect oil-exporting and non-oil-exporting countries alike, with the potential that uncertainty about oil prices will cause reduced infrastructure spending. Declines in remittances, exports, and tourism are hitting countries like Egypt, Jordan and Lebanon hard. Inflationary pressures across the region are expected to subside to 11 percent in 2009 (down from 15.7 percent in 2008), while current and fiscal balances are expected to deteriorate as government expenditures and investment projects attempt to bolster domestic demand. (See IMF World Economic Outlook)

• April 21: A report released last week by the International Labour Organization (ILO) Regional Office for Arab States notes that the global crisis has had limited impact until now on the region’s real economy, but warns that effects may be felt “more forcefully” in the coming year, with real GDP growth projected to slow to 4 percent in 2009 and a drop in remittances, job creation, tourism, and official development assistance predicted, introducing new risks for the most vulnerable workers. The ILO report recommends that countries in the region seize the moment to develop effective employment and social protection policies, while channeling public investment toward infrastructure, housing, and labour-intensive projects. (See ILO Policy Note)

• April 16: The Autonomous Government of Catalonia has requested from the government in Madrid greater flexibility in the renewal of work permits for immigrants facing unemployment during the economic downturn, many of whom have reported difficulty in renewing these permits. The immigrant population in the Catalan region was estimated at 1.12 million at the end of 2008, among which nearly 300,000 are Moroccan. (See Le Matin)

• April 15: In its monthly report on the oil market, the Organization of Petroleum Exporting Countries (OPEC) revised its estimate for global oil demand in 2009 downward to 84.18 million barrels per day, a decline of 1.37 million barrels per day, or 1.6 percent, from 2008 (year-on-year). OPEC includes eight states from the Middle East: Algeria, Iran, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, and the United Arab Emirates. Prior to the OPEC announcement, the International Energy Agency (IEA) had cut its 2009 forecast by 1 million barrels a day. (See Bloomberg; OPEC Monthly Oil Market Report)

*Items in "Recent Developments" taken from external sources as noted. Photo source: Scott Wallace / World Bank.