Review of Middle East Economics and Finance
Ed. by Dibeh, Ghassan / Assaf, Ata / Cobham, David / Hakimian, Hassan / Henry, Clement M.
The Gulf Arab countries were promoted as dynamic, rapidly growing and self-transforming economies in the boom years of the 2000s, and were praised for their purported leadership of the MENA regional economy. As of 2010, despite the severity of the financial crisis and recession of 2008-2009 in the Gulf and consequent impact on the rest of the region, the GCC countries were still promoted as potential leaders of both the recovery and future regional development. An examination of the evidence regarding the direction, magnitude and uses of GCC financial flows both domestically and internationally from 2000 to 2010 finds that the investment programs in place in the boom years provided outcomes that only weakly fulfilled these promises and that they barely fulfilled them at all during the economic crisis and recovery. The author’s assessment is that GCC-sourced investment since 2008 mainly addressed the Gulf region’s internal development project, although even that seemed dependent on continued high levels of hydrocarbon revenues, and did little to demonstrate the promised leadership of the regional economy by the GCC.