The answer depends, in part, on understanding a culture that often appears ambiguous or intimidating to outsiders, in part because outsiders haven’t fully recognized the paradoxical tensions that underlie the sensibility of many Middle East leaders. Commentators in the West often view the Middle East as a homogeneous region, lumping together countries as culturally, politically, and economically distinct as Lebanon and Yemen. And to be sure, the Arabic language and Islamic culture that dominate within the region have created a shared cultural heritage, and people’s shared historical experience has to a certain degree strengthened a regional collective consciousness. But there are also enormous differences both within and among the countries of the Levant (Jordan, Lebanon, and Syria), the Gulf (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, and Yemen), and Egypt and other countries of North Africa. This mix of similarities and differences makes it difficult to predict the direction of the region as a whole, for at any given moment, different countries will pursue different interests, particularly in the economic sphere. (See Exhibit 1.)
One of the most important matters affecting all the countries of the region is oil prices. The oil booms of the 1970s were often characterized by inefficient spending sprees and limited fiscal management. But in today’s boom, even as prices reach $100 a barrel, Middle East leaders have not forgotten the lessons of the oil bust of the 1990s. That bust, which saw oil prices dip below $20 a barrel, challenged the once-shielded producers of the Gulf Cooperation Council (GCC) — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates — to think about ways to reduce their heavy dependence on oil revenues. Today, oil-producing countries are using their extra revenue to reduce foreign debt, boost liquidity, develop trade ties, and attract foreign investment. They are determined to build wealth for themselves and make the current oil boom pay off in the long run. (Although non-oil-producing Middle East countries operate within a different framework, crude wealth has trickled across their borders in the form of aid and investment; the oil bust had a sobering effect on them as well.)
Governments now realize that in order to achieve sustainable wealth, they must develop a middle class, along with the sort of job base that can sustain it — even if the development of that class requires them to relinquish a bit of control. In a region where half of the population is below the age of 20 — and where the unemployment rates are considerable in many countries — a sustainable middle class becomes an even bigger deterrence to economic stagnation or political tension. People with a stake in the future of their families are less likely to tear down the fabric of their countries. This recognition is reflected in a willingness and desire to build private enterprises within many Middle East countries and to welcome new forms of partnership.
Another important factor in the transformation of the region is globalization. Aside from its role as the world’s largest producer of oil, the Middle East kept to itself for a long time. Perhaps owing to this insularity, the region was — and is — commonly seen as lagging behind the rest of the world, its leadership seen as slow to embrace and implement change.
Today, we see a very different Middle East. The region’s leaders are committed to catching up to, and in many cases surpassing, the rest of the world. Indeed, the tremendous economic vitality of the region is due, in no small part, to visionary individuals in positions of authority who are eager for progress and willing to move quickly. An increasing number of decision makers in top ministerial positions are coming from the private sector; they are often highly educated and motivated to pursue change. In this sense, the region can be likened to a car navigated by a driver who has pulled out of his garage well after his neighbors, but who nonetheless has every intention of going the same distance, and without wasting any time.
