geopolitical power of the gulf | amman institute

GEOPOLITICAL POWER OF THE GULF

Dr. Bessma MomaniAssociate Professor/ University Of Waterloo

Department of Political Science

bmomani@uwaterloo.ca

What explains the growing economic integration between the Gulf Arab counties and the Mashreq region (Egypt, Lebanon, and Jordan)—specifically, Gulf investments

the six GCC states current account surplus: $50 billion in 2003-2004;

$400 billion in 2007-2008 $47.4 billion in 2009; to

about $124.2bn in 2010

the GCC had $1.6 trillion (or 225 per cent of its GDP) to $2 trillion in foreign assets at the end of 2006 67 % public owned 33 % by private individuals

LET ME CONTEXTUALIZE THIS.....

China:$1.1 trillion in foreign reserves 42 per cent of its GDP Is public owned Long term domestic absorption GCC only 40 million people

WHERE DID GULF MONEY GO?

Eco Reforms FDI problems Not just

structural Then oil prices

WHY GULF INVESTMENT IN MASHREQ?

Push factors Out of US, because:

9/11; Dubai Ports; Sovereign Wealth Funds

Eco diversification Financialization SWFs

Vs. wasted 1970s Aware public Digital democracy Young; W. educated

Pull factors Structural eco reforms Deregulation;

privatization; market forces; FTA

‘neighbourhood effect’ Horizontal networks Arab money managers

Regional peace dividend

FUTURE STUDY... But, what are the lessons for Jordan? What does this mean for the region? How to explain investor behaviour?

Questions?