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The Middle East is one of the most important regions of the world due to its location. Additionally, the location is regarded as a holy site and one of the richest in oil. Territorial, ideological, and racial issues are at the center of Middle Eastern internal politics. It is important to take into consideration the current rivalry for leadership in the area. The situation of security in this part of the world is further worsened by the complex dynamics of the military, involving the non-state actors, the formal military, and not limited to the foreign direct as well as external forces powered by the strong economic interests. Even so, the contemporary political dynamics of the region are characterized by the peace initiatives aimed at resolving the Palestine issues and the constant fight that has been witnessed in Palestine in the past couple of years. The in-fighting in Palestine is likely to remain unaddressed owing to the disconnect of the Arab leaders with the public as well as the exclusion of Hamas and Iran from the latest attempts to make peace. Since the economy is always at stake in situations of political and regional unrest, it is substantial to believe that dividing Iraq along ethnic or sectarian lines has worsened the situation of the country and the region at large.
The conflicts that have been witnessed in the Middle East, particularly in Iraq, Kuwait, and Lebanon have affected the economies of these respective nations through multiple channels. Some of the notable effects of the conflict included the reduction in aggregate supply through production disorganization, physical capital destruction, and labor dislocation. All the economic challenges mentioned affected the mission of resolving conflicts in the Middle East either directly or indirectly. In fact, from the perspective of growth accounting, these economic factors insinuated both the reduction in the total factor productivity since the efficiency of the economy was compromised and the interruption in the technology absorption. Moreover, the economic challenges meant dwindling of both human and physical capital, which are integral in conflict resolution. This was shown in output contraction, inflation acceleration, huge fiscal and current deficits of accounts, a loss of reserves, and weaker financial systems.
It is imperative to recount how exchange rate and inflation as economic components affected peacebuilding in the Middle East. Inflation picked up with different degrees across the nations in the region. However, it is also significant to be cognizant of the fact that even before Iraq and Lebanon entered into war, the two countries already had high rates of inflation. Therefore, during the war, the rates of inflation now shifted even further. In Lebanon, the resultant rapid liquidity growth compared with the private sector confidence erosion and liquidity activity resulted in continuous pressures on the Lebanese currency, which had been floating since 1952. This led to a high level of substitution in currency as well as an increased inflationary pressure. Conflict resolution involves forming strategies to rebuilt challenged economy. Therefore, with the high rates of inflation in some of the key countries in the Middle East, the efforts to resolve conflicts in these nations were affected.
The research also demonstrated that the conflict resolution in the Middle East was greatly grounded in the economy structure. For the countries that do not produce oil in the Middle East such as the Lebanon, it was clear that the average supply apparently took longer to meet the rising aggregate demand. Large deficits in current and fiscal account in the periods after the war reflected the continuing excess demand. Nevertheless, for economies rich in oil such as Kuwait and Iraq, where the production of oil represented a meaningful average part of supply, the recovery of the output took place faster as the oil-mines were reactivated relatively faster. With the reasonable amount of supply of oil from these two rich zones, the peacekeeping mission became moderately easier. The fact that the bulk in oil production was exported gave room for the Middle East countries in post conflict such as Kuwait and Iraq to get current account surpluses within a limited time and recover their international reserves.
In as much as it might have been challenging to disentangle the consequences of the war from the other confounding factors affecting the economy of the neighboring countries in the middle east, it is key to pinpoint some of the fundamental factors that affected the process of rebuilding peace in the region. This could assist in drawing lessons from economic issues that influenced the mission of conflict resolution in the neighboring countries in the Middle East region. A concise analysis points at the level of income and the number of refugees, the degree of external assistance as well as the economic integration as some of the economic components that affected the process of conflict resolution in the middle east. For instance, in the case of Jordan, the economic integration was largely positive. Despite the negative influence witnessed earlier, which the Gulf War and the economic invasion of Iraq in 2003, the nation still enjoyed the higher demand from refugees and external aid.
Nonetheless, Syria was affected adversely by the war witnessed in Iraq owing to the negative impacts on its investments and exports. Besides, as the number of refugees from Iraq hosted in Syria were also much higher in Jordan. The other aspect that made it difficult to resolve conflicts in these regions was the fact that Syria failed to receive foreign grants that could facilitate the peacekeeping mission. Syria was among the unfortunate countries that could not afford to resolve the regional conflicts because of its refugee population. Again, this country suffered international isolation based on its poor economy in the earlier years, hence making the dream of peacebuilding futile in this region. However, in the case of the civil war in Lebanon, the economic effect on the neighboring nations was limited since the majority of the Lebanon citizens moved to the western countries and the Gulf.
Additionally, it is also worth noting that the macroeconomic variables of the neighboring countries were influenced even before the conflicts reflecting the uncertainties in politics in the region with regard to an impending conflict. For example, despite the strong growth of Jordan in 2002, the country’s domestic demand was still subdued stemming from the stagnant stance of the private sector due to the heightened conflicts in Gaza and West Bank as well as the uncertainties that were experienced from the war in Iraq. Moreover, during the mid-2002 in Syria, just before the war in Iraq, the system of free market witnessed a lot of pressure mainly pointing on the region’s political uncertainties.
The Effects of Individual Leaders in Inter-Arab politics
In the first few years of the Arab spring, it was astonishing how various Arab regional politics was from earlier eras. The natures of these politics were not merely grounded in long-lived autocracies but also regarding inter-Arab relations within the regional system. In the earlier days, the Arab politics had witnessed struggles for hegemony or dominance between three main powers, which included Syria, Iraq, and Egypt. Even so, in the earlier years of the Arab spring, the names of the three capitals mentioned above, that is, Damascus, Baghdad, and Cairo did not imply centers of regional power. Instead, they implied insurgency, chaos, revolution, or civil war. The capitals and the countries of the Old Arab Cold War, therefore, were not perceived as protagonists in leadership struggles. Instead, they became arenas for self-struggle.
Nearing the 2011 uprisings, the Arab lacuna in the inter-Arab relations resulted to a unique constellation of emerging powers. Saudi Arabia, which for a long time played a “behind the scene” role in the regional fight, now joined openly in the regional politics. However, it joined with mixed results. The small Qatar emirate turned out to be, temporarily, the main source of influence and power. The emirate also tried to play a role of foreign policy, stretching from Syria to Libya. Qatar, Saudi Arabia, and the other monarchies of the Arab Gulf in the Gulf Cooperation Council across the region intervened with arms and money, hence influencing the domestic politics past the Gulf. At some point, the role of this council supported the revolution, which went against Muammar al-Qaddafi and Bashar al-Assad in Libya and Syria respectively. Even though, at some point the council seemed to be counter-revolutionary in the Gulf. The council went further to launch a military intervention that would secure the survival of the regime in Bahrain but at the same time counter the efforts of revolution across the gulf. Yet, the Qatar and the Saudi Arabia also engaged in a proxy conflict and heated rivalry against themselves.
Later in 2011, owing to the inter-Arab lacuna, and partially because it apparently represented a case of democratic and successful Islamism, it was ostensible that turkey ascended into regional power. However, the irony of this moment was that renowned leader did not originate from the Arab origin. Instead, he was Recep Tayyip Erdogan, a prime minister of Turkey. Even so, even in this post, things were not just moving on a plane ground for the new leader. There was a dramatically change of fortunes. Just like what had been experienced in Qatar, Erdogan was challenged by the overthrow of Muslim Brotherhood in Egypt. More interestingly, this even was characterized by personal vitriolic animosity, which was witnessed between General Abdel Fattah al-Sisi of Egypt and the then prime minister of Turkey. Nonetheless, both parties became presidents of their respective countries in 2014, something that spurred the animosity that had been between them even deeper.
Concisely, the Gulf Cooperation Council (GCC) stood out to be the only standing alliance within the inter-Arab politics. Even so, it was a council marked by serious divisions and rivalries. In the view of some experts, it looked like an autocracy and a coalition of the Sunni Arab monarchy, which was reprising its roles from the earlier cold war in Arabia. This time too, the GCC formed a defensive front against ideological and material threats. This time around, the new cold war in the region was not merely Arab but dominantly the Saudi-Iranian upheaval, which manifested in competitive interventions with sectarian tones. Whereas the local sectarian violence was real, the larger aspect of the Sunni-Shiite of the late cold war in the region was more of a symptom that a cause. In a nutshell, the primordial hatreds did not have a place in the regional international relations. Instead, the ideational and the material struggles of power were manipulating the ethnic and the sectarian tensions actively in a cynical power struggle with devastating outcomes.
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