A Tale of Two Middle Easts: Change and Stasis in the Arab World

This paper argues that the past two decades or so has witnessed a dramatic rise in the wealth and economic power of some parts of the Middle East, especially the Arab monarchies of the Gulf, while the nonenergy exporting states, especially the republics such as Egypt, Syria, Yemen, Libya, and even Tunisia, lagged or even stagnated. The Gulf has had the financial power to cushion the effects of economic reform, and to engage with globalization on its own terms and at its own pace. The republics, meanwhile, have either blindly undertaken neoliberal reforms, which have been deeply unpopular with many people, or have tried to resist economic change and globalization, causing their economies to stagnate. There are now, it is argued here, two �Middle Easts�: the wealthy, predominantly Gulf one, increasingly engaged with Asia and the world and adapting to external change largely on its own terms; and a republican one, left behind by economic stagnation, political dissatisfaction, and a failure to address underlying problems such as rapid population growth, urbanization, and deteriorating social services. As regional power has shifted from this republican Middle East to the Gulf one, and the naturen of this regional power has transformed from something primarily military to increasingly based on economic and �soft� power, the future of the Middle East is becoming bifurcated. One part of it is looking increasingly active and open, while the other, after the shortcomings of the �Arab Spring� and without dramatic reform, is at risk of remaining on the periphery of the international economic system.