 Okay, hello everyone. Welcome to the first of our regular research seminars and talks on a Tuesday evening hosted by the Soas Middle East Institute and co-hosted by the Center for Palestine Studies and the Center for Iranian Studies. I'm Dina Mutter. I'm the chair of the Center for Palestine Studies and I'm also a professor in the lower department focusing on media and communication of the Arab world. I'm really delighted to have in our inaugural session for this year, 21-22, Professor Hassan Hakimian whose contributions to Soas cannot be forgotten. But he is currently professor of economics and he's the director of the Middle Eastern Institute Studies Department at the College of Humanities and Social Sciences in Qatar at the University of HBKU in Qatar. He is also an emeritus professor at Soas where he directed the London Middle East Institute, LMEI during 2010 to 2019 and was a leader in the economics department. Prior to that, he was associate dean at Cass Business School between 2003 and 2007 and director of the Center for International Education in Economics at Soas which was awarded the Queen's Prize for Higher and Further Education in 1996. His research focuses on the economies of the MENA region, specifically labour markets, economic sanctions, inclusive growth and the economics of Arab appraisings. His most recent publication is an edited collection called The Routledge Handbook on the Middle East Economy which was published this summer. He is founding member and past president of the International Iranian Economic Association, a research fellow and chair of the advisory committee of this association and is elected to serve on the Board of Trustees of Economic Research Forum, the largest network of Middle Eastern economies based in Cairo. He is the founder and series editor for The Routledge Political Economy of the Middle East and North Africa which he launched in 2003. So Professor Hakim Yan is going to talk for about 40 to 45 minutes. He's going to share his screen with us and then we have questions and answers that I really advise you to put in the Q&A icon which is at the bottom of your Zoom screen and send us your questions and I will collect them to put forward to Professor Hakim Yan at the end of his talk. We also have some people joining us on Facebook and so they will be also we will be collecting the questions as well. Without further ado really welcome you Hassan to this first talk of the SMEI and then looking forward to what you have to say and I'm just going to turn off my microphone compact later. Thank you so much for agreeing to be the first speaker in this series. Thank you very much Tina for that kind introduction. It really is great to be back at SOAS well virtually. As you know I left SOAS after all together 20 years of service and commitment although in two stints and as we always say at SOAS even when you leave SOAS you really haven't left it and I've experienced this at least twice and this time is no exception. For the past two years just over two years as you said I've been at Hamad bin Khalifa University, HBKU, a young and growing university in Qatar and I'm directing the Middle Eastern Studies Department. This is a new chapter and the last part of which was affected by COVID like anybody else's experience. It felt like being under house arrest but remarkably in the last academic session the full delivery was online and our students we managed to support our students without even seeing them once. I'm sure this is now part of the common global academic story that we experienced all of us. Anyhow being at the Middle Eastern Institute and especially being given the pleasure and privilege of inaugurating this year's lectures is very close to my heart. It also brings back memories when we were at the lecture theater I would typically stand up to introduce the speaker and then I would go back sometimes searching for a free seat to occupy and given the level of interest in our activities and events it was not at all unlikely that actually the lecture theater would be absolutely full and once or twice. I had to scour around to find the seat and this was a good sign. Anyway I hope not to disappoint tonight. I know the loss of old friends colleagues and acquaintances in the audience in the virtual audience. I'm sorry we can't see each other I'm sorry I'm not in direct contact but the topic I've spoken I've chosen to speak to you all is offering critical reflections on Middle East economics. Let me share my screen I have a PowerPoint okay let me just adjust yeah I assume you can see my PowerPoint yeah okay and I assume that you can also hear me well. Before I start let me offer my thanks to as I mentioned Dina Chair of the Palestine Studies Center and Nagas Farzad Chair of Iranian Studies Center and Aki. All three of you have been very kind in inviting me and also in supporting the SOS Middle East Institute activities in the past two years so a special thanks to you for this honor and privilege. This talk draws from a work I've been involved with over four years the first two years of which coincided with my last two years at SOS and then when I joined the Qatar University HBKU I completed it here. Everything a handbook on one of the world's regional economies such as the Middle East is no small task and without the help and inspiration of many colleagues and friends over the years it would have been even more daunting. In fact the book was just published this summer in July and it has 22 chapters and covers a wide range of topics of interest but I want to express my thanks from the acknowledgement I have indicated that the inspiration and the commitment to do the book really comes from many generations of my students and colleagues especially at SOS where I was a member of the Economics Department and also as Dina mentioned Director of the Middle East Institute. I explicitly state that the intellectual environment of the Department of Economics as well as the wider and vibrant community of Middle Eastern specialists at SOS were essential for helping me shape my ideas so I wanted to state that that intellectual debt at the outset. Now the context for this talk tonight by the way this talk is not an actual book launch I will be having a proper book launch for this later in early November and I will ask Aki to make available the link that would be through my own university and it will involve a panel of contributors from the volume. The work for this talk draws from the introduction which I wrote for this handbook and that took me through a retrospective tour of my subject my discipline Middle East Economics. Now I appreciate that some in the audience are economists they may even be very familiar with the contours of Middle East Economics and typically I know that you know our audience tend to be interdisciplinary and come from different backgrounds so I will try and give an overview which is not too technical and of course always happy to discuss anything that comes up in the Q&A section. One of the main motivations behind undertaking to do the handbook was I remember when I was teaching the course and this includes many years at SOS the availability of relevant and appropriate reference and teaching materials always was an issue although this has been growing over time but it has been a constraint so to be able to pull together material which is both up to date and available as a source of reference for newcomers but what can also be used as teaching material was something that I thought was capable of filling in the gap. Now in fact I will be arguing in the next half an hour or so that Middle East Economics is relatively a new subject in fact. Having said that of course it's true that it has come a long way it has come of age over the past five decades and is now fairly specialized field within applied economics, applied development economics, political economy of development, area studies and development studies so it really sits at the intersection of several disciplines and that in itself gives it certain distinct features but also it raises challenges that I would be discussing in this retrospective tour. My main motivation however in taking this detour is twofold. As an economist I've always wondered about the role of socioeconomic and political context on knowledge production in economics that is both in its theoretical and applied dimensions. I know tradition is that we operate in silos and tradition is that we speak to our members of our own disciplines utilizing specialized language but it has always fascinated me to find out to what extent within economics we are influenced by the context whether political or socioeconomic so that is one thing and I hope to be able to shed light on this. The second one is I'm also interested to see if the region has actually just been a playground to external ideas that have been imported or it has also actively contributed to the growth and maturity of the subject that is development economics theories and policies so let's keep those two motivations in mind and I will come back to address them. The talk would cover mainly three periods but I've highlighted here four. The early period 1950s, 1960s will be brief. The coverage really starts from the so-called oil boom era in the 1970s then I go on to discuss the 80s and 90s the so-called period of growth and jobs crisis very different from the oil boom era and I will be concluding with some discussion of the so-called Arab Spring both the period before and after so the more recent two decades but let me let me since I'm covering a very long period I want to start with a story. If I were in the company of academic economies and if I asked can you identify this picture I have very little doubt that most people would be able to readily mention Sir William Arthur Lewis's name. He's a he's recognized as a towering figure and one of the four runners in development economics. In fact he was the first development economist to be awarded the Nobel Prize in economics that was jointly in 1979 and he's very well known amongst economists for his seminal paper so-called economic development with unlimited supplies of labor which was published in 1954. This text this article has adorned many reading lists and textbooks for generations of economists and students of course. You might be wondering what is the link and this is where the story what is probably less well known about him is that he was actually the first black lecturer to be appointed at LSE the first black lecturer that was in 1938 and later on he was also the first black professor in the UK as a whole okay so those are two unknown or less known facts about him but probably more significantly his groundbreaking appointment at the LSE came with restrictions which reflected the racial prejudices of the time. He was from the Caribbean island of San Nusha first his appointment had to be approved by the LSE's court of governors as a special case and also his total teaching hours were limited so it was not a regular appointment and this story gets even more interesting. He was only permitted to teach groups of students which brought him effectively from holding individual tutorials so I expect he was not considered to be safe that's a measure of the racial undertones of the time. What I'm really interested in and this is where the link comes in is that there's a very little known fact a very obscure fact that Mena actually features in his seminal paper in the spring of 1953 Louis visited Egypt that's 1953 he visited Egypt where he was delivering three lectures on industrialization according to him the initial idea behind the two sector model of economic development in his seminal paper came to him a year before 1952 when he was I'm quoting walking down the road in Bangkok not in Cairo in Bangkok but this has nevertheless not deterred some observers to suggest that actually Louis was in many ways in many ways the Egyptian lectures the three Egyptian lectures previewed the main ideas in Louis's 1954 seminal article. After all, Louis had listed Egypt along with India and Jamaica in his paper where the so-called unlimited supply of labor was obviously the relevant assumption now just as a footnote the unlimited supply of labor refers to a two sector model where you have the traditional versus capitalist or agriculture versus industry where huge portions of workforce and population are operating in the traditional sector at very low productivity levels to the extent that if you shifted them to the modern or manufacturing sector their output loss in the traditional sector would be minimal but this could result in gains in output and productivity in the modern sector so this was very attractive because it essentially pointed to a cost-free path to structural change and transformation so Egypt was there and he alluded to it and as I said he visited now this may be a fascinating story but I'm not by any means suggesting that we can trace the genesis of Middle East economics either to Louis's seminal work or even to this era in fact my first argument is that knowledge of Middle Eastern economies as an autonomous field is of relatively recent origins and it has evolved in uneven ways this is in sharp contrast for instance with Latin America where we have significant contributions in fact we can trace the origins of development economics to contributions of Raoul Prabish and the establishment of the UN Economic Commission for Latin America so-called ECLA which led to the school the so-called structuralist school this school focused on so-called unequal exchange and bringing to question the conventional thinking along the lines of comparative advantage which mainstream economics had always alluded to meaning that developing countries should specialize in areas where they have apparent comparative advantages essentially meant developing countries should concern themselves with exporting raw materials and primary products and agricultural goods the structural school argued that far from it there is need for concerted effort by the state to focus on industries and this led to the so-called import in substitution industrialization or ISI and later on it's critique also the dependency school both the structuralist school and the dependency school can be traced and have very noticeable roots in Latin America if you look at South Asia too here also we have development planning going back to the 1950s although probably in this context influenced by the Soviet planning rather than any other school and in fact in South Asia we've had a tradition of five-year plans that go back to the very first one in 1951 to 256 and the very last one we have had 12 of them all together spanned the period 2012 to 17 Prime Minister Modi abolished these plans as of 2014 so let me reiterate the point that to suggest that big ideas in development theory did not originate in the MENA region our region does not really mean that they did not reach the region in fact in this period the 1950s and 60s what I called as the early period we have a number of important and seminal country case studies we have for instance Bahariyar on Iran we have Mabro and Radwan on Egypt Egyptian industrialization we have others focus on specific aspects like agrarian and land reform the classic work by Lampton by the way both Lampton and Radwan were so as students Lampton also worked at so as then we also have Wariner during Wariner on land form and not to forget the seminal work on economic history of the Middle East by Cook and Isavi published in early 1970 and much earlier by Isavi late 40s and early 50s before I move on from this early period it's worth pointing in mind that keeping in mind that in the 50s 60s was a period of high economic growth the region grew at 3.7 per cent per annum and in fact its productivity growth that's output per worker was the highest in the world at the same time we witness significant improvements in social indicators declining infant mortality and so on so forth let me now really come to the crux of the matter the main boost to the subject comes in the oil boom era here we have the formation of OPEC in September 1960 although during the 1960s OPEC was not particularly influential but this proved to be a turning point in the contemporary economic history of the region in the way that both its importance in the world energy and financial markets rose after the 1970s here we have the first oil boom at the end of 1973 when oil prices quadrupled at the same time as having significant oil bounties oil income flowing to the region especially oil exporters we also begin to see a qualitative shift in the way in which oil companies and oil exporting nations conduct their relations and here we have a change of ownership from foreign oil companies that's private companies to the oil countries themselves and both these factors catapulted the region into international spotlight so this is an important turning point and as I mentioned now we have the region experiencing a significant economic as it were sea change as it was no major recipient of oil windfall now in this period we see a pioneering work by Hossein Mahdavi which was published in 1970 on the rentier states when it was published and although it was focused on one of the larger oil states Iran this work was not particularly influential at the time it took a while for it to make its impact and in fact over time it has led to a copious literature that has come to correlate oil rents with poor economic outcomes i.e. the so-called the curse of oil riches so I'm going as far as arguing that oil economies would have been better off not having the benefit of oil income so that's essentially traced to the work of Hossein Mahdavi in his discussion of rentier states and I quote him here from that early work the danger that faces the rentier states is that while some of the natural resources of these countries are being fully developed by foreign concerns and considerable government expenditures usually in few cities are creating an impression of prosperity and growth he goes on to say the mass of population may remain in a backward state and the most important factors for long-run growth may receive little or no attention at all so it is very conscious of the fact that oil income would not necessarily be directed at raising overall welfare and prosperity unless you know we had the model of resource management that was capable of addressing that. My second argument tonight is that this groundbreaking work by Hossein Mahdavi actually led the foundation stone for the emergent so-called resource curse literature and I would go on further to claim that perhaps the most influential approach to manner economics since the 1970s and it is arguably one of the few theoretical contributions that seem to have originated in our region and subsequently moved outwards so this is this is something that we can as a region take credit for it and it contrasts with most debates and issues that have been borrowed from and have been from abroad and have been applied to the Middle Eastern context from elsewhere so that's a there's a sharp contrast in this period. Let me now go on to the next two decades if the 1970s was a period of oil boom and oil prosperity changing the economic calculus for the region as a whole the contrast couldn't be sharper with the 1980s and 1990s this is a period which is better known for its growth and job crisis this affected both oil exporting countries and non-oil exporting economies. In this period effectively the region's fortunes began to take a turn for the worse we had first of all the significant oil price crash of the 1980s in 1986 to be precise and we had also opened this cord and this unity within OPEC. Let's remember that two OPEC members Iran and Iraq were openly at war with each other during most of the 1980s and so this really contributed to the oil bounty drying off and with it also the oil remittances that were finding their way to non-oil exporting countries of the region and so we had a picture of deteriorating public finances rising debt shrinking public investment and these were common experiences very sharp contrast with the situation in the 1970s. Now reflecting the harsh conditions of these two decades GDP growth signed to 1% per annum and if you take into account high population growth rates in this period for the 1980s at least we have negative per capita population growth so this is this era 1980s especially in the Middle East is known as the lost decade. We had also double digit national rates of unemployment particularly high unemployment rates both at the national level but particularly amongst youth the youth bulge as I mentioned high population growth contributed to this and lack of success in job creation so it was a twin or double crisis both affecting growth and job creation and as I said the scene economic landscape changed radically from boom to bust and this course now within Middle East economics shifted from explaining the consequences or opportunities opened up by oil booms to explaining inferior economic outcome outcome and the growth crisis so there's a rather significant change. What is very interesting in this period is that also we see the rising influence of the so-called international financial institutions and donor agencies the IMF international monetary fund the World Bank get a stronger foothold in the region and particularly those countries which are struggling for economic stabilization and growth these are led for instance by Morocco, Tunisia, Jordan and Egypt and the so-called SAPS structural adjustment programs of course come with conditions austerity programs introduced with very harsh social outcomes. This is the period in which not just in the Middle East but also in the Middle East the so-called Washington consensus Washington consensus in economic economics reflects to the three institutions all three of which were in Washington or are in Washington the Treasury the US Treasury the World Bank and the IMF pushing advocating market friendly economic reforms which had two twin strategies at home domestically they pushed for economic liberalization and privatization and internationally they pushed for open access to markets both in terms of international trade and investment. In this period one could argue despite the crisis or perhaps because of the crisis actually Middle East economics is now in full swing and is addressing a much wider set of topics beyond oil and in the same period we see a significant rise in intellectual output and publications and also the expansion of research capacity in the region part of this is explained by investment by international financial institutions in various capacity building programs training programs but also a growing number of PhD graduates from the region mainly doing their PhDs in Middle East different aspects of Middle East economics in US universities and in European countries. Let me now come to the third and last period that I intend to cover and that is what is widely known as the Arab Spring although this was a very short period in terms of the expectations that were unmet. Now this period also contrasts with the previous two periods significantly in the fact that the tumultuous uprisings and political unrest that swept across the Arab world largely came as a shock. Many observers including economists especially mainstream economists were taken aback and one could argue that the upheavals came at a time they were least expected why is that because if you actually look at mainstream macro fundamentals economic indicators the first decade of the 21st century unlike the 80s and 90s actually indicates comparatively better economic growth record in the region. Growth is now up from 1% as I mentioned before reaching around the average 4 to 4 and a half percent for the region at large some countries experiencing higher some lower but comparatively speaking over time the trend line shows an improvement and even if you look at beyond growth rates poverty which is not comparatively speaking very high in the region was on the decline. I emphasize the comparative basis not saying that poverty is absent from the region and even some indications that inequality in some of the countries at least measured by conventional criteria was on the dance trend line. So probably it's not surprising that some of the international financial institutions were basking in the glory of the fact that some of the policies they had advocated in the 80s 90s were now being implemented by the Arab autocrats and they were too quick to claim credit for them going as far as even louding them for the apparently positive outcomes. There is an interesting publication by Angtad in November 2010 that's just literally a month before the Tunis uprising the first uprising in the Arab world which speaks of Tunisia as the Norway of North Africa. So you can imagine that these developments led to some blushing and proved to be rather embarrassing for some mainstream analysts. The main conundrum was that as I mentioned many countries were experiencing improvements in relative prosperity not economic downturns or stagnation in the period before the Arab spring and by this period I mean roughly 2000 to 2010 so that's the first decade of the 21st century. Now this is interesting because it seems to go against conventional thinking that generally links mass rewards to economic hardship to social degeneration contending that periods of relative prosperity are correlated with mass political quiescence. And in fact this period actually questions fundamentally this simple if not simplistic one-to-one and linear perception that uprisings and political unrest come only as a result of hardship and stagnation recession unemployment inequality. The period before as I mentioned was anything about that in fact for that you need really to dig back to the 80s 90s and I would argue further that this was not the first time we see this conundrum in fact if you think back at the to the Iranian Revolution in 1979 that also came after several years of unprecedented rise in oil income. Iran actually experienced you know unprecedented oil boom in the 70s and hence and yet we had the mass revolution in 1979 so I would argue that even in that respect the Arab uprisings probably followed a similar trend if you look at oil prices in the decade before the Arab spring 2002 to 2008 that's most of that decade oil prices are on almost one way upward street reaching an all-time high in July 2008 of about just under $150 so this is anything but a period of stagnation and recession. So I mentioned this because I think that this conundrum in itself has led to soul searching it has come as an anomaly challenging a lot of especially mainstream economies and it has sent a lot of us looking at the root causes and also consequences of these developments this was now an important challenge. Now in highlighting better than expected economic performance in the region in that 10-year period I'm not overlooking the fragilities and I just want to look at two aspects one is the age composition and another one is unemployment rates before I quickly move on. If you look at this as we know the Middle East region is a very young region if you look at the median age of population in number of countries for example median age is the 50% cutoff point so 50% of the population is below the median age and another 50% exactly same share above it. In Tunisia and Egypt which experienced the Arab uprisings first the median age is upper 20s. Yemen is a very very young country these figures are back right away by 2010 for 2010. Yemen in Yemen 50% of the population were born in the previous 17 years only and in the West Bank and Gaza that's only 20 years. If you want to put this in context compare this with say European countries or the USA you're typically looking at median ages of upper 30s lower 40s. Japan has a very high median age of 48 years so the age composition is very different. Anyway so this is a very young structure of population which is probably why the youth played an important part in the uprisings but more importantly perhaps the limitations I mentioned in terms of job creation and the growth in the number of those with jobs. I've highlighted here both national unemployment rates in yellow in light blue and in dark blue you have youth unemployment and you can see for instance in West Bank and Gaza youth unemployment is 40%. In Iraq it was above 40%. In Saudi Arabia in the middle almost 30%. In fact the Middle East and North Africa as many of us know has some of the highest youth unemployment rates in the world and typically almost all double digit. So this is the sort of fragility that despite growth we continue to envisage. I mentioned the anomalies relating to the Arab uprisings led to a degree of soul searching in various fields economics was not Middle East economics was no exception. It led to questions relating to for instance were we not looking where we remiss at the wider more important undercurrents or maybe we were looking but looking through the wrong lenses or our glasses were tarnished that is maybe we're looking at the wrong indicators we should be changing focus or alternatively maybe we had the right data we were looking at the right indicators but it was our weak deductive powers that let us down and that is where I mentioned the association between economic conditions and political upheavals maybe we need to rethink about that and at any rate we can't also rule out the possibility that uprisings were mainly of a political rather than economic character perhaps no there's no reason why all uprisings have an economic root as such and it is probably fair to suggest that the so-called Arab Spring had as many lessons for economists and for political scientists but since my focus on Middle East economics I'm obviously naturally interested in exploring the impact of these developments and by way of its legacy what is interesting I mean both quantitative and qualitative transformations of the subject actually take place when we seem least able to understand phenomena as Danny Rodrik once said anomalies are good for social sciences if you are operating in our comfort zone we are less likely to be curious and when we are confronted with anomalies we are more likely to search for answers and and I think this period has been in this respect also quite productive at the quantitative level Middle East economics has received a boost we see greater interest in research which has resulted in greater volume of publications greater attention to output seminars workshops and so on but perhaps even more importantly it has widened it has helped it has contributed to widening the scope and coverage of the political economy of men whereas before we were more likely to be operating within silos I think these tumultuous developments reminded us of the importance of opening up our perspectives and engaging with other questions and problems from other disciplines I would make a third remark and that is it is probably fair to suggest that among economists now there is arguably greater and more explicit recognition of the importance of political and social factors now how long this may continue I don't know it may be that we go back to our own old habits the young generation within the economics discipline is under pressure to publish or perish or risk perishing publications within mainstream economics require dealing with large datasets and do not always look favorably five-star journals do not look favorably on interdisciplinary research so it may be that this is a window of opportunity which may not last for long and it may close before long but I think one positive outcome of this period even if limited to a limited extent has been this wider and richer scope and diversity of the topics some of which I have listed here so economists within Middle East economics now much more readily engage with topics such as poverty and inequality human development the role of religion and islamic development crony capitalism governance and transition to democracy gender of course and impacts of conflict and forced displacement or refugees none of these topics are new I'm not saying that they can only and exclusively be traced to the Arab Spring years but Arab Spring and the uprisings have given them a degree of poignancy which in our region cannot be missed to wrap up this particular section I want to ask the question that I alluded to did economic factors matter in the Arab context I don't myself subscribe to the view that it was only economic factors although economics was a context and we would need to understand economic factors in order to shed light on these developments which were essentially driven by in my view aspirations if not frustrations of the urban educated middle classes youth included of course for greater freedom and better governance and respect of too long suffering from corruption from crony capitalism and of course blatant dictatorship and lack of respect for freedom and human rights okay I'm coming up to the end of my presentation let me offer some concluding remarks so where does the subject stand and where do we how can we reflect on its what I call the bumpy road coming up age over the last 50 years I would say the subject has been much enriched by developments in the region some of which I explained through different periods with sharp contrast from one to another it is now recognizable as a field but Middle East economics somehow uncomfortably sits between two disciplines broad disciplines one is areas studies on one hand and another is mainstream economics now sitting at the intersection or on the boundaries of two disciplines can help enrich the subject but it also poses challenges within areas studies the main challenges Middle East economics has to try and avoid the pitfalls of exceptionalism especially given the disappointments and the failures of the Arab spring there's a possibility of Arab exceptionalism coming back and that that is something that generally Middle East studies at large but Middle East economics being no exception have to be concerned with if you look at economics especially mainstream economics we also have to avoid the limitations of getting mild if not bogged down with growing in growing mathematical finesse and sophisticated model building this is to a large extent the story of modern day economics discipline in mainstream academic departments the emphasis on quantitative formal testing model building is phenomenal and and of course Middle East economics will not be immune has not been immune from it but that is where also we risk losing perspective of some of the most fundamental and important problems and challenges of our region I want to end by quoting Danny Rodrik a famous economist MIT of Turkish origins he once observed we use maths in economics not because we are smart but because we are not smart enough in other words there's another way of saying the same thing without being too impressive utilizing mathematics maths has its own place in economics it's a useful language but it should not come at the expense of replacing our encounter with serious and fundamental challenges which our region has faced in the last 50 years and will continue to face no doubt happily the region can boast a lot of talent not just natural resources but also a lot of talent and economics is no exception to this so let me end there I think I've managed to stay within the time boundary that Dina set me 46 minutes so if you permit me I will now stop sharing so that we can move to okay thank you so much Hasan to a really really impressive broad sweep of the of the economics and the field of the Middle East I might have some question later on but I'm going to go to questions in the audience please remember that you have to put your question in the Q&A chat because I know someone has raised their hand but we cannot take a raised hand because we can't see you or we can't offer you the platform I think the first one we have just three questions but we go through them I don't think the first one is a question it says someone has said that to undermine a state is to undermine its currency so with the astronomical devaluation of the respective national currency versus the US dollar are each of Iraq neighboring Iran Syria Lebanon Yemen and Libya fragile fading or failed states what about UN involvement and apparently the solution is to is to avert it so I but I think that the question here is whether whether we can relate economics widely or understanding of the economics in the region to to the currency or to how the currency can be devalued against the dollar and of course this raises much bigger questions so I don't know whether you you can I can address that briefly I mean obviously this is a very big question and I don't want to pretend I have an answer I don't think all these countries listed here Iran Syria Lebanon Yemen and Libya are all failed states certainly Iran is not yet I hope it won't be because that's that would be kilometers for the region however sadly we have witnessed far too many failed states in the region for our liking especially after the Arab uprisings and Lebanon which has always been known to be characterized by a weak state for very different reasons than for Yemen or Libya or even Syria unfortunately seems to be heading that way this this the question of the currency currency is in a sense the symptom of wider malaise and here I know it is all too tempting to blame failures within the economy to external intervention factors of the sort and of course these are very very important I mean I some of my own personal work has focused on the cruelty of economic sanctions in the region which our regional knows only too well I mean you look at Gaza you know this is this is an economy under siege the textbook definition of blockade and sanctions is Gaza Iran has been experiencing some of the toughest sanctions not by my description by the descriptions description of those who have imposed it they take pride in the fact that these are some of the same toughest sanctions in history even Joe Biden vice president Joe Biden into his 2010 debate he took this is at the time of Obama he took credit for having imposed his administration having imposed some of the toughest sanctions on Iran so yes sanctions and external factors I mean the case of Iraq of course the 2003 intervention there's a whole host of external influences that have had a deleterious impact on the economies of the region Libya Syria and so on so forth but this is not to lessen the importance of proper and competent economic management either a lot of Iran's economic problems are also to do with economic mismanagement and and this is very difficult to disentangle the one from the other for this we might just look at a natural experiment in 2016 when the so-called JCPOA the nuclear deal with the US was signed and some of and I emphasize at least some of those sanctions not all of them by any means were abolished Iranian economy took off in 2016 it grew by 12 and a half percent now a lot of this was to do with the fact that the oil sector regained its pre sanctions importance in the economy but it did show the potential for growth domestic growth if these sanctions were not in place so the same with Lebanon I mean you know Lebanon Lebanese currency has collapsed we could blame this on external forces and intervention in Lebanese economy and the sectarian divide and how this has been really nefarious has had nefarious impact on the Lebanese economy but but you know one cannot underrate the importance of economic mismanagement the classic case is Greece when Greece experienced its euro crisis you would remember that this was at the back of the fact that there were fraudulent national statistics being published year after year after year because the statistical agency in Greece was basically at the service of the government and they published data that pleased the European Union and it was not until after the crisis when Greece took steps to establish an independent statistical agency that had no fear of telling the economic story as it was that you know the problems could be could be addressed so it's a very complicated combination of both internal and external factors and if anybody claims they have the a clear formula that enables them to disentangle the domestic from the external I would caution against that thank you a few questions coming through one by Mera Jacob saying looking ahead and considering the lessons of the Arab pricings what would you expect to happen to the rent economies of the Middle East considering the global ecological transformation how can these economies based mostly on rent try to adapt to this change it's a big question I guess yeah yes but this is a critical question that with or without Arab uprisings the oil exporters would have to address as we speak the oil exporters are benefiting from a rebound in oil prices oil and gas prices actually well gas has been in the news I'm sure as consumers in the UK and in Europe you hear a lot about the significant surge in gas prices it may appear looking at it from the side of the exporters that the worst is over no I think I think all these all these fluctuations in energy prices the ups and downs and let's not forget that during the COVID in the last year or so we had a significant crash in oil prices it's a reminder of the need to think long term and to aim to diversify economies everybody knows that you know there's a significant risk to economic strategies continuing to rely on oil riches energy riches in the long term the risk is that with alternative technology with growing importance of renewable technology which is already happening with electrification of transport which is already happening with growing government commitment to ceasing co2 generated field cars and so on there's every possibility that oil exporting countries may end up with a lot of what is now known as standard assets under the ground this is by by the way partly why the UAE had a spat with Saudi Arabia back a few months ago because it wanted to increase its oil quota taking advantage of the fact that you make a run for it while you can i.e if there is if demand for oil is now going up and if they are concerned about inability in the long term ending up with unsolved oil this is the time to expand output and sell and export more so this consideration is serious some of the smaller Gulf states like Qatar where I am now have made a deliberate and significant investments into diversifying in niche areas like culture like sports museums and so on whether this will be sustainable into the long term remains to be seen but the effort is there the awareness is there and I don't think whether we or without Arab uprisings the the argument that you can continue to rely on oil and energy resources in the long term would hold water yeah thank you very much and there's a there's a question or a comment about a possible role of displaced diasporic men as scholars in the growth of many economic research but you know probably we can answer that later but I would like to ask a question from Thais Hamza is there a meaningful economic progress without unleashing the ability of social forces to express and organize itself to gain a piece of the cake so does this in turn necessitate certain political freedoms and rights to organize hence some democratic norms and accountability from governments so the question is really is about politics and economics going hand in hand presumably and whether you could comment on this yeah this is this is an old puzzle and it surfaces in the literature and in the debates in different ways uh empirically in economics there have been some studies to try and establish whether more democratic economies perform better economically to so to speak or not and and really the the evidence is mixed you have on one hand strong states the so-called developmental states you have the example of of course China which is the prominent example where uh political liberalization liberalization has taken a secondary role to economic liberalization so the evidence is mixed but I think where I would agree with the questioner with Thais is the importance in the long term of making sure that economic growth benefits large sections of the population it's not just to secure better outcomes but to secure sustainability I think if there is one overriding lesson from the Arab uprisings is that the period I referred to the 10 years or the decade before the Arab uprisings relatively speaking economic growth record was decent growth rates at four to four and a half percent were achieved in fact uh Libya was recording growth rates at around seven percent uh Tunisia and Tunisia and Egypt likewise you know they had a decent economic record what was important was however the type of economic record the type of economic outcome and you know if you have growth which is concentrated at top end of the population which is contributing to greater alienation growing uh inequality even if in relative terms or perceptions of inequality uh what I refer to as crony capitalism if growth takes place through engines which are uh the preserves and cronies of the ruling state you can be sure that you know sometime or other political developments will catch up with the economy yeah I think that was one important overriding example another part of my own personal research in the last few years has focused precisely what we now refer to as inclusive growth the importance of growth that is inclusive that benefits why their sections of the population and it is not limited or constrained to certain and limited segments only I think this is this is an important challenge uh the in the chinese context if you put aside governance and political development or lack of them to one side even economic uh record speaks of an uneven record of achievements you have very impressive growth rates over decades reaching uh on average around nine percent now it's lower it's around six percent or so and is looking a little bit fragile for reasons that uh have to do with uh energy supplies and also the need for increasing their share of renewable energies in the energy mix but but that record has been even more impressive in terms of china's ability to reduce poverty at least headcount extreme poverty the share of the population the number of population falling below one dollar ninety or as it used to be one dollar twenty five in the past several hundred million uh people have been pushed above this threshold uh which is an achievement um but nevertheless inequality has been growing inequality both in spatial terms between the east coast and the western uh mainland or between rural and urban areas and between different income groups now it's no secret that in china you have the largest concentration of billionaires or millionaires so yes I agree with the spirit of the question uh meaningful economic progress would require unleashing social and political forces especially looked at from a long-term perspective that's that's an important lesson on the arable prices thank you there are two points by Karen uh breven she says that well thank you for the great lecture so that that is wonderful to hear there's a question about hasn't the resource curse theory rent here stayed et cetera being debunked don't the results depend on what policy structures and social and class formations are in place and and in relation to this despite the relative growth that you alluded to before the arab spring isn't income and wealth inequality in the middle east some of the highest in the world um so these are two related questions yeah the resource curse has it been debunked well depends on the perspective there are people who still believe in resource cares and there are people who never believed in resource cares i myself being one and there are people who might have believed in resource cares but now don't believe in it anymore um so you know old approaches uh ideologies don't dry out they come back in different forms and in different guises uh and yes i i fully agree that the so-called resource curse is on weak ground if it is seen as an eternal destiny i.e. that equates natural riches and income from uh booms associated with those natural riches exports with poor outcomes your doom if you're rich yeah if you turn this equation around the other side of the coin is glory there's glory in poverty i'm sorry i personally speaking i don't i don't buy that story uh which one would you prefer to be would you prefer rather the riches that you need to manage properly or you prefer to have poverty that is supposed to bring satisfaction and welfare there are different i mean to be fair to resource cares there are different strands there are different versions and and i mentioned very clearly the rentier state which is a political economy approach this one really focuses on the implications of the concentration of significant amounts of resources typically within uh you know the government sector because oil oil income accrues to the government the government is therefore independent or has certain degree of significant degree of relative autonomy from social classes because it does not need to raise income through taxes so it's less accountable that's number one number two you could also argue and people have certainly argued that the fact that the region is rich in natural resources has always contributed to external interest hence external interest in the region hence these conflicts i remember very clearly there was intense debate when the u.s. invasion of iraq took place in 2003 march 2003 that a lot of people attributed that to the ever insatiable appetite or thirst for the u.s. economy to secure affordable long-term and sustainable supplies of oil well that is one perspective what what what when you look at what happened the oil prices after 2003 2000 period i mentioned earlier to 2008 they kept going up if that was the intention or the strategic aspiration of the u.s. to secure oil supplies it it felt miserably so yes there are aspects of rentier state whether focusing on domestic factors or external that are enlightening they are important we should engage with them but this simplistic argument that you know riches bring misery and rather polemically as i put it poverty brings glory i think that's probably the easier version to debunk or dismiss the second question despite the relative growth isn't income and wealth inequality yeah you know i can refer you inequality in the region is actually one of the topics the book i mentioned covers again there are different perspectives on this if you look at standard conventional criteria for measuring inequality in the works of the world bank and so on in fact a country like Egypt was showing declining inequality at the so-called genie coefficient was in the sort of mid 30s if you look at south africa brazil they're systematically above 50 they were way over way over um so i think by on those comparative grounds if you compare like with like i conventional criteria such as genie coefficient the region is not best known for its high inequality but there are people who have questioned the methodology typically pointing out that the top 20 percent or the top 10 percent in these income surveys are either missed systematically or understate their income so there are a lot of grounds for suspecting the the you know accuracy or precision of these data and i think it's a healthy thing to maintain those yeah and there are two questions related to oil one of them i will i will read but the first one is by frederick becker saying how do you see the economic situation when the oil reserves will have finished which impact could it have on the societies of the Arab Arab world big question yeah well i i'm really not here to predict the future uh you know with or without oil and of course it's worth remembering that we have both types of these economies in the men are region not all economies are oil exporters um with or without oil they have challenges they have to address them um so if you don't have oil the situation will be even more challenging as we have seen periodically when oil prices crash it's very hard to fathom the fact that when we had the oil price boom in the 70s they crashed to below ten dollars a barrel by 1986 and this is a an ongoing story you know we've had after the global financial crisis in 2008 when i mentioned oil prices reached an old-time high of just under 150 dollars july 2008 by january 2009 that's less than a year oil prices had plummeted to 39 dollars for a short period but nevertheless what goes up can come down and what goes down can come back up now in fact there are economists to point out to these excessive fluctuations as being unsettling and being a major challenge so it's not just having the oil income but dealing with the fluctuations and now there are of course policies addressing those fluctuations namely setting up sovereign wealth funds and foreign currency reserves within the central banks to smooth out the fiscal impact of fluctuating oil income it's a challenge with or without but i think long-term speaking it goes back to the earlier question there's no doubt that there's no doubt that diversification and attempting to diversify is the way forward and this comes to the question by okran says do you see any potential success in the effort for diversification through global investment as well as through some non-oil regional investment or is it a middle east with less and less economic assets more likely as oil diminishes so yeah and what about the wider regional effect considering the remittances of the economy so it's you know around the same topic we are hovering around fascination with oil which is understandable i mean there are people who question whether countries like for instance Dubai or even Qatar have not escaped the oil so-called oil curse both have to a significant extent tried to diversify Qatar is now more gas exporting dependent than oil that is probably why it left OPEC in 2018 and it has made a huge effort to diversify its economy it's a small economy the local population is only 10 percent of the total that's about just under 300 000 out of less than three million to what extent you can generalize on the basis of what is essentially a city-state for the larger more complex and more complicated economies like Jordan, Egypt, Libya, Iran, Algeria, Lebanon and so on that that remains to be seen so i think Dubai also itself you know Dubai itself has made important strides in this field and maybe following Singapore as a role model has been the main model that Dubai has followed so far to a large extent successfully so yes but looking at outside the region the clear case is Norway Norway is an oil economy as well although an industrialized one one which is developed its oil industry is managed in a very very different way than Middle Eastern economies as you know all oil income is invested wholly in a sovereign wealth fund which i think is probably the largest in the world and which is devoted exclusively to maintaining welfare and well-being of future generations so it is not spent on current consumption by any means it is true that you know Norway benefits from oil income after it had developed industries and it had industrialized so the elements of diversification and industrialization were already there but they're very interesting examples that our region can draw from there are also then the east Asian economies i saw one of the questions touched on this the so-called Asian Tigers i mean here you have not so much focus on natural riches but the vision and the commitment of a central developmental state that has mobilized resources around a long-term vision of growth and structural transformation one could argue that Iran pre-revolution fitted into that framework let's not forget that Iran between 1960 and 79 for a good part of two decades although it was an oil economy it was growing at nine percent in real terms per annum and this occurred not just because of growing contribution of oil but because of a big push for industrialization following the so-called import substitution model and one which resulted in you know a significant degree of diversification all this talk about opaque and so on i used i used to cover opaque summits and meetings so very very knowledgeable of the you know the the machine and the political machining machinations behind it but i have i have a quick question to you because i was really i want to go back to the critical reflections i know there's a question about you as sanctions and so on but i wonder you know whether you could elaborate a bit further on the fact that economists were not looking in the right place when the Arab appraisings happened or before the Arab appraisings and whether what you know how that has affected let us say the the the ground theorization in in mainstream economics or has it not you know in a sense because in other disciplines there's been this kind of revisionist thinking around okay where are we looking in the wrong place in in relation to kind of these ruptures so perhaps you could talk about that very briefly but there is another question coming up around the current US sanctions regime how important are these in terms of development growth of the economies of their manner and you have about five minutes your question lessons from the Arab appraisings and the likely lasting long-term impact on the discipline i'm not so optimistic i think we are humans we are impacted by short-term swings and long-term trends we also have short memory we forget we tend to forget things memory of arab spring is already a distant memory i'm sorry to say i remember very exciting moments when i saw us so not least in these very same seminars we were debating new possibilities and you don't perhaps that the Arab spring the Arab appraisings may have opened up i actually wrote a very short piece on the economics of the Arab appraisings which i subtitled as a bumpy road ahead and i i highlighted i'm not usually a pessimistic person by any means or chance but i highlighted two main challenges despite this euphoria which was which i shared of course myself very exciting times one of which was the massive explosion in popular demands you know it's a misfortune to happen to be in an administration that has to deliver everything for everybody yesterday given the revolutionary zeal with which you know people engage in their lives they make demands they are entitled to a better system of delivery of course but it's much more difficult to actually deliver those even a fraction of those expectations even if you had relative political stability even if you have sustainable governments which in most cases we didn't even or especially Egypt uh nevertheless any incoming administration even if it had the competency to deal with challenging economic situations that very factor of dealing with explosion in popular demands and expectations with with and and the populist pressure to distribute first and then think about growth i mean throughout this talk maybe i've sounded a little bit too critical of growth record but you can't you can't just throw the baby out with the bathwater the question is to have growth and maintain growth and make sure growth is inclusive if you oh on the rate growth well you're back to recession you're back to unemployment you are back to global financial crisis so you know you cannot dismiss growth you have to make sure it's the right type of growth and and hence i think as i said earlier the one last thing lesson from the arable crisis i hope would be the relative importance of the need to make sure growth is inclusive not exclusive thank you hajan sanctions is a big topic i can offer to talk another session for another seminar this is something which is very close to my research interest in fact in the middle east institute in the past i have spoken on this topic but really to do it justice you know we need more time thank you so much and apologies to fanny but we can answer that in another in another session so we have to get you back hasan to talk but maybe we can have the book launch and we can we can be part of that as well but i want to thank you for a very interesting talk i learned a lot myself and i'm sure that our audience did as well thank you so much for your questions and thank you to ackee for hosting this and supporting us and the sores middle east institute and look forward to seeing you again and please keep an eye out for all our events on our website thanks thank you so much okay thank you have a good evening and you too good good evening