Connectivity, not oil, will drive the Middle East’s future
On the very day that US President Joe Biden lands in Saudi Arabia Friday, nearly 200,000 containers will be making their way to ports from Tangier to Dubai, hundreds of thousands of airline passengers will transit through the region’s airports, millions of dollars in remittances will be flowing from the region to the developing world and countless American companies will be selling their wares to a growing Arab middle class.
Oil and gas, once the main draws for the West, will almost be an afterthought. In other words, it will be just another day of business in the Middle East and North Africa.
For too long, the United States’ regional policy has focused almost entirely on the triumvirate of security, geopolitics, and oil. It is time for the US and the broader Western world to widen its vision and see the MENA region for what it is, and not a caricature of what it was in the 1970s.
When the American naval strategist Alfred Thayer Mahan coined the term “Middle East” in the early 20th century, he was looking for a way to describe the lands between India and Europe. The moniker stuck. That term, however, is confining, burdened with the baggage of conflict, redolent of colonialism. Worst of all, like Biden’s oft-repeated autocracy-democracy binary, it is simply not useful.
But while the term itself is dated, the countries that the term encompasses do have much in common, including strategic commercial geography. They are more Middle World than Middle East and the real dividing line for future success will be connectivity to the wider world, not religious sect or geopolitical alliances or form of government.
Consider the region’s air connectivity. Most of the Gulf Arab states and Iran have cities that are a four-hour flight to one-third of the world and an eight-hour flight to two-thirds of the planet.
To capitalise on this enviable air geography, Dubai, Doha, Abu Dhabi and also Istanbul, have created air hubs, with considerable success. In 2014, Dubai International Airport surpassed London Heathrow as the busiest international airport in the world. It is a similar story with supply chain and trade connectivity. Several North African states have enviable Mediterranean coasts and easy air and trade access to Europe. Morocco and Tunisia have become key parts of automotive and aerospace supply chains in Europe and Egypt’s Suez Canal sees some 30 percent of the world’s container trade pass through its waters annually.
The author and journalist Kim Ghattas, in her excellent book, “The Black Wave,” reminds us of how consequential 1979 was in shaping the region. That year witnessed the Iranian revolution, the Soviet invasion of Afghanistan and the seizure of the Grand Mosque in Mecca, events that empowered both Sunni and Shia Islamist radicals for a generation and cowed Saudi rulers into a policy of soft-pedalling and co-optation of its own extremists.
Those days are now over in Saudi Arabia, witness the social transformation of the kingdom in recent years. But if we go back to 1979, there was another less-heralded event that is also worth remembering: the opening of Jebel Ali port in Dubai, today one of the busiest ports in the world. With stacked containers as far as the eye can see, Jebel Ali is both a symbol of globalisation and an example of local leadership in action. The port and associated free zones leveraged a never-depleting resource, Dubai’s geography, to build a major trade and shipping hub.
Saudi Arabia’s investments in the infrastructure of connectivity, airports, rail, seaports, are also supporting regional and global recoveries. A recent World Bank report listed King Abdullah Port in Jeddah as the most efficient container terminal in the world.
Meanwhile, Saudi Arabia is pumping billions into its own aviation sector, aiming to more than triple the number of passengers that fly through its airports by 2030. Before the pandemic, the global travel and tourism industry accounted for one in ten global jobs and more than ten percent of global GDP. Today, the region’s airlines, Emirates, Qatar Airways, Turkish Airlines and Saudia, are leading the global recovery in this sector, too.
More broadly, GCC countries are contributing to economic connectivity through remittances and aid. Remittances far outpace foreign aid and direct investment and are the largest source of foreign currency earnings in low and middle-income countries. Over the past decade, hundreds of billions of dollars have flowed from Gulf Arab states to the developing world, most notably South Asia. Those remittances are a vital part of the development story.
Finally, a rising tech entrepreneurial class has become a top source of economic pride. Biden would do well to step beyond the palaces and meet people like Fadi Ghandour, the Jordanian business leader who founded the FedEx of the region, Aramex and who today serves as an angel investor for the women and men creating and building new start-ups from Amman to Abu Dhabi. The region’s start-ups attracted nearly $1 billion in the first quarter of this year, a doubling of last year’s tally.
While this rising connectivity offers hope, there remain spectacular failures.
Exhibit A is Lebanon, a country of talented people held hostage by craven politicians, currently experiencing one of the worst economic meltdowns of the modern era. It is a similar story in Iran. The region’s non-oil states, meanwhile, are facing stubbornly high unemployment, rising energy prices, supply chain disruptions and a global slowdown.
But these challenges should not obscure a broader opportunity. The MENA region is blessed with a resource that never depletes: strategic geography. The countries and cities that leverage their geographies will be well-suited to compete into the 21st century. Those that fail will remain regional laggards, part of the old “Middle East,” rather than the emerging Middle World. That is the story Biden should be watching and supporting.