The Forum for Partners in Iran's Marketplace

September 2004 / No. 31

Global Economy

The Middle East’s Role in World Trade

Stability, democracy and prosperity in the region cannot be achieved through threat, embargo, punishment, interference as well as political and economic force.

In the new world order after the implosion of the bipolar system, competition combined with regional and international cooperation will replace military and political conflicts. Due to less significance of sovereign borders and conflicts over interests, role of national governments has changed to competition for providing necessary infrastructural conditions aimed at increasing share from global economy and markets. Therefore, such circumstances which are a result of technical developments and obligatory necessities for all countries including the United States and other dominant countries in global power structure: Firstly put an end to zero sum game (winner and loser in dealings) for countries which adapt to new conditions and regulations, and secondly, force the hegemonic power in the new cultural structure of the world to prove legitimacy of even its unilateral decisions through multilateralism and coalition mechanism. This means that no country, including the United States will be able to impose its unilateral views in international relations and should a substantial change occur, the current international bodies (the United Nations, World Bank, International Monetary Fund, NATO, World Trade Organization...) and other management tools of the modern world will undertake a more active role compared to the past. The United States will be able to play a hegemonic role in global capitalism through the same bodies and participation of superior powers and through respecting the interests of all concerned countries including developing ones.

Undoubtedly, in the course of establishing new international relations, future developments of the Middle East, including Iran, are of special importance. To better understand conditions of regional developments and their adaptation to the process of globalization as well as motivations behind measures taken and programs considered by global capitalism topped by the United States, it is necessary to evaluate specifications of the region and its crisis and challenge domains to get a realistic grasp of opportunities and threats regarding national interests and their attunement to the process of globalization.

Status of Middle East in New International Relations: The Middle East and North Africa is a vast region which has been faced with a chain of irrational events, unbridled regional violence, economic, political and social challenges and superficial reforms for about a whole century, especially over the last four decades of the 20th century in such a way that instability and turbulence has prevented necessary grounds to be provided for sustainable economic growth in this part of Asia and Africa, just as it has happened in many newly industrialized countries.

The region is still facing a huge young population seeking jobs and it appears that unemployment is a major threat to internal stability throughout the region.

Devastating regional wars have greatly harmed the overall capabilities of Middle Eastern countries while ethnic and cultural extremism has proved a major impediment to development process. Three wars between Arabs and Israel, a 14-year ethnic war in Lebanon, two decades of destructive war in Afghanistan, armed clashes between Turkish government and Kurd ethnic groups, three big wars with international involvement in the Persian Gulf and the current occupation of Afghanistan and Iraq by the U.S.-led coalition and continuation of bloody clashes among Palestinians and the Israeli government have created a situation in the Middle East with a population of about 300 million that if continued, will dash all hopes for a promising future in the years to come.

Undoubtedly, during the past decades, oil reserves, oil-related economic rents in the region as well as geo-economic position and strategic location of the Middle East—as a link between Asia, Africa and Europe—should be considered major reasons for tension and instability as well as the unstable economic and political situation.

Internal Convergence and Links to Global Economy: What happened after the September 11th, 2001 terror attacks including occupation of Afghanistan and Iraq, indicate long-term objectives of dominant forces in the region for harmonizing the situation in the region with global trends, and creating a new age of stability, democracy and prosperity in the region under U.S. influence. This is undoubtedly influenced by exceptional and unbalanced situation in the Middle East and North Africa. Since there is no clear demarcation among national, regional and international tensions in the Middle East as opposed to other parts of the world and since existence of about two-thirds of global oil reserves is a good breeding ground for interference of advanced industrial nations in political and economic affairs of the region, the general situation in Middle East (economic, political, cultural, and social) is of high priority for global capitalistic plans devised by world powers topped by the United States to manage this sensitive part of the world and keep up a continued flow of energy under less tense circumstances during, at least, the first three decades of the 21st century.

In their new approach after the collapse of a bipolar world system, the coalition countries aim to realize new policies based on establishment of new American military order in the Middle East under the aegis of democratization of the region with the main goals being the establishment and connection of big and semi-permanent military bases in countries forming the arch of instability (from Balkans to Chinese borders), managing oil reserves, using occupation as a sign of hegemony of the United States in the world, eliminating Arab pressure on Israel concurrent with making the latter withdraw from the West Bank and Gaza Strip to pave the way for establishment of an independent Palestinian state, forming a Shiite–Sunni federation and integrating demands raised by Kurd ethnic group within framework of democracy and participation with other ethnic groups and nations, and establishing secular trends among traditional communities in the region.

The ruling party in the United States believes that realization of all or part of the said goals will pave the way for establishment of a safer investment milieu, implementing efficient structural and institutional reforms, achieving more rapid growth, and symmetric integration of the region into the global economy to control future challenges (that will jeopardize access to regional energy sources and taking advantage of the superior strategic situation in the region with regard to global trade and communications) in the Middle East and North Africa as a consolidated economic and geographic unit. In other words, stabilization and guarantee of political and security goals through improving economic situation in regional countries including uplifting the middle class, as well as increasing welfare and living standards in a bid to alleviate political tensions and anti-West sentiments to guarantee smooth flow of Middle East oil towards global markets and, simultaneously, expanding and deepening political and economic ties between the United States and regional countries and strengthening its hegemonic position to face competition from other powers, are major and determining considerations for establishment of new relations in the region.

The Middle East ranks the lowest in the world in terms of food self-sufficiency. Some international observers do not rule out the possibility of regional wars over water resources.

The most important plans proposed by the United States during recent developments for rearranging the Middle East region (some of which is already underway) include:

  • Establishment of a free trade zone between the United States and Middle Eastern countries within the next 10 years;

  • Concluding bilateral and multilateral trade and investment agreements and negotiations for improving trade and investment regimes with some counties in the Middle East and North Africa (examples are conclusion of bilateral trade agreements with Jordan and Israel, and recently, Morocco);

  • Supporting economic and trade liberalization policies and structural reforms as well as getting regional countries into the World Trade Organization;

  • Participation in restructuring and reforming financial, trade, industrial and legal structures of regional countries;

  • Educational and encouraging measures aimed at spreading civil freedoms and law enforcement as well as promoting status of women and reforming social relations in regional countries.

It is obvious that political and economic reforms in the Middle East and North Africa are an internal affair whose realization will only be possible through understanding necessity of reforms and its requisites and reaching a general consensus with regard to political and social structures of regional countries. Foreign pressure to push on reforms in the context of anti-American sentiments that have built up in the region could be a factor leading to negative resistance to reforms and postponing them, which will finally damage the establishment of a sustainable development trend in the region and result in continuation of instability and spread of current crises as well as continued dependence on oil revenues and economic backwardness, which would be in contradiction to long-term interests of both regional countries and global capitalism. Stability, democracy and prosperity in the region cannot be achieved through threat, embargo, punishment, interference as well as political and economic force or through foreign pressure for implementation of reforms, and use of the said tools could only lead to more chaos and intensification of current crises (as witnessed in Iraq).

Such negative and unilateral measures should be inevitably replaced with positive, multilateral moves and participation of the international community and international institutions in reconstruction as well as helping growth trend and reforms in regional countries. At the same time, it is imperative for regional countries to understand that they can only overcome their problems, crises and current vulnerabilities gradually through rapid and sustainable growth and industrial development and through reliance on intra-regional convergence and integration into the global economy.

New policies adopted by Iran for structural reforms with emphasis on economic liberalization and integration into the global economy as well as new approaches taken for detente and expansion of regional cooperation, which aim to get the country in line with the globalization trend of economy and industry and regulations governing the new atmosphere of global economy, could provide Iran with good opportunities for taking advantage of positive and constructive events and achieving a superior situation in the region through intelligent handling of new conditions in the Middle East as well as international political relations according to present and potential capabilities of the country.


Subscribe to

  Sep.  2004 / No. 31