Economic Growth

The Middle East has experienced both growth and decline cycle over the past thirty years. From 1965 to 1985 the Middle East experienced a tremendous econmic expansion. This growth was facilitated by the dramatic rise in oil prices, which were related to the 1973 Arab-Israeli War and the 1979 Iranian Revolution.

Due to oil price rise, most Middle Eastern States benefited. Impact was directly felt in the oil-producing states (especially large producers such as Saudi Arabia, Iran, Iraq, Kuwait, the United Arab Emirates, and Qatar) and benefited directly in the form of high export earnings. Likewise, these states had many job opportunities available as a result of the booming economies of the Gulf. The non oil-producing Middle Eastern states also reaped some benefits from the oil-producing states.

The economic growth of the 1970s and early 1980s came to a decline in 1986 when the price of oil fell dramatically from $28 per barrel in December 1985 to $10 per barrel in July 1986. The drop in price was a result of the overproduction of oil. Suddenly, the huge foreign export earnings that had driven the growth of the last two decades were drastically reduced. However, the Middle East economy has once again taken off to a new height in the recent years. Oil consumption in both China and India have gone up significantly. As the demand for oil grew, oil price went up trading it for as high as US $145 per barrel.

Heavy investment in infrastructure in the Middle East can be witnessed. The outlook for the many middle eastern states is sharply different today from 30 years ago.

Hillsdale Group envisions to be an integral part of the investment community in the Middle East in the near future.