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Economic History > Middle East and Africa (chap 11) > Flashcards

Middle East and Africa (chap 11) Flashcards

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1
Q

What is OPEC?

A

Oil producing countries of the Middle East

OPEC-Organization of Petroleum Exporting Countries

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2
Q

What conditions the members of OPEC must satisfy?

A
  1. Demand must be inelastic
  2. the members must be able to agree on production quotas
  3. Mechanism to enforce the agreed upon prices and quotas
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3
Q

When was the first oil crisis ?

A

1973

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4
Q

what happen in 1973 ?

A

-October War / Kippur War
- Embargo to oil importer countries that back up Israel
(USA, Portugal, Netherlands)

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5
Q

In the first oil crisis , what action where taken by OPEC members ?

A
  • Cut in production of 20%
  • Prices rose by 400% in months, average rate of + 20%
  • Little attempt at conservation, demand fell by 6%(Inelastic Demand).
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6
Q

what incentive the Second Oil Crisis( 1979)?

A
  • The islamic revolution in Iran (1979) disrupted oil supply
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7
Q

From the First Oil Crisis to Second, what had change?

A
  1. The previous increase in price in 1973 had made it worthwhile for new producers outside of OPEC to enter the market.
  2. Attermp at conservation
  3. Central Banks became more concerned about inflation , therefore, tougher monetary policies cause a severe recession.
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8
Q

which crisis generated more revenue ? 1973 or 1979?

A

1973 was the most successful in transfer of wealth to producing states

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9
Q

wha happens with the non-oil exporting countries?(Middle East)

A

Economic Decline since 1970

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10
Q

What problems faced the non-oil exporting countries?

A
  1. Demographic changes
  2. Import Substitution policies (industrial)
  3. Financial instability and market labour instability.
  4. Political instability
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11
Q

What demographic change happens to the non-oil exporting countries?

A

A combination of declining infant mortality and rise of life expectancy cause a surge in the population (demographic bulge),
Higher youth unemployment

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12
Q

what policies took the non-oil exporting countries?

A

Import Substitution policies with regulation, high tariffs and low levels of foreign investment

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13
Q

why the non-oil exporting countries had finance problems?

A

The oil rich states : finance to non- oil exporters and import labour
all base on the oil world prices

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14
Q

why the non-oil exporting countries were unstable?

A

-the prevalence of authoritarian regimes and popular resistance increases the possibility of an abrupt political transition.

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15
Q

what indicators of economic and social problem showed the non-oil exporting countries?

A
  1. Total factor productivity
  2. Income Inequality
  3. Education
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16
Q

what happens with the total factor productivity in the Middle East?(after WW2 to 2000)

A

The TFP performed well average as other developing countries in other regions (after WW2)

  • in the 80’s , it slow down but no more so than other regions
  • in the 90’s , it rebound in most regions in the world but not in the Middle East.
17
Q

What is TFP?

A

-Total factor of productivity refers to growth in output due to improvements in technology and organization

18
Q

How unequal is the Middle East?

A
  • According to Gina Coefficient, is very high in oil exporting countries, for non-exporting countries is lower
  • Gini is actually higher in Latin America and sub-sharan Africa than the non-oil countries in the Middle East
19
Q

What is Gini?

A

Is a commonly used statistical measure of inequality in the distribution income. it range from 0 (total equality) to 1 (total inequality).

20
Q

how is the education and employment the Middle East?

A
  • Education improved substantially in the non oil producing countries.
  • the rate of unemployment are higher than other regions
21
Q

what economic and social problems of the Middle East are attributed to institutional structures?

A
  1. Demographic transition
  2. Religious rules on economic activities
  3. Legal systems
22
Q

what demographic transitions happen in the Middle East?

A

labor force in the non-oil countries is growing at 3% per year (too rapidly for all new entrants to be employed)
- the oil producer countries alleviate this by importing labour , however, the demand is base in oil prices, causing economic and political instability.

23
Q

How religion contributed to the economic malaise in the Middle East?

A
  • Koranic induction agains Riba ( usury -charge of interest as unethical)
  • other religious teachings restricted the use of some financial instruments (options, futures insurance)
  • Concern about this led to the creation of islamic banking (finance + Sharia -religious law of islam)
24
Q

what characteristics have the legal system in the Middle East?

A
  • Mostly based on either British common law or French civil code
  • some countries commercials law take into account Sharia law
  • in term of law enforcement there is corruption but is no worse than other developing countries in the world.
25
Q

What is the Arab Spring ?

A

Refers to a wave of protest, riots, and civil wars which swept throughout the Arab countries

26
Q

why did the unrest break out at that time and spread so quickly ? (Middle East and north Africa)

A
  • presence of authoritarian governments
  • they were able to maintain power through a combination of economic redistribution and political repression
  • oil sales financed economics redistribution to oil exporting countries and subsidies to the non- exporting countries allowed them redistribution policies
  • if it wasn’t enough the gov used policies state policies
  • 21 st century had been less effective the redistribution’s and repression
27
Q

what allow the Arab spring ?

A
  1. information technology
  2. increase unemployment
  3. improvement in education
28
Q

how the information technology allow the Arab spring ?

A

-Information technology makes it easier to suppress news and make it easier for rebels to coordinate

29
Q

what is the connection between education and Arab spring ?

A

as many countries improved their educated population , political instability increase , duo the gap between young people and jobs

Economic History (8 decks)

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