As the global economy lurches from one crisis to the next, we look at the prospects for the regional economies in troubling global conditions which could slash domestic growth.

Another quarter, another headache. Gulf governments have suffered a tumultuous first two quarters of the year and were hoping for some semblance of sanity in the third quarter. At the very least, regional governments were hoping that tragic developments within the Middle East had remained isolated - Syria, Yemen and Libya - leaving other countries in relative safety and peace.
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The Standard & Poor’s downgrade of the U.S. economy was the great unthinkable just a few months ago. They are now a stark reality. While the short-term impact may not be immediate - save for market gyrations, it is long-term implications are clear: the U.S. economy is no longer the safest, the most dynamic and the most enduring in the world, and U.S. Treasuries - may be not tomorrow but certainly over time - will no longer the safe havens everybody counted on.

The Gulf states which have aligned itself to the U.S. Dollar in more ways than one, also need to think radically outside their dollar-filled box. While, don’t expect Gulf states to publicly speak negatively about the U.S. economy or the dollar, one certainly hopes that behind closed doors, there is a concerted hope to realign the regional economies to the new realities. READ MORE HERE
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Gulf markets have lagged other global emerging and developed markets for years. Even as the S&P 500 and other emerging market indices rescaled their pre-Lehman levels, Gulf markets have stayed listless, drifting lower and lower until they have plumbed new depths. But have the markets finally bottomed out? With the Gulf economies seeing major improvement in their fortunes, thanks to government stimulus, will it rub off on the markets as well in the second half of the year? Gulf markets lost USD33.4-billion in market capitalization in the first half of the year due to a number of factors that conspired to negatively impact investor sentiment.

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The Arab World’s tryst with democracy and freedom is unlikely to bear economic fruits, according to a study. Instead, we could well see a gridlock political environment and economic growth that continues to lag global averages.

The Economist Intelligence Unit (EIU) insightful study on how the Arab Spring initiative is likely to play out, suggests a 60% probability of a gridlocked political environment that is unlikely to result in realizing the aspirations of the region’s citizens. READ MORE HERE

Spring is nearly six months old. It is time to take stock, remember those who lost their lives and continue to fight, and hand out some well-deserved awards to the key players.

The New York Times columnist Nicholas Kristof, asked the rhetorical question ‘What Country Handled Arab Spring The Best? His own answer: Morocco.

But he left the discussion at that. Given that the Arab Spring is just about six months old, alifarabia.com was inspired to take stock of how the various countries have handled a revolution that has smashed Middle East dogmas, broken the will of Arab strongmen and given hopes to millions not just in the Arab World but also around the world.

The Middle East has seen more public participation in politics in the past six months than it has done over the past 50 years. Much to the shock of Zine El Abidine Ben Ali, Hosni Mubarak and Moamer Qaddhafi, the people of the Arab World launched a unique coup that they could not have fathom and never saw coming. These strongmen were looking to suppress indigenous Islamic movements, the radicals, Al-Qaeda sympathisers, the socialists, the Shiaas and the sufis. They were looking for tangible forces they could fight, and suppress and imprison and maim - as they had done in the past.

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With Opec seemingly irrelevant, the GCC is trying to find a balance between responsible crude suppliers and their own domestic needs. But, as Deutsche Bank warns, their own high breakeven prices are making them even more vulnerable to oil price shocks than before. READ MORE HERE

Qatar, which has been beating its regional rival on economic performance, has also won the title of the most peaceful country in the Middle East North Africa region.

The Institute of Economics & Peace, bestowed the number one regional ranking to Qatar in its annual Global Peace Index (GPI) 2011. READ MORE HERE
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Close to $1.6-trillion worth of projects are cancelled or are on hold in the Middle East and East North African market, with $800-billion in the UAE alone, according to Citibank. The statistics are a reflection of the hangover of the leveraged days in the region when billion dollar projects were announced virtually every other day. Read More Here

Jordan and Morocco’s possible inclusion in the Gulf is a political move rather than an economic one, but there might be other - unlikely - candidates in the region far suitable for the purpose.

The potential inclusion of Morocco and Jordan in the GCC fold should be taken for what it is - a political move by the Gulf states to widen their sphere of influence in the region. Read More Here

The Arab World’s foreign assets will rise to a stunning $2.2-trillion this year, says the IIF. But the key to growth in the region will not be financial resources but structural reforms, otherwise tensions will remain. Read More Here