By all accounts, 2009 is shaping up to be an annus horribilis for the global economy. For the first time in decades, the world is in a synchronised recession of unknown severity.
What about the Middle East and North Africa (MENA) region? Is it being swept away with the ebbing tide of global activity, as one observes in the property, tourism and trade sectors in the more exposed parts of the region? Or will it be spared the downturn’s traumas?
To assess the impact of the turmoil, one needs to be reminded of some of the more salient characteristics of the regional economies. First, abstracting from the special case of the energy sector, countries in the region are less fully integrated into the global production and trade cycles or the dynamics of financial markets. Dubai, a city state of fewer than 2m people, is not typical of the 300m-strong region. Contagion, therefore, is less of a risk than in other emerging markets.
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