Apparently, it’s time for the tiger to step down from its time-honored perch. At least that is what the Economist Intelligence Unit predicts. In their report titled, “Globalization Stalled”, the Middle East will be the fastest growing region in 2009, taking the title away from Asia, whose heavy dependency on trade has left it cold and exposed to the chill of the economic crisis.
Israel and Egypt were two of the Middle Eastern countries that had an extra sparkle, grabbing some of the best rankings overall. In particular, Egypt significantly improved, moving up from a rank of 60 in the period between 2004 and 2008, to 49 out of a total of 82 countries.
Israel is currently going through a bit of a slump, facing its first recession in eight years, but that has not stopped the country from being promoted to the status of a developed market by the MSCI. Israel has a stock market valued at more than $131 billion. Its TA-25 Index of Tel Aviv shares soared by 31% this year even as markets elsewhere were barely trudging along, making it the best performing developed market next to Norway.
Unlike other global economies, Israel fared better during the economic crisis largely due to export muscle. While global trade lost its footing, falling 40% between August 2008 and February 2009, Israeli exports slid by 30%. Israel’s buoy was the country’s emphasis on high-tech exports, according to a study by the Bank of Israel.
Egypt has pulled itself through these challenging times with more aplomb, recording a 4.3% growth in the first quarter of 2009. Its upswing is mainly due to a boom in construction and telecom, which expanded 16% and 14% respectively in the first quarter.
Countries like Egypt and Israel are proving to be invaluable to the overall growth of the Middle East and North Africa (MENA) region. Globally, the Middle East now has some of the fastest growing sectors, such as healthcare, and Africa boasts the fastest growing telecom industry. While economies worldwide have been struggling with sluggish consumer spending and drooping retail sectors, the Middle East is witnessing an unprecedented 13% growth in retail, one of the speedier markets. Morocco saw its exports of consumer goods, especially clothes, increase by 8.6% in the first quarter of 2009. Despite the global economic downturn the Middle East African nation is expecting a growth rate of 5.4% this year. Jordan is not too far behind, as it looks forward to a growth rate of 3.5% in 2009.
Did the Middle East/African region dodge the bullet of the economic crisis? Not entirely. Growth in the area is forecasted to slow down to 2.6% in 2009 from 5.7% in 2008. Good economic fundamentals and high currency reserves have helped the region surf along the choppy waves of the crisis. And there is fierce competition rising in the ranks from emerging Asia, who is challenging the MENA for the title of fastest growing region in 2009-10. To be sure, the tiger is not going to let go easily, but it will be a tough ride for both the competitors, nevertheless.
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