In an opinion piece appearing in the FT, International Monetary Fund (IMF) Middle East Director Masood Ahmed writes, "Oil prices have dropped from $147 a barrel to between $50 and $60 over the past year, leading to a collapse of export revenues for Middle Eastern and North African oil producers.... Yet growth...remains higher than in many regions.... This year, the oil exporters of the [region] will see their non-oil gross domestic product... expand at more than 3.5 percent. Real GDP in the region...should also grow at about the same rate.... What explains this resilience?
Part of the explanation is that banks in the region had little exposure to the toxic assets that have created turmoil elsewhere. Also, countries in the region have not been affected to the same extent by the sharp declines in export volumes...or the withdrawal of capital flows.... Another dimension of the answer lies in decisive policy actions.... But the most important factor behind the resilience of the Middle East and North Africa is that the region's oil exporters have decided to maintain high levels of capital spending by drawing upon reserves accumulated during the boom years....
An important uncertainty is whether this resilience will remain if the recession in Europe is prolonged, which will be particularly important for North Africa.... Fortunately, most of the region's governments are adapting their fiscal and monetary stance and a few have also been able to draw upon the IMF and donors to supplement their limited financing capacity. But the best outcome for all countries in the region would be a speedy return to positive growth and well-functioning financial markets in the world as a whole...." [Financial Times/Factiva]
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