The Richest and Poorest Countries of North Africa/Southwest Asia
The four poorest countries of North Africa/Southwest Asia are spread throughout the Arab world; none
is found in the relatively developed Non-Arab North. Read through the excerpts from the CIA Factbook.
Write an essay that outlines why the poorest countries of the Former Soviet Union are so poor. Be sure
to include any physical factors that may apply.
Libya (pc GDP = $1440): “The Italians supplanted the Ottoman Turks in the area around Tripoli in 1911
and did not relinquish their hold until 1943 when defeated in World War II. Libya then passed to UN
administration and achieved independence in 1951. Following a 1969 military coup, Col. Muammar Abu
Minyar al-QADHAFI began to espouse his own political system, the Third Universal Theory. The system is
a combination of socialism and Islam derived in part from tribal practices and is supposed to be
implemented by the Libyan people themselves in a unique form of "direct democracy." QADHAFI has
always seen himself as a revolutionary and visionary leader. He used oil funds during the 1970s and
1980s to promote his ideology outside Libya, supporting subversives and terrorists abroad to hasten the
end of Marxism and capitalism. In addition, beginning in 1973, he engaged in military operations in
northern Chad's Aozou Strip - to gain access to minerals and to use as a base of influence in Chadian
politics - but was forced to retreat in 1987. UN sanctions in 1992 isolated QADHAFI politically following
the downing of Pan AM Flight 103 over Lockerbie, Scotland. During the 1990s, QADHAFI began to
rebuild his relationships with Europe. UN sanctions were suspended in April 1999 and finally lifted in
September 2003 after Libya accepted responsibility for the Lockerbie bombing. In December 2003, Libya
announced that it had agreed to reveal and end its programs to develop weapons of mass destruction
and to renounce terrorism. QADHAFI has made significant strides in normalizing relations with Western
nations since then. He has received various Western European leaders as well as many working-level
and commercial delegations, and made his first trip to Western Europe in 15 years when he traveled to
Brussels in April 2004. The US rescinded Libya's designation as a state sponsor of terrorism in June 2006.
In January 2008, Libya assumed a nonpermanent seat on the UN Security Council for the 2008-09 term.
In August 2008, the US and Libya signed a bilateral comprehensive claims settlement agreement to
compensate claimants in both countries who allege injury or death at the hands of the other country,
including the Lockerbie bombing, the LaBelle disco bombing, and the UTA 772 bombing. In October
2008, the US Government received $1.5 billion pursuant to the agreement to distribute to US national
claimants, and as a result effectively normalized its bilateral relationship with Libya. The two countries
then exchanged ambassadors for the first time since 1973 in January 2009.”
“The Libyan economy depends primarily upon revenues from the oil sector, which contribute
about 95% of export earnings, about one-quarter of GDP, and 60% of public sector wages. The expected
weakness in world hydrocarbon prices throughout 2009 will reduce Libyan government tax income and
constrain Libyan economic growth in 2009. Substantial revenues from the energy sector coupled with a
small population give Libya one of the highest per capita GDPs in Africa, but little of this income flows
down to the lower orders of society. Libyan officials in the past five years have made progress on
economic reforms as part of a broader campaign to reintegrate the country into the international fold.
This effort picked up steam after UN sanctions were lifted in September 2003 and as Libya announced in
December 2003 that it would abandon programs to build weapons of mass destruction. UN Sanctions
against Libya were lifted in September 2003. The process of lifting US unilateral sanctions began in the
spring of 2004; all sanctions were removed by June 2006, helping Libya attract greater foreign direct
investment, especially in the energy sector. Libyan oil and gas licensing rounds continue to draw high
international interest; the National Oil Company set a goal of nearly doubling oil production to 3 million
bbl/day by 2012. Libya faces a long road ahead in liberalizing the socialist-oriented economy, but initial
steps - including applying for WTO membership, reducing some subsidies, and announcing plans for
privatization - are laying the groundwork for a transition to a more market-based economy. The non-oil
manufacturing and construction sectors, which account for more than 20% of GDP, have expanded from
processing mostly agricultural products to include the production of petrochemicals, iron, steel, and
aluminum. Climatic conditions and poor soils severely limit agricultural output, and Libya imports about
75% of its food. Libya's primary agricultural water source remains the Great Manmade River Project, but
significant resources are being invested in desalinization research to meet growing water demands.”
Palestinian Territories (pc GDP = $2056): “The Palestinian territories are composed of two
discontiguous regions, the West Bank and the Gaza Strip, whose final status has yet to be determined.
[Note: The West Bank has a population of 2.4 million, 17% of whom are Jewish. Gaza has a population
of 1.5 million, almost all of whom are Palestinian Arabs.] The territories, which were originally
contained within the British Mandate of Palestine, were captured and occupied by Jordan and by Egypt
in the late 1940s, and captured and occupied by Israel in the 1967 Six-Day War. "Palestinian territories"
is one of a number of designations for these areas. In 1980 Israel claimed to annex East Jerusalem from
the West Bank, but United Nations Security Council Resolution 478 declared this null and void and
required that it be rescinded forthwith, while affirming that it was a violation of international law.
“Following the signing of the Oslo Accords in 1993, portions of the territories have been
governed in varying degrees by the Palestinian Authority. Israel does not consider East Jerusalem nor
the former Israeli - Jordanian no man's land (the former annexed in 1980 and the latter in 1967) to be
parts of the West Bank. Israel claims that both fall under full Israeli law and jurisdiction as opposed to
the 58% of the Israeli-defined West Bank which is ruled by the Israeli 'Judea and Samaria Civil
Administration'. This has not been recognized by any other country, since unilateral annexations of
territory are prohibited by customary and conventional international law” (Wikipedia).
“The September 1993 Israel-PLO Declaration of Principles on Interim Self-Government
Arrangements provided for a transitional period of Palestinian self-rule in the West Bank and Gaza Strip.
Under a series of agreements signed between May 1994 and September 1999, Israel transferred to the
Palestinian Authority (PA) security and civilian responsibility for Palestinian-populated areas of the West
Bank and Gaza. Negotiations to determine the permanent status of the West Bank and Gaza stalled
following the outbreak of an intifada in September 2000, as Israeli forces reoccupied most Palestiniancontrolled areas. In April 2003, the Quartet (US, EU, UN, and Russia) presented a roadmap to a final
settlement of the conflict by 2005 based on reciprocal steps by the two parties leading to two states,
Israel and a democratic Palestine. The proposed date for a permanent status agreement was postponed
indefinitely due to violence and accusations that both sides had not followed through on their
commitments. Following Palestinian leader Yasir ARAFAT's death in late 2004, Mahmud ABBAS was
elected PA president in January 2005. A month later, Israel and the PA agreed to the Sharm el-Sheikh
Commitments in an effort to move the peace process forward. In September 2005, Israel unilaterally
withdrew all its settlers and soldiers and dismantled its military facilities in the Gaza Strip and withdrew
settlers and redeployed soldiers from four small northern West Bank settlements. Nonetheless, Israel
controls maritime, airspace, and most access to the Gaza Strip. A November 2005 PA-Israeli agreement
authorized the reopening of the Rafah border crossing between the Gaza Strip and Egypt under joint PA
and Egyptian control. In January 2006, the Islamic Resistance Movement, HAMAS, won control of the
Palestinian Legislative Council (PLC). The international community refused to accept the HAMAS-led
government because it did not recognize Israel, would not renounce violence, and refused to honor
previous peace agreements between Israel and the PA. HAMAS took control of the PA government in
March 2006, but President ABBAS had little success negotiating with HAMAS to present a political
platform acceptable to the international community so as to lift economic sanctions on Palestinians. The
PLC was unable to convene throughout most of 2006 as a result of Israel's detention of many HAMAS
PLC members and Israeli-imposed travel restrictions on other PLC members. Violent clashes took place
between Fatah and HAMAS supporters in the Gaza Strip in 2006 and early 2007, resulting in numerous
Palestinian deaths and injuries. ABBAS and HAMAS Political Bureau Chief MISHAL in February 2007
signed the Mecca Agreement in Saudi Arabia that resulted in the formation of a Palestinian National
Unity Government (NUG) headed by HAMAS member Ismail HANIYA. However, fighting continued in the
Gaza Strip, and in June, HAMAS militants succeeded in a violent takeover of all military and
governmental institutions in the Gaza Strip. ABBAS dismissed the NUG and through a series of
Presidential decrees formed a PA government in the West Bank led by independent Salam FAYYAD.
HAMAS rejected the NUG's dismissal and has called for resuming talks with Fatah, but ABBAS has ruled
out negotiations until HAMAS agrees to a return of PA control over the Gaza Strip and recognizes the
FAYYAD-led government. FAYYAD and his PA government initiated a series of security and economic
reforms to improve conditions in the West Bank. ABBAS participated in talks with Israel's Prime Minister
OLMERT and secured the release of some Palestinian prisoners and previously withheld customs
revenue. During a November 2007 international meeting in Annapolis Maryland, ABBAS and OLMERT
agreed to resume peace negotiations with the goal of reaching a final peace settlement. Late November
2007 through June 2008 witnessed a substantial increase in Israeli-Palestinian violence. An Egyptianbrokered truce in June 2008 between Israel and HAMAS brought about a five-month pause in hostilities,
but spiraling end-of-year violence culminated with massive Israeli air assaults on HAMAS installations in
late December followed by Israeli ground attacks in early January 2009. Israel in mid January unilaterally
stopped the attacks and HAMAS responded by suspending rocket and mortar fire. The fighting resulted
in the deaths of an estimated 1,100 to 1,400 Palestinians and left tens of thousands of people homeless.
International donors pledged $4.5 billion in aid to rebuild the Gaza Strip, but by mid-May 2009 only a
small fraction of the aid had been delivered.”
“High population density, limited land access, and strict internal and external security controls
have kept economic conditions in the Gaza Strip - the smaller of the two areas under the Palestinian
Authority (PA) - even more degraded than in the West Bank. The beginning of the second intifada in
September 2000 sparked an economic downturn, largely the result of Israeli closure policies; these
policies, which were imposed to address security concerns in Israel, disrupted labor and trade access to
and from the Gaza Strip. In 2001, and even more severely in 2003, Israeli military measures in PA areas
resulted in the destruction of capital, the disruption of administrative structures, and widespread
business closures. The Israeli withdrawal from the Gaza Strip in September 2005 offered some mediumterm opportunities for economic growth, but Israeli-imposed crossings closures, which became more
restrictive after HAMAS violently took over the territory in June 2007, have resulted in widespread
private sector layoffs and shortages of most goods. The status of the crossings, which are closed to all
but the most basic goods, has not changed following Israel's military offensive into the Gaza Strip in
early 2009.”
“The September 1993 Israel-PLO Declaration of Principles on Interim Self-Government
Arrangements provided for a transitional period of Palestinian self-rule in the West Bank and Gaza Strip.
Under a series of agreements signed between May 1994 and September 1999, Israel transferred to the
Palestinian Authority (PA) security and civilian responsibility for Palestinian-populated areas of the West
Bank and Gaza. Negotiations to determine the permanent status of the West Bank and Gaza stalled
following the outbreak of an intifada in September 2000, as Israeli forces reoccupied most Palestiniancontrolled areas. In April 2003, the Quartet (US, EU, UN, and Russia) presented a roadmap to a final
settlement of the conflict by 2005 based on reciprocal steps by the two parties leading to two states,
Israel and a democratic Palestine. The proposed date for a permanent status agreement was postponed
indefinitely due to violence and accusations that both sides had not followed through on their
commitments. Following Palestinian leader Yasir ARAFAT's death in late 2004, Mahmud ABBAS was
elected PA president in January 2005. A month later, Israel and the PA agreed to the Sharm el-Sheikh
Commitments in an effort to move the peace process forward. In September 2005, Israel unilaterally
withdrew all its settlers and soldiers and dismantled its military facilities in the Gaza Strip and withdrew
settlers and redeployed soldiers from four small northern West Bank settlements. Nonetheless, Israel
controls maritime, airspace, and most access to the Gaza Strip. A November 2005 PA-Israeli agreement
authorized the reopening of the Rafah border crossing between the Gaza Strip and Egypt under joint PA
and Egyptian control. In January 2006, the Islamic Resistance Movement, HAMAS, won control of the
Palestinian Legislative Council (PLC). The international community refused to accept the HAMAS-led
government because it did not recognize Israel, would not renounce violence, and refused to honor
previous peace agreements between Israel and the PA. HAMAS took control of the PA government in
March 2006, but President ABBAS had little success negotiating with HAMAS to present a political
platform acceptable to the international community so as to lift economic sanctions on Palestinians. The
PLC was unable to convene throughout most of 2006 as a result of Israel's detention of many HAMAS
PLC members and Israeli-imposed travel restrictions on other PLC members. Violent clashes took place
between Fatah and HAMAS supporters in the Gaza Strip in 2006 and early 2007, resulting in numerous
Palestinian deaths and injuries. ABBAS and HAMAS Political Bureau Chief MISHAL in February 2007
signed the Mecca Agreement in Saudi Arabia that resulted in the formation of a Palestinian National
Unity Government (NUG) headed by HAMAS member Ismail HANIYA. However, fighting continued in the
Gaza Strip, and in June 2007, HAMAS militants succeeded in a violent takeover of all military and
governmental institutions in the Gaza Strip. ABBAS dismissed the NUG and through a series of
presidential decrees formed a PA government in the West Bank led by independent Salam FAYYAD.
HAMAS rejected the NUG's dismissal and has called for resuming talks with Fatah, but ABBAS has ruled
out negotiations until HAMAS agrees to a return of PA control over the Gaza Strip and recognizes the
FAYYAD-led government. FAYYAD and his PA government initiated a series of security and economic
reforms to improve conditions in the West Bank. ABBAS participated in talks with Israel's Prime Minister
OLMERT and secured the release of some Palestinian prisoners and previously withheld customs
revenue. During a November 2007 international meeting in Annapolis Maryland, ABBAS and OLMERT
agreed to resume peace negotiations with the goal of reaching a final peace settlement.”
“The West Bank - the larger of the two areas comprising the Palestinian Authority (PA) - has
experienced a general decline in economic conditions since the second intifada began in September
2000. The downturn has been largely a result of Israeli closure policies - the imposition of closures and
access restrictions in response to security concerns in Israel - which disrupted labor and trading
relationships. In 2001, and even more severely in 2002, Israeli military measures in PA areas resulted in
the destruction of capital, the disruption of administrative structures, and widespread business closures.
International aid of at least $1.14 billion to the West Bank and Gaza Strip in 2004 prevented the
complete collapse of the economy and allowed some reforms in the government's financial operations.
In 2005, high unemployment and limited trade opportunities - due to continued closures both within the
West Bank and externally - stymied growth. Israel's and the international community's financial
embargo of the PA when HAMAS ran the PA during March 2006 - June 2007 interrupted the provision of
PA social services and the payment of PA salaries. Since then the FAYYAD government in the West Bank
has restarted salary payments and the provision of services but would be unable to operate absent high
levels of international assistance” (CIA Factbook).
Yemen (pc GDP = $2200): “North Yemen became independent of the Ottoman Empire in 1918. The
British, who had set up a protectorate area around the southern port of Aden in the 19th century,
withdrew in 1967 from what became South Yemen. Three years later, the southern government
adopted a Marxist orientation. The massive exodus of hundreds of thousands of Yemenis from the south
to the north contributed to two decades of hostility between the states. The two countries were
formally unified as the Republic of Yemen in 1990. A southern secessionist movement in 1994 was
quickly subdued. In 2000, Saudi Arabia and Yemen agreed to a delimitation of their border.” [Note:
Oddly enough, before 2000, maps of the border showed a dotted line, indicating that no formal border
had been established.]
“Yemen, one of the poorest countries in the Arab world, reported average annual growth in the
range of 3-4% from 2000 through 2007. In 2008, growth declined slightly as the price of oil dropped and
the slowing global economy reduced demand for oil. Yemen's economic fortunes depend mostly on
declining oil resources, but the country is trying to diversify its earnings. In 2006 Yemen began an
economic reform program designed to bolster non-oil sectors of the economy and foreign investment.
As a result of the program, international donors pledged about $5 billion for development projects. A
liquefied natural gas facility is scheduled to open in 2009. Yemen has limited exposure to the
international financial system and no capital markets, however, the global financial crisis probably will
reduce international aid in 2009” (CIA Factbook).
Western Sahara (pc GDP = $2500): “Morocco virtually annexed the northern two-thirds of Western
Sahara (formerly Spanish Sahara) in 1976, and claimed the rest of the territory in 1979, following
Mauritania's withdrawal. A guerrilla war with the Polisario Front contesting Rabat's sovereignty ended in
a 1991 UN-brokered cease-fire; a UN-organized referendum on the territory's final status has been
repeatedly postponed. In April 2007, Morocco presented an autonomy plan for the territory to the UN,
which the U.S. considers serious and credible. The Polisario also presented a plan to the UN in 2007 that
called for independence. Representatives from the Government of Morocco and the Polisario Front
have met four times since June 2007 to negotiate the status of Western Sahara, but talks have stalled
since the UN envoy to the territory stated in April 2008 that independence is unrealistic.”
“Western Sahara depends on pastoral nomadism, fishing, and phosphate mining as the principal
sources of income for the population. The territory lacks sufficient rainfall for sustainable agricultural
production, and most of the food for the urban population must be imported. Incomes in Western
Sahara are substantially below the Moroccan level. The Moroccan Government controls all trade and
other economic activities in Western Sahara. Morocco and the EU signed a four-year agreement in July
2006 allowing European vessels to fish off the coast of Morocco, including the disputed waters off the
coast of Western Sahara. Moroccan energy interests in 2001 signed contracts to explore for oil off the
coast of Western Sahara, which has angered the Polisario. However, in 2006 the Polisario awarded
similar exploration licenses in the disputed territory, which would come into force if Morocco and the
Polisario resolve their dispute over Western Sahara.” (CIA Factbook).
The three richest countries of North Africa/Southwest Asia are among the richest in the world. All are
located on the Persian Gulf. Read through the excerpts from the CIA Factbook and then write a short
essay summarizing why these countries are relatively rich. Be sure to include any physical factors that
may apply.
Qatar (pc GDP = $103,500): “Ruled by the al-Thani family since the mid-1800s, Qatar transformed itself
from a poor British protectorate noted mainly for pearling into an independent state with significant oil
and natural gas revenues. During the late 1980s and early 1990s, the Qatari economy was crippled by a
continuous siphoning off of petroleum revenues by the Amir, who had ruled the country since 1972. His
son, the current Amir HAMAD bin Khalifa al-Thani, overthrew him in a bloodless coup in 1995. In 2001,
Qatar resolved its longstanding border disputes with both Bahrain and Saudi Arabia. As of 2007, oil and
natural gas revenues had enabled Qatar to attain the second-highest per capita income in the world.”
“Qatar has experienced rapid economic growth over the last several years on the back of high oil
prices, and in 2008 posted its eighth consecutive budget surplus. Economic policy is focused on
developing Qatar's nonassociated natural gas reserves and increasing private and foreign investment in
non-energy sectors, but oil and gas still account for more than 50% of GDP, roughly 85% of export
earnings, and 70% of government revenues. Oil and gas have made Qatar the second highest per-capita
income country - following Liechtenstein - and one of the world's fastest growing. Proved oil reserves of
15 billion barrels should enable continued output at current levels for 37 years. Qatar's proved reserves
of natural gas are nearly 26 trillion cubic meters, about 14% of the world total and third largest in the
world. The drop in oil prices in late 2008 and the global financial crisis will reduce Qatar's budget surplus
and may slow the pace of investment and development projects in 2009” CIA Factbook).
Kuwait (pc GDP = $49,970): “Britain oversaw foreign relations and defense for the ruling Kuwaiti ALSABAH dynasty from 1899 until independence in 1961. Kuwait was attacked and overrun by Iraq on 2
August 1990. Following several weeks of aerial bombardment, a US-led, UN coalition began a ground
assault on 23 February 1991 that liberated Kuwait in four days. Kuwait spent more than $5 billion to
repair oil infrastructure damaged during 1990-91. The AL-SABAH family has ruled since returning to
power in 1991 and reestablished an elected legislature that in recent years has become increasingly
assertive. The country witnessed the historic election in May 2009 of four women to its National
Assembly.”
“Kuwait is a small, rich, relatively open economy with self-reported crude oil reserves of about
104 billion barrels - 8% of world reserves. Petroleum accounts for nearly half of GDP, 95% of export
revenues, and 80% of government income. Kuwait experienced rapid economic growth over the last
several years on the back of high oil prices and in 2008 posted its tenth consecutive budget surplus. As a
result of this positive fiscal situation, the need for economic reforms was less urgent and the
government did not push through new initiatives. The drop in oil prices in late 2008 will reduce Kuwait's
fiscal surplus in 2009. The global financial crisis may slow the pace of investment and development
projects, but Kuwait has vowed to use its considerable financial resources to stabilize the economy if
necessary.” (CIA Factbook).
United Arab Emirates (pc GDP = $40,000): “The Trucial States of the Persian Gulf coast granted the UK
control of their defense and foreign affairs in 19th century treaties.[Note: “Trucial” refers to the truce
that granted UK control.] In 1971, six of these states - Abu Zaby, 'Ajman, Al Fujayrah, Ash Shariqah,
Dubayy, and Umm al Qaywayn - merged to form the United Arab Emirates (UAE). They were joined in
1972 by Ra's al Khaymah. The UAE's per capita GDP is on par with those of leading West European
nations. Its generosity with oil revenues and its moderate foreign policy stance have allowed the UAE to
play a vital role in the affairs of the region.”
“The UAE has an open economy with a high per capita income and a sizable annual trade
surplus. Successful efforts at economic diversification have reduced the portion of GDP based on oil and
gas output to 25%. Since the discovery of oil in the UAE more than 30 years ago, the UAE has undergone
a profound transformation from an impoverished region of small desert principalities to a modern state
with a high standard of living. The government has increased spending on job creation and
infrastructure expansion and is opening up utilities to greater private sector involvement. In April 2004,
the UAE signed a Trade and Investment Framework Agreement with Washington and in November 2004
agreed to undertake negotiations toward a Free Trade Agreement with the US. The country's Free Trade
Zones - offering 100% foreign ownership and zero taxes - are helping to attract foreign investors. Higher
oil revenue, strong liquidity, housing shortages, and cheap credit in 2005-07 led to a surge in asset prices
(shares and real estate) and consumer inflation. The global financial crisis and the resulting tight
international credit market and falling oil prices have already begun to deflate asset prices and will
result in slower economic growth for 2009. Dependence on oil and a large expatriate workforce are
significant long-term challenges. The UAE's strategic plan for the next few years focuses on
diversification and creating more opportunities for nationals through improved education and increased
private sector employment.” (CIA Factbook).