Oxford Energy Forum – Economic Diversification in the MENA – Issue 118
This issue of the Oxford Energy Forum focuses on Economic Diversification in the Middle East and North Africa (MENA). Diversification efforts in MENA (particularly GCC) countries obviously correlate with international oil prices. Economic logic favours specialization over diversification—individuals and enterprises should concentrate on what they can do best and where they have a comparative advantage. The increasing importance of global value chains for development emphasizes this economic logic, by moving competition from entire sectors to single stages of production and even individual jobs. GCC states hold a comparative advantage in oil and gas production, so why should they not tailor their economies to this sector and approach their own diversification in the context of the value chain of petroleum products? One might argue that countries with large resource reserves and small populations could then simply accept, for the time being, that price shocks will happen periodically. Of course, GCC countries are heterogeneous, with several states now having declining reserves and sizeable populations. In this context, with additional drivers of technological advancement and environmental unsustainability, diversification is more urgent. The fourteen articles in this issue engage comprehensively with the key debates on economic diversification in the MENA countries.