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81. The Currency-Plus-Commodity Basket: A Proposal for Exchange Rates in Oil-Exporting Countries to Accommodate Trade Shocks Automatically

Author:
Jeffrey Frankel
Publication Date:
03-2017
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
The paper proposes an exchange rate regime for oil-exporting countries. The goal is to achieve the best of both flexible and fixed exchange rates. The arrangement is designed to deliver monetary policy that counteracts rather than exacerbates the effects of swings in the oil market, while yet offering the day-to-day transparency and predictability of a currency peg. The proposal is to peg the national currency to a basket, but a basket that includes not only the currencies of major trading partners (in particular, the dollar and the euro), but also the export commodity (oil). The plan is called Currency-plus-Commodity Basket (CCB). The paper begins by fleshing out the need for an innovative arrangement that allows accommodation to trade shocks. The analysis provides evidence from six Gulf countries that periods when their currencies were “undervalued”, in the sense that the actual foreign exchange value lay below what it would have been under the CCB proposal, were periods of overheating as reflected in high inflation and of external imbalance as reflected in high balance of payments surpluses. Conversely, periods when the currencies were “overvalued,” in the sense that their foreign exchange value lay above what it would have been under CCB, featured unusually low inflation and low balance of payments. These results are suggestive of the implication that the economy would have been more stable under CCB. The last section of the paper offers a practical blueprint for detailed implementation of the proposal.
Topic:
Economics, Oil, Exchange Rate Policy, Commodities, and Currency Basket
Political Geography:
Middle East, Saudi Arabia, and Gulf Nations

82. The US-Saudi coalition’s impact on Yemen’s health – a series on Yemen, part 2

Author:
Shireen Al-Adeim
Publication Date:
01-2017
Content Type:
Journal Article
Journal:
Harvard Journal of Middle Eastern Politics and Policy
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This is the second of a three-part series of essays on Yemen highlighting the magnitude and impact of the civil war on Yemenis. Starting in March 2015, Saudi Arabia led a coalition of several Arab countries in bombing Yemen, its neighbor to the south. The coalition’s indiscriminate bombing has targeted countless homes, schools, markets, and even hospitals. Yemenis have become accustomed to double-tap and triple-tap strikes that target rescuers after an attack. One notable case was a double-tap strike that killed at least 140 mourners at a large funeral home in Sana’a, Yemen’s capital. The number of deaths resulting from US/Saudi airstrikes and fighting between Saudi-allied and Saleh/Houthi-allied forces has been conservatively estimated at 10,000 deaths and 40,000 injuries. The hidden costs of war, however, are much greater.
Topic:
Health, Poverty, War, and International Affairs
Political Geography:
Middle East, Yemen, Saudi Arabia, North America, United States of America, and Gulf Nations

83. Yemen: drained, uncertain, and ignored – a series on Yemen, part 3

Author:
Mohamed Saleh
Publication Date:
01-2017
Content Type:
Journal Article
Journal:
Harvard Journal of Middle Eastern Politics and Policy
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This is the third of a three-part series of essays on Yemen highlighting the magnitude and impact of the civil war on Yemenis. Yemen is located on the southern edge of the Arabian peninsula, with the Red Sea and Egypt to its west, the Gulf of Aden and the Horn of Africa to its south, Oman on its northeastern border, and Saudi Arabia along its northern border. Once benign representations of Yemen’s geography and sovereignty, those borders now symbolize nothing but profound anguish. The edges outlining a nation whose people remain imprisoned while waiting for life-saving aid which may not come. What at one point was a country grappling with the contradictions of 21st century development and economic growth has been bombed so viciously and blockaded so resolutely that close to a million of its inhabitants may die from a disease easily cured by oral rehydration therapy – a medical expression for treatment by purified water and modest amounts of sugar, salt, and zinc supplements. Condiments and a few bottles from a local pharmacy in any European country, and water. That is all. And yet the international community continues to watch in horror, its reaction anemic, its response stunted.
Topic:
Civil War, War, Arab Spring, Humanitarian Intervention, and International Community
Political Geography:
Iran, Middle East, Yemen, Saudi Arabia, United States of America, and Gulf Nations

84. Making Saudi Arabia Fun Again?

Author:
Salman al-Dosari, Aziza al-Manea, 'Adel Khamis al-Zahrani, Hind al-Mutairi, and Abdulrahman al-Rashed
Publication Date:
01-2017
Content Type:
Journal Article
Journal:
Harvard Journal of Middle Eastern Politics and Policy
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
The General Entertainment Authority was created last year as part of Saudi Arabia’s “Vision 2030” plan. The primary goal of Vision 2030 is to diversify Saudi Arabia’s oil-dependent economy, but it also aims to foster a “vibrant society” with “meaningful entertainment for citizens.” Public cinemas are banned in the kingdom, and some Saudis seek diversion abroad, often in nearby Bahrain and Dubai. So far, the General Entertainment Authority has provoked a mixed reaction: some have lauded its work to bring more cultural events to Saudi Arabia, while others accuse it of moving too quickly, and not offering enough options to less wealthy Saudis. Here are excerpts of what five Saudi pundits had to say about the issue.
Topic:
Culture, Reform, Media, News Analysis, and Leisure
Political Geography:
Middle East, Saudi Arabia, and Gulf Nations

85. The glass half empty: Water in the Middle East

Author:
JMEPP
Publication Date:
01-2017
Content Type:
Journal Article
Journal:
Harvard Journal of Middle Eastern Politics and Policy
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Climate change is affecting us all – but some parts of the world will probably bear a far bigger burden than others. A recent study published in the journal Climate Change shows that rising temperatures in the Middle East and North Africa are likely to exceed 2 degrees Celsius by the end of the century, even if the global mean temperature remains below this threshold.
Topic:
Climate Change, Energy Policy, Environment, Natural Resources, and Water
Political Geography:
Middle East, North Africa, and Gulf Nations

86. Power play: The United Arab Emirates’ new approach to geopolitics

Author:
JMEPP
Publication Date:
01-2017
Content Type:
Journal Article
Journal:
Harvard Journal of Middle Eastern Politics and Policy
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Power – be it tangible, intangible, natural, military, or economic – shapes the capacities of the state and its role within the international system. The Middle East is no exception to this realist reading of international affairs. The Arab Spring, the Syrian conflict, the war in Yemen and the Iranian nuclear deal have all created a battleground, often quite literally, for state power interests to compete with one another. How are these power configurations linked to identity? The United States sees itself as a stronghold of liberal democracy, Japan as the quintessential trading nation, and Switzerland is comfortably ensconced in its 200-year-old neutralism. This “sense of self,” or who states are, shapes and defines what they do. Power and identity routinely mould and inform each other. For a country like the United Arab Emirates, described by many analysts as a middle, regional, or rising power, these questions hold particular relevance as the UAE reshapes its position in the world.
Topic:
Foreign Policy, Power Politics, Soft Power, Identities, and State
Political Geography:
Middle East, United Arab Emirates, and Gulf Nations

87. Solitaire Arabian Style

Author:
A. Frolov
Publication Date:
01-2017
Content Type:
Journal Article
Journal:
International Affairs: A Russian Journal of World Politics, Diplomacy and International Relations
Institution:
East View Information Services
Abstract:
LAST SPRING, an event in the Arab world shocked everyone. The Kingdom of Saudi Arabia (KSA), Bahrain and the United Arab Emirates (UAE) withdrew their ambassadors from Doha, the capital of Qatar, their ally. One of the smallest members of the Cooperation Council for the Arab States of the Gulf (GCC) was accused of supporting “anyone threat- ening the security and stability of the GCC whether as groups or individ- uals – via direct security work or through political influence ... and hos- tile media.” On June 5, 2017, the KSA, UAE, Bahrain, and Egypt officially dis- continued diplomatic relations and all types of communication with Qatar. Later, they were joined by the Maldives, Mauritius and Mauretania. Jordan and Djibouti lowered the level of their diplomatic representations in Doha. Several African countries – Senegal, Niger and Chad – recalled their ambassadors. Kuwait and Oman, both GCC mem- bers, stayed away from the action. Later, the three initiators handed Doha a list of 13 demands to end a major Gulf crisis, insisting that Qatar should shut down the Al Jazeera network, close a Turkish military base and scale down ties with Iran. They gave Qatar 10 days to comply with the demands and agree to annu- al audits in the following 10 years.1 Qatar rejected this ultimatum as inter- ference in its sovereignty. Possible repercussions notwithstanding, what happened to Qatar can be described as a manifestation of the deeply rooted social and political changes in the Arab East caused by the color revolutions unfolding amid globalization, informatization, democratization, gradual destruction of the traditional values of Eastern societies, and the frantic efforts to find adequate answers to these challenges.
Topic:
Security, Foreign Policy, International Cooperation, and Conflict
Political Geography:
Middle East, Saudi Arabia, Bahrain, United Arab Emirates, and Gulf Nations

88. Military Cooperation in MENA: Uncertainty in the Face of Changing Threats

Author:
Anthony H. Cordesman
Publication Date:
08-2016
Content Type:
Special Report
Institution:
Middle East Institute (MEI)
Abstract:
This Policy Paper is part of The Middle East Institute's Regional Cooperation Series. Throughout 2016, MEI will be releasing several policy papers by renowned scholars and experts exploring possibilities to foster regional cooperation across an array of sectors. The purpose is to highlight the myriad benefits and opportunities associated with regional cooperation, and the high costs of the continued business-as-usual model of competition and intense rivalry. It is all too easy to develop ambitious plans for regional security cooperation. In practice, however, almost all real world security cooperation is dependent on the different priorities states give to various threats, the willingness of given regimes to act, the resources they develop and have available, and the level of interoperability between their forces. Actual security cooperation in the MENA region has long been limited, occurred between changing mixes of individual countries rather than on a regional basis, and always lagged behind the rhetoric. Better cooperation on this level could evolve in the face of forces such as Iran’s military efforts, a powerful new Islamist extremist threat, or the outcomes to the fighting in Libya, Iraq, Syria, and Yemen. However, there is little reason to assume, given regional trends, that the prospects for regional cooperation or cooperation between states will improve in the near future, and bilateral relations with external powers, principally the United States, are likely to continue to play a more critical role in the future.
Topic:
Security, Foreign Policy, Regional Cooperation, Terrorism, and Military Affairs
Political Geography:
Iran, Turkey, Middle East, United States of America, and Gulf Nations

89. The Gulf’s Escalating Sectarianism

Author:
Lauren Baker
Publication Date:
01-2016
Content Type:
Commentary and Analysis
Institution:
Project on Middle East Political Science (POMEPS)
Abstract:
On January 2, Saudi Arabia executed 47 men, including prominent cleric and political activist Nimr al-Nimr. This sparked immediate backlash, especially among domestic and global Shiite communities. Unfortunately, such rising sectarian tensions are nothing new in the region. Although the media is quick to highlight the Sunni-Shiite divide, it generally points to this split as the root cause of conflicts. How are we to get beyond this primordialist rhetoric and study the real impacts and causes of sectarianism in the region? POMEPS Briefing 28, “The Gulf’s Escalating Sectarianism,” collects 16 pieces previously published by the Project on Middle East Political Science and the Monkey Cage to provide a more nuanced look of this divisive trend. There is a growing body of scholarship that places sectarianism within the study of comparative politics and international relations, rather than treating sectarian identity as an unchanging, essentialist trait. Authors in this collection demonstrate how political elites use sectarian language to legitimize authoritarian rule, consolidate power, and rally against internal and external foes. What appear on the surface as entrenched confessional divides are often more about political and economic power than religion. Interested readers should also look at the 2013 POMEPS Studies 4 “The Politics of Sectarianism,” much of which remains relevant today. Analysis of individual Gulf states’ domestic and geopolitical maneuvering supports this theoretical framework. In Saudi Arabia, the new leadership is able to refocus attention away from its international and domestic failures by increasing pressure on Shiite dissidents and provoking its main regional rival, Iran. And, in the wake of the nuclear agreement, the increasing Iranian influence gives Saudi Arabia another reason to amp up the sectarian vehemence. Meanwhile in Yemen, the labels of sectarianism fail to tell the whole story, while in Iraq and Syria violence in the name of sectarian identity continues to polarize and entrench both sides. The Arab uprisings challenged the traditional regional powers, and Sunni leaders continue to vie for prominence in this new order. Meanwhile, the increasing use of information technology and social media reinforces existing communities, while further polarizing users and citizens.
Topic:
International Affairs and Sectarianism
Political Geography:
Gulf Nations

90. Divesting From Sectarianism: Reimagining Relations Between Iran And The Arab Gulf States

Author:
Hamada D. Zahawi and Khaled A. Beydoun
Publication Date:
05-2016
Content Type:
Journal Article
Journal:
Journal of International Affairs
Institution:
School of International and Public Affairs, Columbia University
Abstract:
Until recently, Iran has been economically isolated by way of sanctions, preempting investment opportunities with states allied with the United States. However, the Obama administration’s recent effort towards economic normalization with Iran affords it with unprecedented commercial possibilities, and per the focus of this article, legalized commercial enterprising within Saudi Arabia, the United Arab Emirates, and other Gulf Cooperation Council (GCC) States—across sectarian tensions and fault lines. From both a legal and practical prism, this article investigates the recent lifting of sanctions, which opens the door for Iran’s investment within neighboring states including the GCC. Subsequently, it analyzes how commercial investment and the reciprocal advancement of economic interests offers a promising pathway toward eroding political standoffs, economic inequities, and the politicization of sectarianism. In closing, the article addresses salient challenges that may hinder the potential of this economic rapprochement, and ways forward.
Topic:
Diplomacy, Regional Cooperation, Sanctions, and Investment
Political Geography:
Iran, Middle East, Persian Gulf, and Gulf Nations