Should the middle east countries depend on the oil for their economy Essay

Should the middle east countries depend on the oil for their economy - Essay Example As the vast oil reserves were discovered, the economy or group of economies experienced significant changes in various macro-economic aspects (TÃ ©treault). From business point of view, oil is not only a fuel but also an object for trade. Many authors and academicians agreed that it a very important source of foreign exchange and contributor to economic development. Middle East’s aggregate oil reserves are accountable for approximately 66% of total oil supply in the world. Monopoly in oil industry has resulted in wealth creation at a rapid pace in majority of countries in the region. Apart from the vast reserves, another reason behind oil monopoly of Middle Eastern (ME) countries is that these countries have been a great support to the world economy during major oil and energy crisis in 1979-81 and 1985-86. However, the oil industry is also a reason of economic misery in the ME region, it has resulted in power intervention, political corruption and militarization (TÃ ©treault; Toft 7265-7274). Oil is considered as a resource of paramount importance in domestic as well as international economic and political environment from importers’ as well as exporters’ point of view. While oil is the main source of economic development and global recognition for ME countries, the ME economy does suffer from various disturbances as a cost of owning the largest reserve of the lucrative resource. It was observed during the study that the oil wealth has created national economic distortion and imbalance in power and wealth distribution. Keeping in view the disadvantages of oil as a source of economic development, the paper presents arguments against the heavy dependence of ME economy on oil as a source of economic sustenance. The primary reason behind tremendous importance of oil in the Middle East is its role in the world economy. Oil is a source of national importance not only to small developing economies but also to major developed economies such as