For decades, major Middle Eastern economies cashed in on a geological bounty: vast quantities of easily accessible crude oil stretching in a carbonaceous crescent from the sands of the southern Arabian peninsula, across Iraq and Kuwait, and into Iran.
These countries’ collective good fortune provided — in certain places, at least — a measure of social stability and the promise of rising standards of living. That promise continued through the latter part of the 20th century, as the world’s appetite for fossil fuels grew more insatiable still.
As we close the books on the second decade of the 21st century, the situation is decidedly dicier. Noted energy attorney Amir Handjani has written at length about the precariousness of Saudi Arabia’s cash position, for instance — a circumstance that drove the kingdom to explore a partial IPO for its state-owned oil company (now delayed) and accelerate the diversification of its energy sector.
Other Middle Eastern economies are following suit, investing in industries that have little or nothing to do with fossil fuels. Indeed, some are farther along, able to serve as models for those playing catch-up.
What does the economic future look like in these places? With cooperation across sectarian, political, and national lines, these five economic development and diversification opportunities will play an outsize role in the Middle East of the future.
As its fossil fuel reserves dwindle and mushrooming climate change render the status quo untenable, technically capable Middle Eastern economies are turning to homegrown nuclear power, according to Forbes contributor Ellen Wald. Despite safety concerns and immense start-up costs, nuclear remains the world’s most reliable and powerful sources of renewable energy. A handful of reactors already stand across the region; more are likely to come online in the coming decade.
Recent technical advances put solar power nearly on par with nuclear; the final hurdle is storage capacity, which battery manufacturers are racing to solve. The Middle East, of course, receives vast amounts of solar radiation, and many parts of the region — notably the Empty Quarter of the Arabian Peninsula — are virtually uninhabited.
The Middle East’s arid climate favors another ascendant industry: semiconductor production, a delicate and precise process best performed in extremely low-humidity environments. The U.S. city of Phoenix, one of the country’s driest, is a hub for semiconductor production for precisely this region.
Tourism has long been a staple of glitzy Middle Eastern cities like Dubai and history-drenched places like the Lower Nile Valley. But a gentler form of eco-conscious sightseeing is taking root across the region as well as awareness of its fragile ecosystems grows. Middle Eastern countries without abundant natural resources may soon stake their economic futures on attracting global tourists.
There’s no reason for the Middle East’s tech economy to stop at semiconductors. Israel, the region’s most diversified economy, is already a hub for consumer tech, cybersecurity, and other cutting-edge industries. With the right combination of internal investment and recruiting from abroad, wealthy former petrostates in the United Arab Emirates and elsewhere could follow suit.
A New Day Is Dawning. Who’s Waking Up?
If the Arab Spring proved nothing else, it’s that youth truly do have the power to make their voices heard, even in a region known for many things other than popular protest. Those who came of age during the heady early days of the Spring are now in positions of power across the Middle East. Their paths have diverged, to be sure, but it remains true as ever that they hold the region’s destiny in their hands.
It’s a new day in the Middle East, one in which the tired assumptions of the past matter less than ever. The question is, who’s rising to greet it?