Implications of the Growth of China and India for the Middle East

Middle East Development Journal, Vol. 1, Issue 1, pp. 79-103, 2009

Posted: 11 Nov 2009 Last revised: 19 Jul 2011

See all articles by Elena Ianchovichina

Elena Ianchovichina

World Bank

Maros Ivanic

World Bank; World Bank - Development Economics Group (DEC); World Bank - Development Research Group (DECRG)

Will J. Martin

International Food Policy Research Institute (IFPRI)

Date Written: June 1, 2009

Abstract

The Middle East and North Africa (MENA) region is expected to benefit more than most other regions from continued rapid growth in China and India. This paper analyzes the trade-related implications of this growth for the MENA countries using a global general equilibrium model, modified to take into account the focus of China and, increasingly, India on exports of manufactures from global production chains. To obtain a better idea of the implications for key countries in the region, we developed a database with expanded coverage of Middle-Eastern countries. We find that most of the gains to the MENA region come from improvements in the terms of trade, particularly linked to increasing demand for energy. Exports from the Middle East as a whole are expected to decline although exports from the non-oil economies will likely expand. Fuelled by higher incomes and by increases in the competitiveness of China and India, imports into MENA are expected to increase. In the oil-exporting countries of the Middle East, Dutch-disease effects increase the importance of policies to promote adjustment to the changing world environment.

Keywords: Export growth, China, India, Middle East, Dutch disease, general equilibrium

Suggested Citation

Ianchovichina, Elena and Ivanic, Maros and Martin, William J., Implications of the Growth of China and India for the Middle East (June 1, 2009). Middle East Development Journal, Vol. 1, Issue 1, pp. 79-103, 2009 . Available at SSRN: https://ssrn.com/abstract=1503902

Elena Ianchovichina

World Bank ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-8910 (Phone)
202-522-1159 (Fax)

Maros Ivanic

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

World Bank - Development Economics Group (DEC) ( email )

1818 H Street N.W.
Washington, DC 20433
United States

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

William J. Martin (Contact Author)

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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