"The Middle East in the Global Economy" Module at the University of Durham

Appendix to "Teaching economics to language and area studies students"

Module objectives

  • Analyse the direction and composition of Middle Eastern trade
  • Understand the major theories of oil pricing and their implications
  • Be able to undertake country risk appraisals with respect to the Middle East and appreciate how these affect foreign direct investment and portfolio flows
  • Appreciate how religious and cultural values can impact on business decision-making and understand the sensitivities and potential conflicts between the corporate culture of multinational companies and that of the region

Assessment

  • One two-hour examination (60%)
  • One essay of 4,000 words (40%)
  • The summative assessed essay should be chosen from seminar topics 4-12 and the formative assessed essay of 2,500 words from topics 1-3 inclusive.

Introductory reading

John Daniels and Lee Radebaugh, International Business: Environments and Operations, Addison Wesley, 1998, 8th edition
Toby Dodge and Richard Higgott, (eds.), Globalisation and the Middle East, Royal Institute of International Affairs, 2002.
Hassan Hakimian and Ziba Moshaver, (eds.), The State and Global Change: the Political Economy of Transition in the Middle East and North Africa, Curzon Press, London, 2001.
Masoud Kavoossi, The Globalisation of Business and the Middle East, Quorum Books, 2000.
Rodney Wilson, Economic Development in the Middle East, Routledge, 1995

Reader

Tim Niblock and Rodney Wilson, (eds.) The Political Economy of the Middle East, Edward Elgar, 1999.

Useful Internet sites

International Organisations

The IMF www.imf.org
The World Bank www.worldbank.org
World Trade Organisation www.wto.org
World Economic Forum www.weforum.org
International Chamber of Commerce www.iccwbo.org
Bank for International Settlements www.bis.com
European Union www.europa.eu.int

International Financial Media

Financial Times www.ft.com
Wall Street Journal www.wsj.com
Reuters www.reuters.com

Middle Eastern economy Websites

Economic Research Forum for the Arab Countries, Iran and Turkey
www.erf.org.eg/
World Bank Middle East title page
www.wbln0018.worldbank.org/mna/mena.nsf
International Monetary Fund country information (e.g. Egypt)
www.imf.org/external/country/EGY/index.htm
Middle East Economic Digest
www.meed.co.uk

Arab business media in English

Al Ahram (Cairo)
www.ahram.org.eg/weekly
Arab News (Jeddah)
www.arabnews.com
Gulf News (Dubai)
www.gulf-news.com
Jerusalem Post
www.jpost.com
Khaleej Times (Dubai)
www.khaleejtimes.co.ae
Star News (Amman)
www.star.Arabia.com

Content:

1. Theories of globalisation

  • Globalisation as westernisation: the clash of civilisations
  • Globalisation as a new imperialism: neo-colonialism and economic exploitation
  • Globalisation as liberalisation
  • Global governance and national sovereignty

2. The Middle East in the global economy

  • Gross national and gross domestic product differences
  • National income and wealth
  • Structural changes with industrialization
  • From agricultural to service economies.

3. The demographic and educational environment

  • The demographic transition in the Middle East
  • Labour surplus models
  • Urbanisation and population concentration
  • Human resource development

4. Trade patterns

  • Natural resource advantages
  • Relative labour costs
  • Technological deficiencies
  • The direction and composition of Middle East trade
  • The terms of trade trends
  • Trade policy issues, import substitution and protectionism.

5. The international market for oil and gas

  • Oil production and the rise of rentier economies
  • OPEC's effectiveness as a cartel
  • Explaining long term oil price trends and short term fluctuations
  • Oil revenue as a blessing or curse.

6. Country risk appraisal for Middle Eastern economies

  • Political and economic risk
  • Macro and micro risk
  • Transfer, operational and control risk
  • Risk appraisal techniques
  • Rating creditworthiness and debt

7. Foreign direct investment decisions

  • Multinational company expansion strategy
  • Resource and market seekers
  • Investment incentives
  • Multinational and host country conflicts

8. Exchange rate stability and macroeconomic performance

  • Exchange rate systems in the Middle East
  • The merits of pegging to the dollar versus floating
  • Inflation and purchasing power parity exchange rates
  • Monetary policy and exchange rates

9. IMF structural adjustment programmes

  • Balance of payments issues, deficits and borrowing requirements
  • Conditional finance
  • Budgetary policy and structural adjustment programmes
  • Economic liberalisation and privatisation in the Middle East

10. The banking infrastructure of the Middle East

  • Capital accumulation and the development of financial institutions
  • Savings, investment and capital formation
  • The banking system and financial markets
  • Financial deepening and widening

11. The emerging capital markets of North Africa, the Eastern Mediterranean and the Gulf

  • Corporate finance in the Middle East
  • Portfolio investment in the Middle East and cross listing
  • The Arab mutual funds industry
  • Screening criteria used by Islamic managed funds
  • Market depth and breadth in Cairo, Amman, Riyadh and Kuwait

12. Secular and Islamic business ethics

  • Islamic business and management ethics
  • Islamic finance in the global economy
  • Rationale for the prohibition of riba
  • Islamic financing methods
  • Islamic banking development

Case studies

The business environments in Egypt, Turkey, Iran and Saudi Arabia

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