What role have natural resources played in the politics and economy of the Middle East?

Running head : Role of Natural Resources in the Politics and Economy of the Middle East

Role of Natural Resources in the Politics and Economy of the Middle East [The name of the writer appears here]

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INTRODUCTION

For the last 60 years oil has been of major importance for the economies of the Middle East . The region has about one-half of the world 's oil reserves and approximately one-quarter of global supplies of natural gas . Middle East oil has been an intermittent preoccupation for western governments

and business , particularly throughout the dramatic 1973-4 and 1979 oil price rises , as these had a most important impact on the world economy . Within the region itself , oil production has accounted for a considerable proportion of national product and been the main source of government finance . The earnings produced from oil have not merely contributed to development funding in the oil-exporting states however have as well flowed into the non-oil economies through inter-government assistance , remittances and , to a lesser extent private investment flows (Marc J O 'Reilly , 1999

Oil and gas exports are likely to stay vital for the economies of the Middle East for the predictable future , regardless of the price reductions since the mid-1980s . The price of oil has had a major impact on past development trends , as well as the region 's economic prospects cannot be assessed without some predictions of future price changes . The determinants of oil prices are as a result of very important interest as far as Middle East development is concerned

NATURAL RESOURCES

The Middle East holds considerable quantities of natural wealth in forms other than oil reserves - for instance , the phosphate deposits of the Maghreb , which contain nearly half of the world 's known reserves of that mineral . In the area at large , extensive mineral surveying has taken place in the past decade , as firms and governments have searched for new sources of prosperity and for the means to greater economic diversification . Despite these efforts , petroleum remains of such overwhelming economic and geopolitical importance that other mineral resources are relatively insignificant

The development of the Middle Eastern oil industry began in 1901 with the granting of a concession by the Persian government to William Knox D 'Arcy , a British engineer . In exchange for the rights to search for and exploit petroleum resources in Persia , excluding the northern provinces where Russian influence was strong , the terms of the concession required the operating company or companies to pay the Persian government ?20 000 in cash and ?20 , 000 in stock . In addition , the Persian government was to receive 16 percent of annual net profits , plus a small annual payment of about ?4 ,000 (R . K . Ramazani , 1998 The British government took an interest in the search for oil from the beginning . At that time , it was determined to convert the Royal Navy from coal to oil , but the British Empire lacked a secure and adequate source of petroleum . In 1907 , Great Britain reached...