Research & Commentary Results

Vision 2030 promises a transformation of Saudi Arabia’s economy, and the financial sector will be crucial to achieving this. The sector will facilitate private investment focusing on small and medium-sized enterprise (SME) financing, fund mega-projects, and be a driver for diversifying away from oil. As a result, banks’ role must go from being distributive and largely passive to developmental and active. This article will highlight how the role of the Saudi banking sector has been transformed in the last five years and how its composition is changing to cope.

These developments come against the backdrop of multiple U.S. hints that Washington is potentially willing to circumvent sanctioning the participating parties under the Caesar Act.

We rarely miss an opportunity to criticize our Gulf Arab partners — sometimes rightly so — for not doing enough to safeguard collective interests. But one must acknowledge that on Afghanistan, and especially our just-completed exit from the country, most of our Gulf Arab partners absolutely shined. They deserve a ton of credit for the role they played in our large, challenging, and deadly evacuation — a role which was nothing short of indispensable.

There is a puzzle in the profits of Gulf Cooperation Council (GCC) firms, especially conglomerates. Even as the size of GCC economies has grown considerably in the last two decades, corporate profits have been flat. With a goal of economic diversification to expand private sector business and job opportunities for citizens, the imperative to create an environment for growth is acute for regional governments. Tarek Fadlallah, CEO of Nomura Asset Management Middle East and a member of the Program on Economics and Energy Advisory Council, lays out some of the challenges for Gulf economic diversification and improved corporate profitability.

A reinvigorated international approach to Yemen is possible. The current architecture for advancing a negotiated peace is being challenged by both international and local developments. The protracted nature of the conflict, the risk that it could worsen, and local political developments over the past two years necessitate a recalibration of the peace process, informed by realities on the ground, the urgent needs of the population, and the demand for security. Evolving coalition priorities, renewed U.S. engagement, and the appointment of a new U.N. special envoy may be an opportunity to advance conflict resolution. Achieving greater unity among southern actors will be key to the success of national-level talks and is urgently needed to prevent a further descent into violence, extremism, and humanitarian catastrophe.

Read MEI’s weekly briefing featuring expert analysis of key regional developments for the week ahead.

Many analysts oversimplify the political conflict between Iran and Saudi Arabia as one driven by sectarianism or Shi’a-Sunni tensions that has shaped the two states’ outlook and actions in the Middle East. However, their political differences are actually much more complex and deeper rooted.

Speaking at a public event earlier this month, Egyptian President Abdel-Fattah el-Sisi made the surprise announcement that the next step in the country’s economic reform agenda will include the removal of bread subsidies. He becomes the latest in a long line of presidents to target the bread subsidies that provide cheap sustenance to a country of (now) over 100 million people at a huge cost to the state, although none of his predecessors ever successfully managed to remove or significantly reduce them.

الدولتان في الشرق الأوسط اللتان تتمتعان بأعلى توقعات نمو لعام 2022 هما إسرائيل ومصر. وتقدر مؤسسة فيتش سوليوشنز أن الناتج المحلي الإجمالي على مستوى منطقة الشرق الأوسط وشمال إفريقيا سينمو بنسبة 3.6% في عام 2021، بعد انكماش بنسبة 4% في عام 2020. هنا نجد أن مصر وإسرائيل هما الدولتان الوحيدتان في المنطقة اللتان يُتوقع نمو اقتصادهما بما يتجاوز حجم مستويات ما قبل كوفيد-19.

At the dawn of the Biden era of American foreign policy, a more mature, realistic Saudi foreign policy is emerging to match the shifting signals from Washington. In some measure, the Saudis are readopting elements that traditionally characterized their policy preferences before the meteoric rise of Crown Prince Mohammed bin Salman (MbS), the kingdom’s de facto ruler.

Read MEI’s weekly briefing featuring expert analysis of key regional developments for the week ahead.

On Sept. 15, 2020, Emirati Foreign Minister Abdullah bin Zayed al-Nahyan, Bahraini Foreign Minister Abdullatif bin Rashid al-Zayani, then-Israeli Prime Minister Benjamin Netanyahu, and then-U.S. President Donald Trump met on the South Lawn of the White House to sign the Abraham Accords, normalizing relations between the two Gulf Arab states and Israel. Morocco followed suit several months later, signing a similar agreement with Israel on Dec. 22, and a week and a half after that, on Jan. 6, 2021, Sudan and Israel also agreed to normalize relations. A year on, these accords have had a significant, if not yet fully realized, impact on the Middle East, affecting everything from geopolitics and economics to tourism and people-to-people (P2P) ties, and they also reflect the changing dynamics in the region and beyond, particularly with the U.S. and China.

Amb. Dennis Ross and Karen Young join guest host Gerald Feierstein to discuss the progress of relations between Israel and the Arab world one year after the signing of the Abraham Accords, as well as the agreement’s economic impacts and what role the United States will play moving forward.

The two countries in the Middle East with the highest growth expectations for 2022 are Israel and Egypt. Fitch Solutions estimates that MENA-wide GDP will grow by 3.6% in 2021, after a contraction of 4% in 2020. Egypt and Israel are the only countries within the region expected to grow their economies beyond the size of their pre-COVID-19 levels for 2021.

Since late June, Russia has expanded its diplomatic involvement in the Grand Ethiopian Renaissance Dam (GERD) dispute between Egypt, Sudan, and Ethiopia. While Russia has offered technical assistance to the GERD’s conflicting parties, it has refrained from inserting itself into the Nile dam dispute as a mediator and instead balanced the views of Egypt, Sudan, and Ethiopia in multilateral fora. Russia’s balancing strategy has been positively received in Sudan and Ethiopia but has created latent frictions with Egypt. Russia has persisted with this non-interference policy, as it has largely prevented a spillover of tensions over the GERD to other areas of cooperation with Egypt and believes that its position will help consolidate its partnership with Ethiopia.