Question

In the MENA region,

What is state capacity? How has the (RRLA) Resource Rich Labor Abundant region performed compared to the other subgroups in the region? What type of recommendations can you suggest to help the region improve its “governance”? Provide examples or refer to specific countries.

Answer 1

(PART-1)

The discussions on the economic future of the MENA region is based on the examination of its national and regional political causesof iyts contempotrary underperformance.Limited access orders and the deep states based in the means of coercion that underpin them undermine the state capacities and contrain beneficial, autonomous and political activity.

Increasingly challenged by their populations, these states face the unmet challenges of diversifying non-sustainable, rentier political economies away from direct or indirect dependence on oil and gas revenues. Also failure to generate alternative income sources combined with rapid population growth, with a big economic challenge that need to be overcomed immediately

(PART-2)

The world's fast growing economies in recent decades such as Japan, Hong kong, Taiwan, Singapore and china are all highly populated. That's the big reason why they are poorly endowed with natural resources relative to labor.

On the other hand, slowest growing but advanced economies are land abundant. Statistically very significant negative relationship have been found between GDP and indexes opf comparative advantage in natural resources based product.

Another often claimed and related explanation for growth rate difference is cultural determinism.

That's the reason by resource rich economies have grown relatively very slow.

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