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Chapter 7 Section 5: Economic & Social Development: Lands of Wealth & Poverty (Review of GRQ’s 1 & 2)
Question #1 - The largest concentrations of petroleum… • 2 Areas of concentration: • Iranian/Arabian sedimentary basin (Saudi Arabia,Iraq, Iran, Oman, PG states) • North African fields (Algeria, Libya, Egypt)
Question #2… • With only 7% of the world’s population this region holds 68% of the world’s proven oil reserves. Saudi Arabia has 21,000,000 residents who live atop 26% of the planet’s known oil supplies!
Question #3… • Nations lacking in petroleum… • Morocco • Sudan • Israel • Jordan • Lebanon • Turkey
Question #4… • In addition to their large oil reserves, the wealth of many of these nations is compounded by their relatively small populations. • Bahrain’s population: 701,000 • Qatar’s population:596,000 • Kuwait’s population:2,275,000 • UAE’s population: 3,108,000
Question #5: Petrodollar distribution in oil-rich nations… • Much of the oil wealth remains concentrated in the hands of a small “elite” • However, petrodollars (revenue from the sale of petroleum) provide a higher standard of living and other benefits for the rest of the population as well (schools, medical facilities, low-cost housing, modernized agriculture)
Question 5 continued… • Bahrain’s per capita GDP:($17,640) • Qatar’s per capita GDP($11,600) • Kuwait’s per capita GDP:($20,910) • UAE’s per capita GDP:($17,965)
The region’s wealthy elite… • The King of Saudi Arabia made the list of the world’s wealthiest people (3rd richest head of state) with a net worth of over $20 billion • 4th richest head of state-Sheikh Zayed UAE • 7th = Emir of Kuwait • (#1 = King of Thailand; #2 = Sultan of Brunei – both in SE Asia)
Question #6…Israel’s high standard of living… • Israel’s per capita GDP: $19,730 • They’ve invested large amounts of capital in a highly productive ag. And ind. Base; • Global center for high-tech computer & telecommunications products; • Many US & European industrial development & production centers; • Entrepreneurial business culture
Question #7: Turkey’s diverse economy… • Produces varied agricultural & industrial goods for export (cotton, tobacco, wheat, fruit, textiles, tobacco) • Most important tourism destination in the region • Maintains close ties with the West (like Israel)
Effects of regional poverty… • Poorer countries in the region have low literacy rates, lack access to modern services & infrastructure) • “Brain Drain” the brightest young people in the poverty stricken nations leave those countries for better jobs in other parts of the world • Yemen is the poorest country in the region (per capita GDP = $ 360) Many work outside their country.
OPEC…Question 8 • Organization of • Petroleum • Exporting • Countries • (www.opec.org) • OPEC ensures this region will play a role in affecting world oil supply and therefore prices…however…it doesn’t have as much clout as it used to. Many oil rich Arab nations are now allowing foreign investment and/or establishing partnerships with foreign corporations increasing the regions integration into the global economy.
GRQ #2 Q1 – factors contributing to poverty • SUDAN: civil war resulted in the emergence of S. Sudan as a separate nation; both Sudanese nations have serious, ongoing political instability problems that have created serious poverty for their citizens. There is significant oil near the border & China is an interested customer, but the 2 nations can’t agree on how to split/share the oil.
GRQ #2 Q1 – factors contributing to poverty • MOROCCO: still undeveloped & poor in Atlas Mt. Region, but in urban areas economic reform & privatization have led to economic growth. Unfortunately, “BRAIN DRAIN” has hurt their chances for future growth (happens when smart, young people leave the country for better opportunities elsewhere); • EGYPT: had significant economic growth under Pres. Mubarak in the 90’s, however, the gap between rich & poor was huge & a big contributing factor to Mubarak’s overthrow & the Arab Spring revolt of 2011. Egypt is currently under military control & it looks less and less like the democratic reforms that were the basis of their revolution will actually occur.
Q# 5 – Tourism • Tourism links the region to the global economy; • Tourism magnets include ancient historical sites & globally significant religious localities. Also, beaches & climate draw tourists as well. • Resort hotels, which once were lacking, are now growing in response to tourism demand.
Question 5 continued • Tourism brings in big dollars to the region & is expected to grow as a % of the overall regional economy throughout the 21st century. It is threatened, however, by regional political unrest & instability. • Also – Tourism has produced a local underclass of poorly paid service workers & is widening the gap between the wealthy & the poor.