California State University, Fullerton

News Categories

CSUF News Service

Giving Students a Perspective on How Conflict Affects Economics

Course Focuses is the 'Economies of the Middle East'

Aug. 21, 2014

Blond-haired woman in red flannel jacket stands on a beach

Jane V. Hall

Download Photo

Jane V. Hall, emeritus professor of economics and a nationally recognized expert in environmental economics, is focusing her attention these days on the Middle East.

This fall, as she has done for 10 years, she will draw upon news and history to explore how armed conflict affects a region's economy. Her upper-division course, "Economies of the Middle East," (which she defines as Turkey, the Gulf States, and Iran west to Egypt) really gets students engaged and is a pleasure to teach, says Hall, who has taught on campus since 1981.

"I went to school in Alexandria, Egypt, and had family living in Khartoum, so I know something personally about the region, the culture, history and people," she explained.

"As a natural resource economist, I worked in the oil industry, and oil is an essential consideration in the regional and global economies.

"At CSUF, I started a course in energy economics, which covered this aspect of the region, and I've done research in water scarcity in the region, as well as the impact of oil price spikes on economic growth. Also, this course is closely related to international economics, which I also teach."

What do you see ahead for regional and global economies considering the current events?

Not a single country in the region is immune from economic upheaval resulting from conflict or the potential for conflict, even Turkey, which is a NATO member. This stifles investment (especially foreign investment). Infrastructure is destroyed, debt is worsened by military spending, and the 'brain drain' worsens (educated professionals migrate).

The global economy is impacted by unstable oil prices, especially oil price spikes, which are linked to recessions. The Suez Canal is a crucial route linking Europe to Asia, and when access is disrupted trade across the globe slows. Some countries, notably Turkey and Jordan, are harboring large refugee populations as a result of conflict across their borders, putting pressure on their limited resources. A country like Egypt that is economically dependent on tourism is hard hit by domestic violence.

So, we already know what the economic consequences look like. The question is will conflicts be resolved, and will it be in a way that is conducive to economic development? The signs are not hopeful.

Israel and Palestine are growing farther apart on any resolution. The divisions that led Lebanon into a long civil war are re-emerging. It is very unclear what the map will look like when Syria and Iraq find some internal resolution, and it will probably not be soon. Will Sisi manage the Egyptian economy well enough to quell domestic unrest and regain tourism as an important source of income? In short, the issue is how to manage to achieve economic goals in spite of the turmoil.

What should today's business students know most about the economies of the Middle East?

First, all countries in the region face significant challenges in seeking to increase human development, meaning gains in health, education, economic opportunity and basic security. Even countries, such as Kuwait, with high average incomes have to be concerned with how to maintain that. Beyond that, every country is different in the resources it has, population, economic institutions and present economic circumstances. All have improved the standard of living, but not consistently, and in some cases not to a very high quality.

Business students need to think about how all of this relates to the potential for investment (including a host of risks). They might consider the opportunities for graduates with firms that operate in the region. In addition to local firms, many large international companies have facilities and markets there. There are possibilities as analysts and in professional services.

Globally, firms that have large markets in the Middle East or depend on imports from the Middle East see the greatest impacts. This ranges from industries — from pharmaceuticals to plastics, as well as refining — that depend on oil feed stocks, to those that sell high tech transportation and telecomm equipment to the Gulf States, and professional services firms from logistics to accounting to construction. Countries in the region are also a significant market for armaments and defense systems.

What will students take away from this class?

They will learn why these countries face the challenges they do, how and why these differ from other developing countries, and what economic policies and strategies might lead to successful sustained growth and higher standards of living. By definition, this includes some political economy and history about why there is so much unremitting conflict and the economic consequences of this. We will look at some countries in more depth than others, and consider what they have already tried.

Why are large oil reserves not always a long-term benefit to a country?  How can pervasive and increasing water scarcity be addressed?  How will climate instability make things more complicated?  Why is the young population so restive, and w hy is the US government so focused on the region?

These are the questions I hope students will be prepared to answer by the time the class is over,

Tags:  Academics & ResearchTitan Pride