Saudi - Bahrain Causeway. The GCC states are constantly making enormous investments to modernize their economies, without ignoring serious security challenges. Image Credit: Supplied

Global rivalries are intensifying, forcing change to the positions taken by the conflicting parties and which will have consequences on their economies. The nature of these rivalries will determine each nation’s position in the global balance of power.

While there are different understandings of the nature of these conflicts, all are in agreement that the economic battlefront will ultimately determine the winner. (Sure, there are some nations arguing for ideology and military power, but they remain a veritable minority.) The first group distil their efforts and funds to accelerate growth, thereby strengthening their economic infrastructure, which in turn would boost military strength. These states widen the development gap with the second set of nations, whose growth rates are slowing down and living standards deteriorating. This is due to unproductive military spending, which in turn leads to further economic weakness to a degree that is not possible to provide the simplest living requirements, such as clean drinking water.

An economic shootout

The major powers such as the US and China fully understand the nature of their rivalry as revolving around the economic, but without ignoring other aspects. This explains the flare-up between the two largest economies, particularly over technology.

Each side has been applying huge pressures to control and obtain contracts that will increase the association of other economies with either the American or Chinese power play. While China is a fierce competitor, the US has accumulated experience from its previous conflict with the Soviet Union during the Cold War, in which it triumphed thanks to its economic power. However, nuclear weapons and ballistic missiles that had consumed enormous resources because of the arms race were not mutually beneficial.

In the Middle East, there is no such scientific understanding among all powers. The GCC states are constantly making enormous investments to modernize their economies, without ignoring serious security challenges, in parallel to strengthening their military capabilities. Therefore, they enjoy high living standards and infrastructure matching those in developed countries.

They also provide significant assistance to countries, which share the same convictions. They have already sent aid to Egypt and Sudan, whereby Egypt achieves high growth rates - Sudan is on the same path and Tunisia may soon catch up with them.

Seeding wanton destruction

In contrast, other countries, such as Iran, seek to dominate, increase military spending, produce all kinds of weapons and attempt to make nuclear bombs that no one dares to use at all with great neglect of the the economic front. This has practically led to impoverishing its people and destroy its economic infrastructure, but also destroy the economic infrastructures of countries that are in its orbit, such as Iraq, Syria, Lebanon and Yemen.

Some of these countries are trying to disassociate themselves from the Iranian militarization and move towards rebuilding their economies. They will need years before they get back on their feet.

Accordingly, the nature of the conflict in the Middle East can be regarded as a “mini” cold war, where the economic power will have the final say in identifying the winners. A strong economic infrastructure strengthens cohesion on the domestic front, while the unbridled militarization leads to the fragility of society and destroys it from within.

-- The writer is a specialist in energy and Gulf economic affairs.