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The Economies of Africa & the Middle East

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  • 0:00 Developed vs. Developing
  • 0:38 Subsistence Survival
  • 1:20 Extractive Economies
  • 2:04 Service-Based Societies
  • 3:20 Financial Centers
  • 4:04 Lesson Summary
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Lesson Transcript
Instructor: Kevin Newton

Kevin has edited encyclopedias, taught middle and high school history, and has a master's degree in Islamic law.

Africa routinely tops the list of poorest continents, yet it has seen numerous people become billionaires. Meanwhile, there are camel herders in the Middle East who drive $80,000 SUVs. This lesson will help make sense of the economic activities of these two regions.

Developed vs. Developing Economies

All across the Middle East and Africa you can find economic activity of every kind imaginable. To say that these regions have real economic potential is an understatement. Literally tens of trillions of dollars in oil, gold, diamonds, and various other mineral wealth sit under the ground, while more than a billion people drive countries where the status of the wealthy is changing more and more every day. But Africa and the Middle East are places of great contrasts. Here some of the poorest people in the country live in the shadow of some of the world's newest billionaires.

Subsistence Survival

Many of the poorest people in Africa and the Middle East are caught in subsistence-based economies, or those economies where daily survival is the primary focus. By 'survival', I don't necessarily mean physical survival, although in places like Somalia that is the case. Instead, I mean having enough resources to purchase food and other necessities, or if not purchase it, grow it. For many people, this is the way of life that they have known for generations. However, for some it is a conscious choice as a way to avoid losing cultural contacts with the past. For example, many Bedouin in the Arabian Peninsula herd camels, but they use brand-new SUVs and carry smartphones.

Extractive Economies

Of course, much of the Bedouin's wealth is a result of the oil fields that have made the countries of the Arabian Peninsula quite wealthy. For many people, oil is the primary economic activity associated with the Middle East. However, it is not the only one. That said, such extractive economies, where people make a living by pulling resources from the land, are very common in Africa and the Middle East. While oil is the primary example for much of the Middle East, it also holds true in places like Angola and Nigeria in Africa. Also, it is not only oil at play. Countries like Botswana and South Africa grew very rich off of the massive diamond mines that dot their respective landscapes.

Service-Based Societies

Mining diamonds is one thing, but polishing them and selling them is a completely different type of economy. These service-based economies rely on services like tourism, translation, and other service-based industries to boost their economic output. In this, Egypt is a great example.

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