Middle East and North Africa MENA Countries and Economy
Cierra Murry is a banking consultant, loan signing agent, and arbitrator with over 15 years of experience in financial analysis, underwriting, loan documentation, loan review, banking compliance, and credit risk management.
MENA is short for the Middle East and North Africa region. It includes approximately 19 countries but can be stretched to include up to 27. According to the World Bank, MENA consists of 21 countries and accounts for about 6% of the world’s population.
The MENA region holds more than half of the world’s oil reserves and two-fifths of the world’s natural gas reserves, making it a significant source of global economic and energy resources.
Key Takeaways:
– MENA includes around 21 countries, has vast oil and natural gas reserves, and is an important source of global economic resources.
– The region is afflicted by persistent conflicts, making it a proxy for global economic power with the involvement of the United States and Russia.
Many OPEC nations are part of the MENA region, and it typically includes countries from Morocco in northwest Africa to Iran in southwest Asia and Sudan in Africa. Some countries frequently included are Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Malta, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates, Palestine, and Yemen.
Economic growth in the MENA region fell by 3.8% in 2020 due to the challenges posed by COVID-19.
Key MENA Economies:
– Kingdom of Saudi Arabia: The largest economy in the region, heavily reliant on petroleum and natural gas exports.
– Islamic Republic of Iran: The fifth-largest economy, diversified but restricted by international sanctions.
– State of Israel: The second-largest economy, focused on industrial manufacturing, diamond cutting, and high technology.
– Egypt: The largest economy in North Africa, undergoing market reforms and known for hydrocarbons, textiles, and agricultural products.
Investing in the MENA region primarily revolves around energy industries due to its significant oil reserves. However, some economies are re-orienting themselves to reduce dependence on fossil fuel exports. The United Arab Emirates and Qatar are focusing on technology and financial services, respectively.
Investment opportunities in the region include ETFs that target specific countries’ oil and natural gas markets, as well as North Africa, the Middle East, or the MENA region as a whole.
There is no specific MENA-specific ETF that encompasses the entire region, but there are sub-regional or country-specific ETFs available for American investors, such as VanEck Africa Index ETF (AFK), iShares MSCI Saudi Arabia ETF (KSA), VanEck Egypt Index ETF (EGPT), iShares MSCI Kuwait ETF (KWT), iShares MSCI UAE ETF (UAE), iShares MSCI Qatar ETF (QAT), and iShares MSCI Israel ETF (EIS).
Please note that investors in different countries may have access to different MENA-specific funds.
The Middle East, North Africa, and the MENA region do not have specific boundaries. Countries like Turkey, Afghanistan, and Sudan may or may not be included in the region.
In recent years, conflicts in the MENA region have been influenced by major local conflicts and foreign interference. The U.S. invasions of Iraq and Afghanistan disrupted regional economic activities. The 2011 Arab Spring protests led to revolutions, civil wars, and a significant refugee crisis. Also, various conflicts involving Israel, Palestine, Syria, Yemen, Iraq, Afghanistan, and political instability in Lebanon contribute to the regional tensions.
MENA stands for the Middle East and Northern Africa, referring to the countries between Iran in the East and Tunisia and Morocco in the West.
The countries commonly included in the MENA region are Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Malta, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, the United Arab Emirates, Palestine, and Yemen. Some other countries like Mauritania, Somalia, Sudan, Turkey, and Western Sahara may also be included.
The Middle East generally includes countries on or near the Arabian Peninsula. According to the CIA World Factbook, the Middle East comprises Armenia, Azerbaijan, Bahrain, Gaza Strip/West Bank, Georgia, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, Turkey, United Arab Emirates, and Yemen. Afghanistan and Pakistan are sometimes included in the Middle East, but not in the MENA region.
North Africa consists of countries like Algeria, Egypt, Libya, Morocco, Sudan, Tunisia, and Western Sahara. This term can also encompass East African countries such as Djibouti and Somalia.
In conclusion, the MENA region is an important energy resource-rich area, located between the West and Asia. It is home to significant oil and natural gas reserves, making it an attractive investment opportunity. However, the region also faces the risk of conflicts that can impact economic stability.
