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Dubai, United Arab Emirates. The Middle East has weathered the global economic downturn better than other parts of the world because the region’s energy exporters were able to tap billions of dollars in oil profits from when prices were booming, the International Monetary Fund said on Sunday.

The IMF also said oil exporters in the Middle East and North Africa were expected to increase their international reserve positions by more than $100 billion in 2010 as oil prices rebound.

By reaching into reserves, major oil producers such as Saudi Arabia shielded their economies from the worst of the slump by maintaining government spending and injecting liquidity into domestic banking systems rattled by the credit crisis.

Doing so not only blunted the impact of the downturn on their own economies, but also “generated positive spillovers for their neighbors,” said Masood Ahmed, director of the IMF’s Middle East and Central Asia Department.

That spending came at a price. The IMF estimates Mideast oil exporters together drew down their rainy-day reserves by nearly $350 billion over the past year. That figure includes the major exporters in the Persian Gulf as well as far smaller exporters such as Sudan and Yemen.

The plunge in oil prices from last year’s record high near $150 a barrel has left the Middle East’s oil exporters with less revenue to replenish its cash reserves this year. The IMF expects the portion of the countries’ economies based on oil to fall by 3.5 percent this year. That drop is partially offset by slower but still positive growth of 3.2 percent in the rest of the economy.

Next year, the IMF expects the region’s oil exporters will see both the oil and non-oil parts of the economy rise by around 4 percent.

A rebound in demand for oil should also allow energy exporters to refill their coffers with more than $100 billion in oil revenue next year, the IMF predicts.

Mideast countries without oil exports to fall back on have been only moderately hurt by the global recession, the IMF said. That is because they are not so tightly linked to the global banking system, and because trade and labor ties allowed them to benefit from richer neighbors’ willingness to spend.

Their economies are expected to grow at 3.6 percent this year, down from 5 percent in 2009, and “can only look forward to a very modest rebound” as the world economy improves, the IMF said.

The IMF also said that the rebuilding of international reserve positions the Middle East and North Africa would help governments of the region maintain public spending, which has helped mitigate the impact of the global financial turmoil on their economies.

Oil exporters have suffered as oil prices dropped to near $30 per barrel around the turn of the year from a lifetime high of $147 per barrel in July 2008. Since then, it has rebounded to near $70 dollars per barrel.

The IMF projected that the economies of all countries of the Middle East and North Africa in addition to Afghanistan and Pakistan are expected to grow 4 percent in 2010.



AP, AFP