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Biggs on Finance, Economics, and the Stock Market: Barton's Market Chronicles from the Morgan Stanley Years by Barton Biggs

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Section 3D: Europe, Middle East, Africa

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In Eye of the the Storm

November 25, 1986

The small nations along the rim of the Arabian Gulf are holding up well in the face of austerity, terrorism, and war. Being there recently reminded me again of how fascinating the Middle East is. I like everything from the feeling of intensity and the complexity of the relationships to the strong bright light that washes every scene from the cities to the deserts.

The combined oil earnings of the six Gulf states (which account for 90 percent of government revenues) have plunged from $163 billion in 1981 to $55 billion last year, so it is not surprising that there is a recession there. The massive infrastructure construction boom throughout the Gulf is now about over. Five years ago in Kuwait, the Korean workers labored 24 hours day, but now the great national buildings are complete, and the city with its subtle blend of modern and traditional Arab architecture is striking as it lies shimmering in the blue curve of the Gulf. In Oman last weekend, the last of the great projects was completed when the sultan before 1,000 guests dedicated his $340 million university. The complex includes a $120 million teaching hospital, a mosque for 2,000 people, libraries, sports halls, residences, television studios, and formal gardens. At the peak, a workforce of 4,000 was involved in the construction.

The design of ...

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