After the shock: Diverging paths in the Middle East

Opinion 15-04-2026 | 10:15

After the shock: Diverging paths in the Middle East

*]:pointer-events-auto [content-visibility:auto] supports-[content-visibility:auto]:[contain-intrinsic-size:auto_100lvh] R6Vx5W_threadScrollVars scroll-mb-[calc(var(--scroll-root-safe-area-inset-bottom,0px)+var(--thread-response-height))] scroll-mt-[calc(var(--header-height)+min(200px,max(70px,20svh)))]" dir="auto" data-turn-id="request-WEB:f54d6c97-71cf-4cf5-af73-14d0fd5848b4-47" data-testid="conversation-turn-12" data-scroll-anchor="false" data-turn="assistant">As conflict reshapes the region’s economy, the contrast sharpens between states built on diversification and resilience and those weighed down by escalation, fragility, and internal collapse. 
After the shock: Diverging paths in the Middle East
Those who build on diversification are not shaken by crises, they are strengthened by them.
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The recent crisis in the Middle East was not merely a passing military confrontation, but a revealing moment that reshaped the region’s economic and political landscape. Developments showed how a decision to engage in conflict can undo years of progress, and how one model of governance can endure while another collapses under the weight of its own choices.

 

The World Bank report of April 2026 provides a precise picture of the scale of the shock. The disruption of the Strait of Hormuz, through which around 20 percent of global oil and gas supplies pass, caused an unprecedented disturbance in energy markets. Oil prices rose to about 112 dollars per barrel, an increase of nearly 60 percent, while gas prices climbed by around 70 percent. The repercussions did not stop there. Maritime traffic through the strait declined by as much as 95 percent, directly affecting supply chains and global trade.

 

This shock was not neutral. It exposed the fragility of certain economies, foremost among them Iran. The country entered the crisis already suffering from severe inflation, with food prices rising by about 99 percent. It then faced an almost complete collapse in economic activity, as trade was disrupted, infrastructure damaged, and key productive sectors brought to a halt. With around 3.2 million people displaced in just two weeks, the situation could no longer be described as merely an economic crisis, but rather as a comprehensive internal breakdown.

 

 

Escalation as a Strategy

 

The repercussions of these policies were not confined to Iran’s domestic sphere, but extended to the entire region, where regional economic growth excluding Iran declined from 4 percent in 2025 to a projected 1.8 percent in 2026, according to the World Bank report, with sharp contractions in some countries such as Iraq at minus 8.6 percent, Kuwait at minus 6.4 percent, and Qatar at minus 5.7 percent. The picture becomes clear here. This decline was nothing but a direct result of an approach based on escalation rather than development by Iran’s ruling clerical system.

 

Amid this landscape, a fundamental difference between state models stands out. The report confirms that the ability to recover is not measured solely by the size of resources, but by the degree of economic diversification and the strength of institutions. Countries that relied on a single resource found themselves more vulnerable to collapse, while those that invested in diversification proved their ability to absorb shocks.

An alternative model

 

From this perspective, the United Arab Emirates emerges as a different model. It has a diversified economy that spans energy, services, tourism, and technology, supported by strong financial capacity and robust institutions. This model did not come by chance but is the result of a long-term strategic vision that has made the country more resilient in the face of crises, more capable of rapid recovery, and even able to turn challenges into opportunities.

 

What this crisis reveals goes beyond the present moment and raises a question about the future: who will lead the post conflict phase. The indicators are clear. Countries that built their economies on diversification and stability will move ahead, while those that chose the path of conflict, expansion, and the creation of crises at the expense of development will fall behind.

 

In this context, the Iranian system today appears as the exact opposite of the logic of a modern state. It is a system that has drained its resources, weakened its economy, and deepened its isolation, to the point that it now resembles an entity collapsing from within. More dangerously, it is not content with this trajectory but seeks to pull the region down the same path.

 

Put simply, it is a model of military, political, and economic self-destruction. A system no longer capable of sustaining itself yet attempting to bring others down with it.

 

The future, however, will belong to states that chose building over destruction, and to those that understood that real power is not measured by missiles, but by the resilience of the economy, the continuity of society, and the ability of vision to shape the future.

 

By this measure, the United Arab Emirates appears among the most prepared not only to recover, but to move toward a stronger phase, because a system built on diversification is not shaken by crises, it is refined by them.

 

 

Disclaimer: The opinions expressed by the writers are their own and do not necessarily represent the views of Annahar.

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