Bold reform – the gordian knot of prudent public finance

On the whole, the Middle East seems to have been quite resilient to the global financial crisis thus far. Both the energy commodities exporters and the countries that do not enjoy large oil reserves have mostly been able to maintain healthy annual growth rates, even though they suffered the inevitable setbacks, especially during the most acute phase of the credit market meltdown. For the Gulf Cooperation Council countries, the performance was driven mainly by the public spending capacity accumulated during the years of climbing energy commodity prices, which has allowed governments to maintain an unabated flow of funds into infrastructure investments. But for the Middle Eastern countries that do not enjoy substantial commodity resources, the resilience came from a structural shift in economic policy. In particular in the Levant (Egypt, Jordan, Syria and Lebanon), the economy was able to withstand the impact of the global crisis thanks to the long