The Impact of Economic Vulnerability and Resilience on GDP among Selected OPEC Countries

The Middle East countries, especially Persian Gulf and North Africa economies, are dependent on crude oil exports. As a result, volume of export, exchange rate and other macroeconomic variables, in particular government budget are volatile, and these oil-based economies are vulnerable to external shocks. On the other hand, the mentioned countries are reliant on the strategic imported commodities such as food and medicine. These factors lead to the more economic vulnerability among these countries especially I.R. Iran. The notification of the general policies of the resistive economy by Iran’s supreme leader in 2010 shows that this subject is of great importance. Therefore, the study of the economy of Iran and its place in the region is the first step in determining the economic indicators from economic vulnerability and resilience viewpoints. This paper tries to answer two basic questions: first, what economic conditions do OPEC countries, including Iran, experience based on the economic vulnerability and resilience? Second, what relationships are there among gross domestic product, economic vulnerability index and economic resilience index among the selected countries? To answer these questions, we compute vulnerability and resilience indexes for the selected OPEC countries during the 2002 - 2013. The findings show that Algeria, Ecuador, Iran, Nigeria and Venezuela are in the “prodigal son” position but they have the potential to increase the economic resilience during the next years. Kuwait stands at the best status, and United Arab Emirates (UAE) gets the self-reliant place. In addition, the economic vulnerability and economic resilience have indirect and direct relation with the gross domestic product, respectively; and the effect of economic resilience index on GDP is high in the sample countries.