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    Middle Eastern Boom

    Economic expansion taking place in former "economic backwaters"

    Although explosions are what one thinks in terms of the Middle East and North Africa (MENA), the region is seeing an economic expansion that is giving new vitality to the region, The Wall Street Journal reported on July 19.

    Inflows of foreign direction investment in MENA has quadrupled over the past six years from less than $5 billion to nearly $20 billion. That number doubles when including Turkey, a Muslim country that straddles the divide between Middle East and Europe. (Isreal is counted separately, but it too is experiencing rapid growth.)

    Overall the economies in that region are growing at more than 5% a year, which beats most developed countries (though not as fast as China's 8% growth). Although oil is still the big story, oil-producing countries brought in $1.5 trillion in revenue between 2002 and 2006, those economies are looking to outside investors to diversify. Leading the charge are places like Dubai and Abu Dhabi.

    The paper notes: "The real test of the Middle East's unprecedented investment boom will be whether it creates jobs--and with them the sort of budding middle class that is driving the dynamism of China and India."

    Demographically speaking, half the 300 million people in the region are under 20 years old, and employing them will be essential not only to economic prosperity but also security, because poverty and violence go hand-in-hand. So much remains to be seen if this growth can continue, and what ultimate effect it may have. GEO

    Building a Middle

    Africa looks to increase its bourgeois factor

    The function of a city, it has been said, is to create a middle class. Cities in sub-Saharan Africa are trying to do just that, reports The Wall Street Journal on July 17, by using U.S. style mortgages in a process that would make Hernando de Soto proud. The mortgages will enable the middle class to do something they've rarely been able to before--build and own a home.

    In Lusaka, Zambia, for instance, a developer is building a 3,700-house community to test the market. Some investment groups are creating dedicated funds to solely invest in Africa, where it is believed there is pent-up demand by a hidden middle class.

    The WSJ articles cites World Bank estimates that the number of of middle class will rise from 12.8 million (in 2000) to 43 million (in 2030). Most will be in South Africa, but many will be in Zambia, Nigeria, Kenya, and Ghana.

    Normal mortgage needs to be adjusted to the local environment. In Zambia, where AIDS has reduced average life span to 38, mortgages must be paid off before a person reaches 55. GEO


    Fastest Growing Cities and States

    Forbes.com released its annual ranking of the fastest growing suburbs. The main story is housing affordability. Cities that are booming are geographically close to economic centers, but far away in price.

    In the Los Angeles metro, San Bernadino and Riverside counties boasts home prices 30% lower than L.A. County, but with comparable income levels. Other metro regions with large growth rates are Sacramento, Dallas, Phoenix, Las Vegas, and Atlanta. Overall Texas had 20 of the top 100 fastest growing cities, 12 of them suburbs of Dallas.

    Speaking of states, last week Forbes released its top states for business. Virginia came in at #1, but Washington state saw most improvement. Texas was the largest state to make into the top 10, ranking 4th. GEO

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