By: Prof. Khalid Wasif Al-Wazani
Jordan Daily – A new economic cycle is emerging in the global economy- one that began with the pause in interest-rate hikes, followed by gradual cuts, and now anticipates a broader and more deliberate descent. For nearly four decades, interest rates soared, tightening the grip of monetary policy while navigating financial, monetary, and trade-related turbulence.
Yet the path toward a “soft landing” now demands a different kind of navigation. Against this backdrop, an essential question arises for the Arab region: What awaits Arab economies in the face of this global monetary shift? And can the region seize the moment, attracting investment, generating returns, and creating jobs, rather than slipping into the recessionary risks anticipated by international institutions toward the end of this decade?
It is clear that the Arab economic landscape is no longer homogeneous. Divergence today is not in the structure of production itself, but in resilience, agility, foresight, and adaptive capacity. Some economies, most notably the United Arab Emirates and Saudi Arabia, have advanced into a new league: diversified, globally connected, dynamic, and increasingly insulated from oil as a dominant source of revenue.
Other countries, such as Qatar, Oman, Bahrain, and Morocco, are transitioning from narrow resource-dependent models toward more open, globally integrated economic frameworks. Meanwhile, a third group of economies possesses the potential to compete and attract investment, yet continues to struggle against bureaucratic rigidity, technocratic insularity, and fragmented decision-making, all of which hinder their ability to translate opportunity into momentum.
The stabilization of global interest rates marks the earliest sign of a new economic cycle- one that may bring prosperity to agile, emerging economies such as China, India, and eventually post-war Russia, in addition to several promising Arab economies. At the same time, it may generate speculative waves in currencies, metals, and sectors long accustomed to cyclical inflation- particularly real estate and financial markets.
In major economies, the decision to cut interest rates is not a technical adjustment. It signals that markets have reached their tolerance limit for high borrowing costs. Growth in the US and Europe has slowed, household purchasing power has weakened, and public debt, servicing burdens have soared. Tight monetary policy has become an economic drag, while inflation has eased sufficiently to justify pausing further increases.
Yet this is not the beginning of a global recovery. Rather, it marks a period of strategic waiting, a pause during which central banks observe the delayed effects of prior tightening before taking new steps. This raises the risk of a mild recession in advanced economies, or a deeper one should global trade weaken or energy demand fall.
For forward-leaning Arab economies, the upcoming phase presents both risk and opportunity. The challenge is to convert this moment into a platform for genuine investment, in productive sectors, in economic flexibility, and in dismantling old bureaucratic constraints.
In a world entering a new economic era, the Arab region will encounter major opportunities, but only for those prepared to act. For others, opportunities will fade as long as governance systems remain unchanged. Ultimately, the distinction will be clear: nations that create opportunities, not wait for them, will be the ones capable of breaking free from bureaucracy and outdated economic thinking.
Khalid Al Wazani is Professor of Economics & Public policy at Mohammed Bin Rashid School of Government (MBRSG), he holds over 33 years of active participation in academic, public service, government, and private sector positions. He can be reach at khwazani@gmail.com .
