Like no other region, energy resources have shaped the Arab world and its modern-day development trajectory. Endowed with some of the world’s most important oil and natural gas reserves, countries in the Arab world have over the past four decades produced and exported more oil than those of any other region, and hold reserves sufficient to supply world energy markets for more than another hundred years at current rates of production.

Its energy wealth has benefited the Arab world, despite significant differences across the region alongside differing national resources, and their management across governments. Significant challenges also derive from the Arab energyled development model, particularly patterns of domestic energy consumption, rising demand for energy across the region, and rising domestic investment needs.

This paper attempts to provide a very brief overview of the role energy has played in driving economic development in the Arab world, its effects on development choices, and the challenges faced by the resultant development model. It does so by looking at four different aspects of energy-led development: 1) the effect of energy on regional Arab economic growth; 2) the inter-linkages between energy and Arab economic structures; 3) the implications of energy for intra-regional integration; and 4) evolving challenges from this development model.

The Arab Human Development Report Research Paper Series is a medium for sharing recent research commissioned to inform the Arab Human Development Report, and further research in the field of human development. The AHDR Research Paper Series is a quick-disseminating, informal publication whose titles could subsequently be revised for publication as articles in professional journals or chapters in books. The authors include leading academics and practitioners from the Arab countries and around the world. The findings, interpretations and conclusions are strictly those of the authors and do not necessarily represent the views of UNDP or United Nations Member States. The present paper was authored by Bassam Fattouh and Laura El-Katiri.