Economies Of East Research Articles

Evaluating AIS implementation to improve accounting information quality: the prospect in Jordanian family SMEs in the post-Covid-19 age

PurposeAs organisations rely more on systems to protect their accounting data, it is critical to investigate whether cutting-edge “Accounting Information Systems (AIS)” technologies increase “Accounting Information Quality (AIQ)” in post-Covid-19 era.Design/methodology/approachThe current study examined how Covid-19 modified the expected links between AIS implementation and AIQ factors. To make the “structural model”, a “web-based survey” was used. A “Multi-group Analysis” (MGA) with “AMOS.26” was employed to test the regulating effect. To look at their regression values, the 412 participants from “Family Small- and Medium-sized Enterprises FSMEs” in Jordan who took part in the MGA were split into two groups: those who had a high experience of Covid-19 impact (N = 143) and those who had a low experience of Covid-19 impact (N = 269). The study of 412 completed surveys shows that MGA uses a modified t-test to determine the significant difference between regression coefficients.FindingsThe results of the moderation effect confirm that Covid-19 has a substantial effect on AIS adoption and AIQ. All hypotheses about how AIS implementation affects AIQ in post-Covid-19 era were approved. The study finds that adopting AIS is critical for enterprises to maintain successful operations and efficiency.Practical implicationsThis model may assist businesses in comprehending the relationship between AIS and AIQ, how it affects it in the current technological adoption phase under extremely unpredictable economic conditions and what characteristics support its widespread usage. This research offered the theoretical underpinning for examining AIS’s ability to improve AIQ among Jordanian family firms. The results can also be applied to other Middle Eastern countries and AIQ, how it affects this relationship during this period of technological adoption under extraordinarily unpredictable economic conditions and what factors support its widespread use. Practitioners and scholars must recognise how AIS can develop organisational values and impacts as the AIS environment grows. This study recommends a holistic AIS-implementation methodology and evaluates organisational implications to address this empirical challenge.Originality/valueThis study investigates whether adopting AIS results in significantly higher AIQ in the post-Covid-19 era. To the best of the author’s knowledge, there have been a few attempts to investigate how AIS influences data quality. Still, there is little evidence of how this relationship has evolved in the aftermath of the Covid-19 tragedy. As a result, much work remains to be done, particularly in analytical decision-making culture, which is critical to the development of the growing economies of the Middle East and Jordan. To address this knowledge gap, the Covid-19 and AIQ criteria were incorporated into the model utilised in this study. This research adds to existing knowledge and may be valuable in areas with low AIS framework frequency.

Unlocking growth: Investigating asymmetry in the financial inclusion-growth nexus in financially inclusive middle east economies

Financial inclusion is a crucial element of financial development that transmits cheap financial services to provide advantages to entire segments of society and stimulates economic growth. Our investigation evaluates the asymmetric financial inclusion-economic growth nexus in the top 10 financially inclusive Middle East nations (Israel, Oman, Iran, Qatar, Turkey, Saudi Arabia, Bahrain, Egypt, United Arab Emirates, and Kuwait). Earlier studies adopted panel data tools, which yielded typical outcomes on the association between financial inclusion and economic growth despite few economies did not indicate such a link individually. Conversely, the present work adopts Quantile-on-Quantile approach which can scrutinize time-series dependency among nations exclusively to give international, though country-specific, comprehension of the variables’ correlation. The outcomes show that financial inclusion boosts economic growth in our selected economies at numerous quantiles of data distribution. In addition, the results depict that the degree of asymmetry in the financial inclusion-economic growth nexus diverges by the nation. The outcomes highlight the critical need for governments and policymakers to prioritize financial inclusion and economic growth across various levels by emphasizing a strategic and comprehensive approach to ensure effective and sustainable growth.

Macroeconomic factors influencing the Saudi balance of payments’ current account dynamics from 1995 to 2019

Reliable development reports highlight persistent deficits in developing countries’ balance of payments since the 1980s and 1990s, attributed to monetary turmoil and ambitious development plans. Saudi Arabia faces similar challenges as the leading economy in the Middle East and North Africa region.The objective of this study is to pinpoint the macroeconomic determinants influencing Saudi Arabia’s current account balance from 1995 to 2019. This aligns with the objectives of Saudi Vision 2030, which emphasizes economic diversification and sustainability.Eleven macroeconomic determinants were subjected to the Principal Component Analysis model and the Autoregressive Distributed Lag model for analysis. Five determinants, such as budget balance, goods exports, per capita gross domestic product, gross domestic product growth, and domestic liquidity growth, were identified as significant contributors to the current account balance. The Autoregressive Distributed Lag model revealed that goods exports, domestic liquidity growth, gross domestic product growth, and per capita gross domestic product exert a statistically significant positive impact on the current account balance in the long term.The research findings highlight the significance of goods exports, economic growth, and domestic liquidity in shaping Saudi Arabia’s current account balance, emphasizing the need for diversification away from oil dependence to mitigate economic vulnerabilities. The study underscores the implications for Saudi Vision 2030, stressing strategic policy interventions to foster non-oil exports and stimulate economic growth. Additionally, the analysis identifies temporal variations in export dynamics, emphasizing the importance of policy continuity and adaptability for economic resilience. AcknowledgmentsThe authors gratefully acknowledge financial support from The Deanship of Scientific Research, King Faisal University (KFU) in Saudi Arabia. The present work was done under Project Number (CHAIR 138).

China's Growing Interest in the Middle East: Implications for US Role

This paper aims to examine the shift of power from the US to China in the Middle East without paying attention to some of the most vital economic factors such as energy supply, infrastructural investments and trade. Using qualitative research, the study employs secondary research that involves surveying of peer academic journals, government data, and trade statistics. Also, it involves a comparative analysis of the economic factors and strategic policy comparison. According to the findings of the study, the oil imports and investments of China today are remapping the Middle East economy and poised to dethrone the American dominance in the region. The Chinese model is focused on economic relations and exchange and does not meddle in the domestic affairs of its counterparts, which is why many Middle Eastern countries looking for diversification and reliability are interested in this approach. Such a shift is capable of leading to new alignments of power on the international and regional levels or even the fall of American hegemony. The study also reveals the fact that the US must alter its strategy in order for it to be effective; the plan that the study recommends includes diplomacy and aid and also a cooperative approach, some economic incentives and a collaborative strategy. Some of the findings that have been established across the Middle Eastern countries include the need to be able to manage relations with superpowers and defend national interests as crucial for sustainable development. The implication for international ties, therefore, underscores a shift in the nature of power relations within the global system, hence the need to study further the social-political impact of Chinese financial engagement as well as the changing nature of the uneasy relationship between the US and China.

Geopolitical risk and banking performance: evidence from emerging economies

PurposeThis study delves into the critical issue of banks' stability and profitability, which are crucial elements for fostering economic growth and preserving depositor confidence. Specifically, we scrutinize the impact of geopolitical risks on the profitability and solvency of banks operating in emerging economies across the Middle East and Africa.Design/methodology/approachEmploying a two-step Generalized Method of Moments (GMM) approach, we analyze a comprehensive dataset comprising 125 banks spanning 13 emerging economies in the Middle East and Africa, covering the period from 2003 to 2019.FindingsOur study reveals a significant sensitivity of Middle Eastern banks to geopolitical risks, wherein effective anticipation or adaptation to these risks positively influences bank performance. Conversely, the impact of geopolitical risk on African banking profitability appears inconclusive and statistically insignificant. These nuanced findings underscore the complex interplay between geopolitical dynamics and financial performance in diverse regional contexts, with implications for policymakers and industry stakeholders.Practical implicationsOur findings underscore the need for nuanced policy responses and risk management strategies tailored to the unique challenges posed by geopolitical dynamics in emerging markets. Furthermore, they highlight the importance of continued research efforts to deepen our understanding of these complex interactions and inform more effective decision-making in the financial sector.Originality/valueAmidst growing recognition of the importance of geopolitical risks in financial markets, empirical studies exploring their precise impact on bank performance remain scarce. This study fills this gap by offering a pioneering investigation into the influence of geopolitical risks on bank profitability and solvency, using advanced econometric techniques and a substantial, diverse sample of banks in emerging economies across the Middle East and Africa.

Renewable Energy Transition, Trade Openness, and CO2 Emissions Nexus in the Middle East

Reducing pollutant emissions during the global energy transition from fossil fuels to renewables is a significant endeavor. Nonetheless, a significant portion of the Middle East (ME) economy continues to be based mostly on the extraction and use of fossil fuels, posing a threat to the environment in the area. Thus, the current study examined the impact of income growth, trade openness (TO), and the Renewable Energy Transition (RET) on CO2 emissions in 12 Middle East nations, from 2000 to 2019. The findings demonstrated that the ME area contains the Environmental Kuznets Curve (EKC). RET decreased emissions of CO2. Therefore, the transition to renewable energy reduced emissions in this ME region. On the other hand, TO enhances CO2 emissions. For the ME region, TO is concerned with the environment. The research recommends a quick RET to safeguard the environment from CO2 emissions.

Management practices and partial government ownership in the Middle East and North Africa

AbstractA wealth of evidence has shown the positive effects of better management practices on firms. More recent evidence has highlighted that ownership matters for several developing and advanced economies. However, this relationship has not been studied extensively for economies in the Middle East and North Africa (MENA), a region where the presence of the government in the productive sphere looms large. This study addresses a gap in the literature by exploring how partial government ownership can influence management practices of medium and large formal firms in the MENA. Using two waves of Enterprise Surveys undertaken in 2013 and 2019/2020, the evidence points at a negative relationship between partial government ownership and management practices in the developing MENA region. The findings pass several robustness checks.

Spillover effects of volatility between the Chinese stock market and selected emerging economies in the middle east: A conditional correlation analysis with portfolio optimization perspective

In recent years, the rapid transmission of information and interconnectedness of global financial markets have amplified the convergence and influence among them. Consequently, the occurrence of spillover effects in one market can significantly impact other markets. Accurately identifying and understanding these spillover effects is crucial for effectively managing and controlling market fluctuations. This research aims to measure and analyze the spillover effects between China's stock market and selected emerging economies in the Middle East, with a focus on exploring diversification opportunities. The analysis encompasses three distinct time periods, including the overall period from May 1, 2005, to May 31, 2023. The sub-periods consist of the first sub-period from May 1, 2005, to October 31, 2009, and the second sub-period from December 1, 2010, to May 31, 2023. Multivariate Generalized Heterogeneous Autoregression (MGARCH) is employed in this study to examine the spillover effects between China's economy and the emerging economies under consideration. The Granger causality analysis reveals a unidirectional causality running from the Chinese stock market to Jordan, as well as from the UAE to China throughout the entire observation period. However, no spillover effects are found between China and Saudi Arabia in either direction during any of the periods. Notably, a two-way causality is detected between the Chinese and UAE markets in the second sub-period. Furthermore, MGARCH results indicate no spillover effects from China to the emerging economies during the overall period, first sub-period, or second sub-period. The findings of this research offer valuable insights for investment portfolio managers in the Chinese economy, who may consider the examined emerging economies as potential destinations for risk diversification.

Who should select the external auditor in emerging economies? Role of institutional ownership and family ownership

Aim/purpose – This study reports the demand for Big 4 audits among institutional and family owners, the two dominant ownerships in the GCC countries. We conducted this in-depth study to gain an understanding of the type of firms, family-owned or institu- tional-owned firms that lead to choosing audit firms. Design/methodology/approach – This study employed a quantitative cross-country study by selecting a sample based on secondary data extracted from the Capital IQ data- -set from a panel of 1827 non-financial firms listed on the stock exchanges of the Gulf Cooperation Council (GCC) countries from 2010 to 2018. The hypothesized effects of institutional ownership (IO) and family ownership (FO) on the selection of external auditors in these countries were examined using logit, probit, and heteroskedastic probit analysis. Findings – The study finds that institutional investors play a crucial role in influencing firms’ choice of auditors in the GCC. Family-owned firms tend to hire non-Big 4 firms when the owners actively monitor the firms’ financial transactions. In addition, the study finds that both domestic and foreign institutional investors have a significant positive effect on auditor selection, with domestic institutional investors having priority. These findings support the efforts of market authorities in the GCC to highlight the critical role of IO over FO in improving audit quality. Research implications/limitations – The results are highly relevant for shareholders, executives, institutional investors, regulators, and academics. They help them improve the growth of capital and audit markets by developing best practices, thereby helping achieve an optimal framework for auditor choice that matches higher audit quality. This study focuses on only two types of ownership structures (institution and family) despite the many options because of the extensive debates and discussions on the association between the studied ownership types and auditor choice. Originality/value/contribution – Study highlighted the role of institutional investors in GCC countries as one of the most attractive emerging economies in the Middle East. Since no research has been conducted on the role of institutional and family investors in selecting external auditors in GCC countries, this study has made a significant contribu- tion to the accounting and auditing literature. It mitigates the gap in the literature on emerging markets. The findings can provide policymakers with guidelines for including institutional investors and FO in GCC countries to ensure high-quality audits. Keywords: institutional ownership (IO), family ownership (FO), auditor choice, Gulf Cooperation Council, emerging economies. JEL Classification: G23, G32, D10, M42.

Knowledge sharing in the era of Covid-19: a bibliometric analysis using scopus and web-of-science (WoS)

Purpose This study aims to conduct a bibliometric analysis of knowledge sharing during COVID-19 and highlight prominent contributors, diverse trends and themes followed with provisions of future research avenues. Design/methodology/approach The study through scientific procedures and rationales for systematic literature reviews framework analyses 148 peer-reviewed journal publications and conference proceedings indexed in Scopus and WoS databases from 2020 to 2022. It uses general statistics and diverse bibliometric techniques, including co-occurrence analysis for trend and cluster identification in the literature. Findings The findings reveal an exponential annual growth rate of 150% in the domain, highlighting the global research focus. With regards to domain contribution, the Journal of Knowledge Management and China leads with ten publications in their respective categories. The co-occurrence analysis further highlights four diverse clusters in the domain, which are further discussed in detail. The study highlights significant contributions from developed economies, thus providing scope for future research from developing or transitioning economies in the Middle East, Central Asia or Africa. The study concludes by presenting the elementary role of knowledge sharing in response to external crises. Originality/value The interest in the knowledge sharing domain has grown exponentially during the COVID-19 pandemic. This research is the first bibliometric analysis with comprehensive and rigorous analytic techniques to unearth critical developments and insights for a holistic understanding.

Smart Cities Adoption in Saudi Arabia: A Comprehensive Review and Future Drivers

This theoretical paper aims to provide an extensive overview of the adoption of smart cities in Saudi Arabia. With rapid urbanization and the increasing need for sustainable and efficient urban development, smart city initiatives have gained significant attention globally. Saudi Arabia, being one of the fastest-growing economies in the Middle East, has recognized the potential of smart cities in enhancing the quality of life, optimizing resource management, and promoting economic growth. Through an in-depth analysis of existing literature, this paper explores the key drivers, challenges, and opportunities associated with the adoption of smart cities in Saudi Arabia. It also discusses the roles of various stakeholders and presents a comprehensive roadmap for the successful implementation of smart city initiatives in the country.

Electrical Power Generation Forecasting from Renewable Energy Systems Using Artificial Intelligence Techniques

Renewable energy (RE) sources, such as wind, geothermal, bioenergy, and solar, have gained interest in developed regions. The rapid expansion of the economies in the Middle East requires massive increases in electricity production capacity, and currently fossil fuel reserves meet most of the power station demand. There is a considerable measure of unpredictability surrounding the locations of the concerned regions where RE can be used to generate electricity. This makes forecasting difficult for the investor to estimate future electricity production that could be generated in each area over the course of a specific period. Energy production forecasting with complex time-series data is a challenge. However, artificial neural networks (ANNs) are well suited for handling nonlinearity effectively. This research aims to investigate the various ANN models capable of providing reliable predictions for sustainable sources of power such as wind and solar. In addition to the ANN models, a state-of-the-art ensemble learning approach is used to improve the accuracy of predictions further. The proposed strategies can forecast RE generation accurately over short and long time frames, relying on historical data for precise predictions. This work proposes a new hybrid ensemble framework that strategically combines multiple complementary machine learning (ML) models to improve RE forecasting accuracy. The ensemble learning (EL) methodology outperforms long short-term memory (LSTM), light gradient boosting machine (LightGBM), and sequenced-GRU in predicting wind power (MAE: 0.782, MAPE: 0.702, RMSE: 0.833) and solar power (MAE: 1.082, MAPE: 0.921, RMSE: 1.055). It achieved an impressive R2 value of 0.9821, indicating its superior accuracy.

Real but unrealised: object transformations and political economy in East and southern Africa, AD 750–1250

Archaeologists of East and southern Africa have long been attracted to large urban centres, such as those on the Swahili coast, and to the circulation of imported goods. Here, the authors aim to refocus attention on the diversity of objects that were produced and transformed by the inland societies of East and southern Africa during the Middle Iron Age (AD 750–1250). Recognition of the remaking, bundling and repurposing of small, portable objects emphasises the innovative practices that helped to bestow power on their makers. A socially embedded approach to studying objects and practices re-presents African communities as innovators and active transformers of non-local objects, and facilitates new narratives about the political economy of Africa at that time.

Gold prices, cultural factors, and Covid-19 pandemic: An international analysis

Using data from 24 economies from 2010 to 2022, we demonstrated the significant effect of national culture, a missing factor, on physical, jewellery, and gold bar and coin demand. We also determined that the COVID-19 pandemic variable has a significantly positive influence on demand for gold in Confucian economies, jewellery in South Asian and Middle East economies, and bar and coin in Confucian economies. One key implication is that although the total global gold consumption tends to decline during economic turmoil, individuals in these countries tend to accumulate more gold because gold is considered as a safe haven asset during the Covid-19 pandemic. Our findings also provide useful implications for the development of the gold markets.

Readiness of the health system against COVID-19 and its impact on the economy and foreign trade in MENA

Objectives This study aims to investigate the readiness and resilience of the health system against COVID-19 and the impact of the pandemic on the economy and foreign trade in the Middle East and North Africa (MENA) region with Türkiye. Methods By descriptive analysis, the readiness and resilience of the health system and the impact of the pandemic on the economy and foreign trade in the MENA region with Türkiye were evaluated. The normality of the indicators was checked by Jarque-Bera (JB), Shapiro-Wilk (SW) and Kolmogorov-Smirnov (KS) tests. The countries were ranked by the min-max standardization method. Results As of the end of July 2021, the number of COVID-19-related cases was more than 12.4 million in MENA and 5.7 million in Türkiye and deaths were more than 212 thousand in MENA and 51 thousand in Türkiye. After the analysis in order, it is found that Israel, Saudi Arabia, United Arab Emirates, Türkiye and Qatar as the most resilient countries and Yemen, Syria, Palestine, Iraq and Libya as the most vulnerable countries against the pandemic. Conclusion The pandemic has affected the life and the economies in the region negatively and the health system for some of them was not sufficient to fight it.

Geothermal Power Corridor- connecting the Middle East Countries

The Middle East economy and life depend on imports, be it food, water, or energy, despite each country in the region having enormous energy resources to exploit and reduce dependency on countries outside the region and develop a socioeconomic model of regional cooperation and synergy. An estimated 371 TWh of electricity available from geothermal energy resources can be utilized by these countries to support basic needs and be free from food-energy-water imports by sharing their energy resources. The total amount of CO2 emissions from these countries is currently 945 x 106 kg, so these countries can further earn about 92 million euros from carbon savings, by using geothermal energy along this corridor. This amount can be utilized for augmenting the energy supply from geothermal sources. In this work, the available geothermal resources are evaluated, and suggestions are made how this energy can be best utilized for peaceful existence and cooperation in the region.

Toward a green economy: The nexus between economic and environmental factors in MENA countries, ARDL bounds approach

AbstractWith the transition of the global economy toward a green economy, it is important to analyze the elements that can either support or impede this transformation. Therefore, in this study, we aimed to evaluate the potential of the green economy in the Middle East and North Africa (MENA) countries by analyzing the correlation between economic and environmental factors. The objective of this study is to explore the potential of the green economy in MENA countries by analyzing key factors such as access to clean fuel, GDP, and CO2 emissions. The study aims to distinguish between long‐ and short‐term effects, assess the presence of a long‐run relationship or co‐integration between the parameter estimates, and evaluate the progress of MENA countries toward a green economy based on the impact of economic, and environmental factors. Using quarterly and seasonally adjusted data from 2000 to 2018, the auto‐regressive distributed lag (ARDL) technique was employed to examine the co‐integration of the factors in the long and short terms. Multiple cointegration techniques were also used to determine the feasibility of a green economy by analyzing the relationship between access to clean fuel for technology and cooking, GDP, and CO2 emissions. The study's findings indicate a clear long‐ and short‐term relationship between the analyzed factors, as confirmed by the error correction model (ECM) which suggests that the variables are cointegrated and potentially relevant. Additionally, the result of the autoregressive distributed lag bound test shows that the green economy variables, GDP, CO2 emissions, and access to clean fuel, are cointegrated in the long‐term.

Ideology: Factors of Conflict and Failure in the Middle East

The following article discusses how Western ideology is a major factor in the occurrence of conflict and state failure in the Middle East. In this article, the author examines the perspective of ideological hegemony. The ideology destroys the political and economic system that is at the root of social inequalities, thus accelerating the outbreak of conflict in the Middle East. The author cites Syria and Libya as examples to prove the driving factors of the conflict. The author argues that the main cause of the conflict in the Middle East is the influence of Western ideology which has not been accepted by both those in power and society, which has led to divisions and even wars. Democracy is an accepted model in many countries that cannot be applied in the Middle East. The author also criticizes the failure of the implementation of democracy and the liberal economy in the Middle East.

The decade long story of gender equality and female empowerment: a case study of corporate disclosures in Saudi Arabia

PurposeThis study deviates from the predominantly feminist/critical school of thought associated with existing gender studies to apply an interpretivist approach to investigate gender-reporting practices in Saudi Arabia, an Islamic country in the Gulf region and one of the fast-moving emerging economies both in the Middle East and globally. The purpose of this study is to investigate the extent of reporting on gender and the drivers behind this practice using the content analysis method.Design/methodology/approachThis study contributes to the literature by adopting a rarely used three-lens conceptual framework to expand our understanding of reporting on gender in Saudi Arabia. Eleven companies were chosen based on their voluntary corporate social responsibility (CSR) disclosures in Saudi Arabia. The CSR and annual reports of selected companies were analysed using NVIVO Pro 11.FindingsThe results indicate that gender disclosures in the Saudi context are driven by legislation, location and international reporting frameworks. Although the number of disclosures increased over time, they were not adopted consistently and systematically because of their voluntary nature.Research limitations/implicationsThe first limitation is the disadvantage associated with interpretivism related to the subjective nature of the investigation and room for bias, and hence, the results cannot be generalised. The second limitation is the sample size; future investigations may increase the sample size by including other service and manufacturing sector firms to have more comprehensive insights.Practical implicationsThis study contributes to the literature by providing evidence suggesting that in Saudi Arabia, state legislation is the driving force behind reporting on gender issues. Although workplace disclosures dominate, companies are opening dialogues with other stakeholders (especially the community) by disclosing performance data, and thus emphasising their commitment to this social change.Social implicationsThis empirical contribution to the CSR literature will provide rich historical and interpretive data on the emergence of gender transformation in society, and how that is reflected in corporate reports, thus, contributing to the understanding of the purpose of voluntary disclosures.Originality/valueEmployee-related disclosures in corporate reports are very common. However, issues such as diversity and equal opportunities tend to be overlooked. This study explores gender equality and female empowerment disclosures and practices in the emerging market of Saudi Arabia while focusing on whether the social, political and legal changes in Saudi Arabian society have affected these disclosures in corporate reports. There is a lack of qualitative analysis of gender disclosers globally and in emerging economies particularly.

Determinants of the formation of an inclusive economy in Middle East countries and its socio-economic consequences

Purpose. This research aims to investigate and determine the factors influencing the formation of an inclusive economy in the Middle East countries and analyze the socio-economic consequences of this process, including its impact on social development, employment levels, and poverty in the region. Methodology of research. The research is based on the scientific works of scholars in the field of inclusive economy in the Middle East. General and specialized research methods, including analysis and synthesis, induction and deduction, and graphical methods, were utilized to analyze the key components of economic development, determinants of inclusive economy, and to present the research results effectively. Findings. The research identified key determinants of inclusive economy formation in the Middle East countries and analyzed its socio-economic consequences. Effective institutions, including the legal system, political structures, and regulatory mechanisms, were found to play a vital role in shaping an inclusive economy. Countries with strong and stable institutions have a better chance of developing an inclusive economy. Education and access to quality education were identified as critical factors for ensuring economic inclusiveness. A high level of education contributes to the development of a skilled workforce and increased employment. The study emphasizes the importance of developing sectors of the economy that create a high number of jobs and involve various social groups in the production processes, such as the development of small and medium-sized businesses. Effective social policies were highlighted for reducing inequality and combating poverty, as social programs and support mechanisms can contribute to inclusive economic development. The geopolitical situation, international relations, international trade, and foreign investments also significantly influence the formation of an inclusive economy and its impact on the socio-economic development of countries. Originality. This research focuses on the study of inclusive economy in the Middle East, which is a relevant and important area of research in modern economic and political science. Many studies in this field concentrate on Western countries, while this article focuses on a region with a unique socio-cultural and economic environment. A comprehensive approach to the study of inclusive economy was applied, taking into account various factors such as institutions, education, economic sectors, social policies, and external influences. This provides a more complete understanding of how inclusiveness in the economy is formed. The research also considers the impact of geopolitical factors on the development of an inclusive economy in the studied region, which is crucial for understanding the specific challenges and opportunities. Practical value. The research findings provide a basis for developing specific recommendations for Middle East countries in forming policies for an inclusive economy. These recommendations can serve as a foundation for the development and implementation of measures aimed at increasing economic inclusiveness and improving the quality of life for the population. The research results can be used by governing bodies to make informed strategic decisions regarding economic development and social policies to enhance economic inclusiveness, identify priority tasks for forming a more inclusive economy. Taking into account geopolitical aspects in the research has a significant impact on international relations and cooperation between Middle East countries and other nations, contributing to attracting investments and entrepreneurship development in the region. This creates new opportunities for economic growth and reduces unemployment through the implementation of programs and measures aimed at reducing social inequality and poverty in Middle East countries.