The last financial crisis 2007-2009 Research Paper

The last financial crisis 2007-2009 - Research Paper Example The economic crisis was associated with great losses of financial wealth, economic output, increased government interventions, psychological consequences among other significant costs. This paper will assess the extent to which the Qatar and other countries in the Gulf Cooperation Council were affected by the financial crisis. Impact of the Financial Crisis of 2007-2009 on the Gulf Area Introduction This paper aims at studying the impact of the global financial crisis of 2007-2009 on the countries in the Gulf Cooperation Council (GCC), or the Gulf Area. The Gulf Area is an economic and political Union of Arab states around the Persian Gulf including Kuwait, Bahrain, Saudi Arabia, Oman, The United Arab emirates and Qatar. The cooperation was established in 1981 to foster unity and trade and cooperation among the member states. The Gulf Area consists of the fastest growing economies mostly due to the revenues gotten from huge deposits of natural resources such as oil and natural gas. T his paper will largely be based on the impact of the global financial crisis on the economy of Qatar with some examples drawn from the other countries in the Gulf area. Petroleum is the backbone of Qatar’s economy and accounts for about 70% of the countries revenues (Read, 2009). The GDP of Qatar ranks among the robust in the world and it has become a major player in the global economy from the region. This essay will try at analyze the impact of the global financial crisis on the economy of Qatar as well as its reaction to the crisis as well as how the other countries in the Gulf were affected. The main objective of this essay will be to answer the question as to how the last financial crisis (2007-2009) affected the economic situation in the Gulf area. The economic crisis of 2007-2009 was associated with great losses of financial wealth, economic output, increased government interventions, psychological consequences among other significant costs (Read, 2009). Although the f inancial crisis began in the Western countries, its impact was felt across the world, with most economies feeling the impact. The crisis is deemed by most economists as the worst financial crisis ever since the Great Depression that befell in the 1930s. The 2007-2009 global financial crisis resulted in downturns in major stock markets across the world, and threatening the collapse of some of the largest financial institutions in major economies around the globe (Read, 2009). This resulted in government interventions to bail out banks and other financial institutions as well as big companies in order to protect the economy from collapsing. Some of the results of the financial crisis across the globe included massive prolonged unemployment, high interest rates, and housing crisis among others. The crisis also led to a reduction in global economic activities between 2007 and 2012 and played a major role in the debt Crisis in the European countries (Fried, 2012). The global financial cr isis has been attributed to various causes, mostly from the West. According to the U.S. Senate’s Levin-Coburn report, the financial crisis occurred as a result of complex, high risk financial products and cases of undisclosed conflicts of interests among different parties, as well as the inadequacy of proper regulators. Most critics have pointed out to the repeal of the Glass-Steagall Act (1999) of the US as the origin of the financial