Middle East at a Crossroads: Echoes of the Bronze Age and the Choice Between Collapse and Resilience

Three millennia ago, around 1177 BC, a highly interconnected world experienced a swift decline within a single generation. Ancient civilizations including Egypt, the Hittites, Babylon, Mycenaean Greece, Cyprus, and the prominent port city of Ugarit in modern-day northern Syria, had established a sophisticated network of trade and diplomacy, with rulers addressing each other as "brothers." This era saw the flourishing exchange of copper, tin, grain, and ideas across the eastern Mediterranean. However, this interconnectedness was shattered by a confluence of factors: drought, mass migrations, earthquakes, warfare, and the fragility of existing institutions. Within a few decades, major cities were razed, and in Greece, the very art of writing was lost. While our current global situation does not mirror the catastrophic proportions of the Bronze Age collapse, it is undeniably fragmenting. The World Trade Organisation reports that new tariffs and trade restrictions now impact 11 percent of global imports, a level not seen in over 15 years. For the 57 member states of the Organisation of Islamic Co-operation (OIC) and emerging markets globally, the distinction between outright collapse and mere fragmentation carries immense weight.

Fragmentation is not an inevitable outcome but rather a critical test of preparedness, leadership, and trust. The Bronze Age offers insights into what transpires when interconnected systems unravel and highlights the factors that differentiate those who succumb from those who manage to rebuild. A key lesson from that period is that no single event was the sole cause of collapse; rather, multiple stresses converged and amplified one another. The parallels to our present day are striking: the tin and copper of the Bronze Age find echoes in today's semiconductors, rare earths, and energy resources. The droughts of antiquity are mirrored by contemporary climate stress and food insecurity. The great power rivalries of the past are reflected in the current US-China competition and the ongoing conflicts in Ukraine and the Middle East. Our modern "just-in-time" supply chains and high levels of debt bear resemblance to the brittle economies of the Bronze Age palaces.

Emerging economies, having been significant beneficiaries of globalization, are now particularly vulnerable to its reversal. Many OIC economies rely heavily on one or two export commodities. A substantial portion of the Middle East and North Africa region imports a significant amount of its food, and the Gulf countries import most of their food supplies. Debt, trade, and financial reserves remain largely denominated in US dollars. Furthermore, many nations are situated in regions already grappling with heat, drought, and water scarcity – the same environmental pressures that contributed to the Bronze Age collapse. Compounding these challenges, our populations are predominantly young, which can be a great asset when employment opportunities are abundant but a source of significant frustration when they are not.

Fragmentation manifests through multiple channels simultaneously. Disruptions in the Red Sea have demonstrated how swiftly a single vital trade corridor can escalate costs for nations from Egypt to the Gulf. The conflict in Ukraine has exposed the vulnerability of North Africa and the Middle East to disruptions in a single major grain-producing region. Rising global interest rates have compelled several OIC members to seek assistance from the International Monetary Fund. Moreover, access to advanced technologies like chips, AI models, and cloud computing is increasingly influenced by geopolitical considerations.

However, the OIC is not a monolithic entity, and its member states will experience divergent paths, much like the kingdoms of the Bronze Age. Egypt, though diminished, managed to survive. Ugarit, despite its wealth and sophistication, vanished, its final communications detailing approaching enemy ships and a lack of incoming aid. In contrast, Phoenicia, a smaller and more adaptable neighbor, emerged from the same ashes to facilitate trade and spread its alphabet across the Mediterranean. The Phoenicians, while not possessing the largest armies, excelled through their maritime capabilities, trustworthiness, and ability to engage in trade with all parties.

The Middle East stands at a critical juncture, facing a choice between becoming a modern-day Ugarit or Phoenicia. This decision rests with us. There are valid grounds for optimism. Few groups of nations maintain active relationships with a diverse range of global powers, including the US, China, Europe, India, Russia, and Africa, simultaneously. The UAE and its neighboring countries exemplify this capability. In an increasingly bloc-oriented world, a trusted connector becomes more, not less, valuable. Manufacturers seeking to diversify their supply chains are already directing their attention towards regions like the UAE, Malaysia, Indonesia, Turkey, and Morocco. The Gulf's ports, airports, and free zones serve as crucial links between Asia, Africa, and Europe. Furthermore, capital from the Gulf and Southeast Asia can play a vital role in financing development across the Muslim world, especially as Western capital becomes more cautious.

The ongoing energy transition also presents parallels to the Bronze Age. The shift from bronze, which relied on distant tin sources, to iron, a more locally abundant material, marked a significant change. For Gulf energy producers, the transition away from hydrocarbons represents both a long-term revenue challenge and a generational opportunity. For OIC members in Africa and Central Asia with abundant mineral resources, it offers a chance to process these materials domestically rather than exporting raw ore. For energy-importing nations such as Pakistan, Bangladesh, and Egypt, the adoption of renewable energy sources provides a means to conserve scarce foreign exchange reserves.

What steps should be taken? I propose five key priorities for policymakers, investors, and business leaders. Firstly, deliberate diversification is essential: across exports, suppliers, markets, and currencies. No single partner should represent a single point of failure. Secondly, it is crucial to build strategic reserves of food, water, energy, and foreign exchange to ensure preparedness for future challenges. Thirdly, planning for combined shocks is paramount; stress-testing against simultaneous occurrences of drought, conflict, price surges, and capital flight is necessary. Fourthly, deepening intra-OIC trade and investment is vital, as current levels remain modest relative to the collective economic size of the member states. Islamic finance, with its foundation in real assets and shared risk, offers a natural framework for this. Sukuk can fund infrastructure and food security initiatives, while Takaful (Sharia-compliant insurance) can protect farmers against climate-related shocks. Waqf (Islamic charitable endowments) can be revitalized to support education and healthcare facilities. Fifthly, investing in human capital and maintaining trust with all partners is critical. Education, skills development, and healthcare for our young populations are the most effective forms of insurance against instability. Trust itself acts as crucial infrastructure; the Bronze Age network endured as long as kings maintained faith with one another. The historian Ibn Khaldun emphasized that societies thrive through 'asabiyyah,' a shared sense of purpose and solidarity, and decline when leaders become detached. The fall of the Bronze Age palaces was partly due to the erosion of this bond. The values of trust and justice are not mere abstractions; they are the ultimate defense when all other systems are under strain. The Bronze Age kings could not foresee the coming challenges, but we can. For a significant portion of the Gulf, these are still times of relative prosperity. This presents both our greatest advantage and our most profound responsibility. Dato Paduka Iqbal Khan, the founding chief executive of Fajr Capital, previously served as the founding chief executive of HSBC Amanah.