“The deficits in peace, development, security, and governance long faced by the Middle East region are difficult to resolve in the short term, constraining the region’s development.” This assessment from the Chinese Academy of Social Sciences’ 2025 Report on the International Situation outlines the multiple challenges confronting the Islamic world.
Globally, the 57 member states of the Organisation of Islamic Cooperation, representing the Islamic world, possess abundant natural resources and strategic geographic locations, yet none have ascended to the ranks of modern world powers.
The reasons behind this are the result of multiple intertwined factors: internal governance deficiencies, geopolitical conflicts, a monolithic economic structure, and lagging social development. This article will systematically analyze the deep-rooted reasons why Islamic countries have failed to become world powers from various dimensions.
01 Geopolitics and Security Dilemma: The Islamic World in a Vortex of Conflict
The Middle East, as the core region of Islamic civilization, has long been caught in a vortex of geopolitical conflict. The fragility of the security environment directly constrains the development of these nations.
The security situation in the Middle East in 2025 was characterized by “hotspots intensifying, spillover accelerating, and multi-dimensional linkages.” The persistent Israeli-Palestinian conflict, intensified bloc confrontations, and the accelerated restructuring of the regional landscape are key features.
The Iran-Israel confrontation is a typical example of the regional security dilemma. In June 2025, the two countries engaged in direct military conflict. Israel launched airstrikes on targets inside Iran leveraging advanced military technology, while Iran retaliated by launching a significant number of missiles and drones.
This confrontation consumed substantial resources from both sides. Iran was forced to triple its defense budget to $46 billion, purportedly to “prepare for a ten-year war with the United States.”
The regional “Axis of Resistance” also suffered severe blows. Hamas sustained significant losses, Hezbollah in Lebanon was “severely depleted,” and the Iran-aligned Assad regime in Syria “collapsed at lightning speed,” threatening to dismantle the strategic layout against Israel that Iran had built over decades.
External interference further exacerbates the regional security dilemma. Following Donald Trump’s return to the White House, the US implemented a tougher “maximum pressure” policy against Iran. Meanwhile, the UN Security Council remained paralyzed, unable to effectively mediate regional conflicts.
02 Economic Structure and Resource Dependency: The Blessing and Curse of Oil
The economies of Islamic countries, particularly in the Middle East, are overly dependent on natural resources, especially oil and gas. This monolithic economic structure has become a bottleneck to long-term development.
In 2025, the overall Middle Eastern economy presented a landscape of “resilient growth + structural transformation” progressing in parallel. GCC countries maintained medium-to-high growth supported by fiscal stability and policy continuity, while non-GCC countries were constrained by inflation and debt pressures, resulting in a divergent economic performance.
Oil-exporting and oil-importing countries face distinctly different challenges. Oil-exporting countries, with “smooth sailing” as oil production cuts were gradually lifted, continued to increase investment in economic diversification.
Conversely, highly indebted oil-importing countries had very limited fiscal space for investments needed to spur economic growth.
To escape resource dependency, Middle Eastern countries are actively pursuing economic diversification strategies. Saudi Arabia’s “Vision 2030,” the UAE’s “Centennial 2071,” and Qatar’s “National Vision 2030” collectively outline a clear trajectory for the Middle Eastern economy’s evolution towards diversification, digitalization, and greening.
The implementation of these strategies has begun to show results. Regional non-oil industries are becoming new engines of growth, with high-value-added sectors like tourism, finance, and ICT becoming focal points for policy support.
However, fluctuations in energy prices continue to constrain the fiscal space and economic growth of these countries, with high fiscal breakeven oil prices coupled with inflation limiting policy maneuvering room.
03 Governance Systems and Institutional Capacity: The Collision of Tradition and Modernity
Islamic countries face a collision between tradition and modernity in their governance systems, with weak institutional capacity becoming a significant obstacle to development.
The case of Iran is particularly illustrative. The country faces four major internal worries: concerns over the leader’s health, political unity, the economy and livelihoods, and national security.
With the 85-year-old Supreme Leader Khamenei in poor health and the vacant position of the supreme successor following Raisi’s fatal helicopter crash, Iran was “highly likely to plunge into political turmoil.”
Infighting among political factions also erodes national governance capacity. The government of reformist President Pezeshkian faced increasingly fierce conflicts with hardline conservative forces like the Revolutionary Guards and the parliament.
The reformist government was frequently constrained by the parliament when fulfilling political promises and implementing innovative measures, and often encountered “interference” from the Revolutionary Guards when exercising its diplomatic authority.
The contradiction between centralization and local decentralization also plagues many Islamic countries. A study on Iran’s governance structure pointed out that the country has formed a “highly centralized administrative structure,” which conflicts with regional sustainable development and local governance.
The study emphasized that achieving progress and sustainable development must focus on local needs, decentralization, and good governance, requiring “extensive structural and institutional reforms.”
04 Military Expenditure and the Security Paradox: High-Cost Security Assurance
Facing an insecure external environment, many Islamic countries are compelled to divert substantial resources into the military sector, creating a paradox between security and development.
Iran’s conflict with Israel in 2025 exposed significant military shortcomings. Due to aging fighter jets and outdated air defense systems, Iran suffered considerable losses in the war.
Post-conflict, the Iranian parliament swiftly passed a defense bill substantially increasing the military budget, raising the FY2025 defense expenditure from approximately $15.7 billion to $46 billion—a threefold increase.
Brigadier General Mohammad Reza Ashtiani, Deputy Chief of Staff of the Iranian Armed Forces, stated: “If necessary, Iran must have sufficient military supplies to sustain a war for ten years.”
Simultaneously, Iran is actively seeking external military cooperation. Reports indicate Iran is considering purchasing China’s J-10CE fighter jets and HQ-9BE air defense missile systems to enhance its air force and air defense capabilities.
However, excessive military spending crowds out substantial resources that could otherwise be used for economic and social development, creating a vicious cycle: a deteriorating security environment leads to more military spending, which in turn reduces resources available for improving economic and social conditions, further exacerbating internal discontent and instability.
05 Social Contradictions and Transformation Dilemmas: The Double-Edged Sword of Demographic Dividend
The social structure of the Islamic world shows a notable “polarization trend.” The young demographic structure presents both developmental potential and social pressures.
On one hand, a high proportion of young people offers potential consumption and labor dividends; on the other hand, high unemployment rates and public expenditure pressures in non-GCC countries mean the “demographic dividend could turn into a demographic burden.”
Iran’s socio-economic situation is particularly severe. Due to harsh Western sanctions and mismanagement, Iran’s economy is under significant pressure. The value of the Rial continuously hit record lows, and the inflation rate in 2024 could reach as high as 31.7%.
This winter, Iran also experienced a severe electricity crisis, with scheduled power outages beginning in multiple cities, including the capital Tehran. Government office closures, school suspensions, and market shutdowns became commonplace.
Digital transformation has become a core driver reshaping Middle Eastern societies. GCC countries are moving from “digital access” towards “digital governance,” gradually forming a social structure dominated by the digital economy.
However, the imbalance in digital development also exacerbates the development gap within Islamic countries and between them and other nations.
Persistent livelihood pressures intensify social discontent. In Iran, following the “Headscarf Law” incident, public discontent spilled over into the political arena. Coupled with incitement from external forces, street protests occurred frequently, sharply increasing the government’s costs and difficulties in maintaining stability.
On the streets of Tehran, young people queue in the cold under neon-lit electronic billboards to buy limited-supply portable power banks. Meanwhile, in Riyadh and Abu Dhabi, sovereign wealth funds are pouring tens of billions of dollars into AI and new energy industries.
The fork in the road for the Islamic world has clearly appeared—to remain mired in the vortex of geopolitics or to seek a new path through institutional reform and technological revolution. The answer lies in the pace of governance system reform and the effectiveness of economic development.
Only when the speed of internal governance innovation surpasses the escalation of external challenges can the dream of a powerful Islamic nation become reality.
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