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Gulf States Must Use Oil Wealth Wisely

Policymakers worldwide need to soberly consider the global and domestic consequences of enormous capital investments from the oil-rich GCC

With crude oil prices soaring, Gulf exporters have emerged as major players on the global financial stage, snapping up stakes in prominent Western retailers, stock markets and investment banks. But the coming oil windfall will dwarf anything we've seen yet, possibly boosting their earnings to three or four times the amount reaped in past years. This fortune portends both promise and risk for economies and capital markets in the Gulf and beyond, presenting several complex challenges for policymakers.

New research by the McKinsey Global Institute (MGI) shows for the first time the potential scale of this windfall. The oil revenues of the six states of the Gulf Cooperation Council (GCC)—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates—will collect up to $6.2 trillion in profits over the next 14 years if crude prices are $70 per barrel. That's more than triple the amount they earned over the last 14 years.