Ziad Daoud, Columnist

Want to Reduce Gulf Arab Reliance on Oil? Try Universal Income

Instead of paying for low-productive government jobs, the GCC states should give all citizens a monthly stipend.

March 11, 2021 at 5:00 AM UTC

Ziad Daoud is the Chief Emerging Markets Economist for Bloomberg Economics. He's a Senior Fellow at Harvard Kennedy School. He previously worked as Head of Economics at QNB Group, and as an economist at Fulcrum Asset Management

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Countries in the Gulf Cooperation Council have built their economies, societies and political systems around oil. These are at a growing risk of disruption as crude’s importance in the global economy diminishes and prices fall. A universal income for citizens could help governments smooth the transition to a post-oil world.

Oil is central to the social contract in the Gulf. Petrodollars provide the lion’s share of government revenues, allowing rulers to keep taxes low. The Gulf monarchies provide citizens with cushy, and usually unproductive, public-sector jobs as a way to distribute oil rents — and to compensate for limited political representation.