Arabs Should Welcome a Future With Less Oil Wealth
Hydrocarbon rents have encouraged bad habits in non-oil states. They would benefit from getting off the habit.
Oil rents pay for those flags.
Photographer: Hasan Shaaban/BloombergA new report from the International Monetary Fund warns that, by 2034, declining oil demand could gnaw away the $2 trillion in financial wealth amassed by the members of the Gulf Cooperation Council. Unless they act quickly to reform their hydrocarbon-dependent economies, these countries, which collectively account for a fifth of the world’s crude production, will become net debtors.
Inevitably, the report has led to predictions that the evaporation of Arab oil wealth will bode ill for economic development and political stability in an already troubled region. Beyond the GCC, low oil prices would hamper the progress of populous, but still under-developed, oil-rich Arab countries—Iraq and Algeria—that must reorganize their economies and societies toward productive sectors without the cushion of wealth salted away during the boom years.