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Life after oil

Life after oil

Gulf countries are struggling with how to gird their economies for the day when their fossil fuels run out.

January 27, 2010 10:41 by

One thing’s for certain in the Gulf’s corridors of power: The policy discussions are growing more critical by the day.

Governments here are faced with two brutally stark financial choices: To use their oil wealth and invest it in assets abroad in an effort to reap returns or to invest the money locally by expanding into new sectors. But with so much wealth, why bother with new initiatives in the first place?

Take Qatar. Its director for development planning stood in a room of economists and policy makers last month, outlining his country’s plan of diversifying its economy away from the natural gas that has made his country so wealthy. His presentation echoed Qatar’s National Vision 2030, a 40-page plan emphasizing education, cooperation with regional players, and support for entrepreneurship.

The talk came after two days of academic and policy-related discussion at the Conference on Natural Resources and Economic Development held at the Dubai School of Government. The attendees discussed Norway’s success in making its oil wealth work and the failure of the Netherlands to do so.

They talked about Middle East specific challenges and reviewed historical conflicts created by the discovery of natural resources. Then Sheikh Al Thani reached the end of his presentation: A slide announcing another similarly titled conference taking place in Doha this winter to address the challenges on economic diversification in the GCC.

These discussions are far from over. Although many politicians in the rest of the world speak extensively about “reducing dependency on oil” to score points with voters, those same voters might be surprised to learn that leaders in the Gulf are just as adamant about their own nations reducing dependency on hydrocarbons, albeit for different reasons.

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