Has The Gulf's Mega Finance Experiment Now Failed?

in the last four decades the Persian Gulf has evolved from a region of mostly small fishing villages and nomadic groups to the global Center of Petro dollar fueled excess cities like Dubai Abu Dhabi Doha and Riyad have sprung up seemingly out of nowhere with the promise that they have something of real value to add to the global economy Beyond just being a nation siiz gas station all of these cities are marketing themselves as both a tourist destination and a business Hub to rival centers like Singapore Hong Kong or even New York and London of course it's easy to make most of these Ambitions a reality by just throwing endless p of oil money at them and an economy that hands out trillions of dollars worth of contracts runs high quality subsidized Airlines and implements very generous tax policies is going to attract a lot of international interest but that's clearly not sustainable there are the headline issues like the ultra ambitious neon project and at centerpiece the line which has been scaled down from 170 km to 10 km to now less than 2 km don't worry Saudi Arabia it happens to everyone but while it's easy to laugh at the growing list of ludicrously bizarre failed projects they are a sign that the endless oil wealth of the gulf is not really that endless that could quickly become a major problem for these countries because they've staked their future on that dream of Tourism and international business but it's becoming increasingly unclear if these industries will stick around for longer than they're paid to in the race for the hearts and dollars of international businesses and Wealthy tourists reputation is everything Dubai has gone from being internationally recognized as the wonder city of the future to that kind of tacky place where Crypt Bros rent Lamborghinis to look rich for a weekend that's to say nothing of the negative attention that the other go states have Reed received the only way to know for sure if their economic plan for longevity is working is to see what happens after the oil wealth runs dry but by then it will be too late and at that point all of these big projects generous tax incentives and questionable migration policies would just be a drain on what few resources they have left for what few people they have left so are the Gulf States economic developments really building sustainable Industries or are they just playing pretend with oil money are there more sustainable ways to guarantee the economy's longevity and finally what happens to these places when the oil wealth dries up real quick before we jump back in have you ever been denied access to content or notice prices changing based on your location feels like the internet's playing games with you right let me tell you about something can make your online experience a whole lot easier today's sponsor surf shark VPN does just that with surf shark you can choose your virtual location and access the internet as if you're anywhere in the world traveling abroad and can't watch your favorite shows no problem want the best deals on flights and hotels Surf Shar helps you avoid price discrimination by changing your location saving you money on everything from tickets to subscriptions and while you explore online surf shark encrypts your data keeping it safe from hackers and prying eyes whether you're on public Wi-Fi or at home plus they have a strict no logs policy meaning no tracking or snooping ensuring your privacy stays intact ready to take control of your online world go to Surf shar. com economics and use code economics to get four extra months for free with a 30-day money back guarantee is zero risk in trying it out for most of their history the Gulf States have had very small sparse populations because Geographic obstacles simply couldn't support a large population there were very few arable regions very harsh conditions and nothing really worth living there for except for the groups that had been there for centuries and their nomatic Customs that helped them weather these difficulties Maritime trading was an ancient staple but much of that revolved around the slave trade manuscripts and new technological discoveries that assisted with these limited markets but after George Bernard Reynolds a British geologist and oil industry executive discovered oil in 198 8 the Paradigm shifted violently towards the extraction and exportation of the precious resource suddenly it didn't matter if the land couldn't support people because they could export oil and import literally everything else they needed the economic development has transformed Gulf societies and economies and at the same time the population has also undergone a significant change specific countries like the UAE are now home to almost a 100 times as many people as they were when oil production first started to ramp up in the 1960s a lot of people have moved there as Oil Workers and support workers but a lot of people have also moved there because of the industries the country is building top tier engineers and business Executives have made a home in the countries inhabiting the Persian Gulf often used for PR to show how developed the region has become however the bulk of new labor consists of underpaid laborers the conditions they endure to build oil funded vanity projects and questions regarding sustainability of this Persian Gulf oil boom are contributing to a growing controversy specifically the cfala system giving golf countries almost total control over migrant workers employment and immigration status the lack of regulations and protections for migrant workers rights often results in low wages poor working conditions and employee abuse even despite these now very well documented problems this paper population burned by itself is also not sustainable because it was never really meant to be the Arab states of the Persian Gulf stand out with men outnumbering women by almost four times in Qatar followed by the United Arab Emirates Bahrain Oman Kuwait and Saudi Arabia these elements undoubtedly contribute to the growing disparity so in addition to these social changes of concerns are Gulf State's Economic Development really building sustainable Industries or are they just playing pretend with oil money well its traditional Industries are all bit extinct but to be fair that would have happened with or without oil while the Persian Gulf was known for sail cloth camels readed mats dates red ochre and Pearls the notion that these industries have contributed to Modern development of the Persian golf countries when referring to the golf's history is nothing more than a f typically oil wealth can compromise existing local Industries but of course these would have died anyway sailcloth is almost non-existent camels are primarily used for novelty meat dates are grown virtually everywhere in the world with similar conditions pearls are a slow limited game and textiles are far from being a rare commodity not to mention that these supplies have historically been scarce primarily been traded amongst those geographically accessible within the gulf itself with our at lands that see little to no vegetation the modern discussion has always been a matter of energy energy with numerous limitations and more importantly totally non-renewable moreover the rising population is simply too large to support without the current inflow of oil Revenue these countries couldn't supply enough food and water without Imports and they cannot pay for those Imports without oil money for now this hasn't been a problem for them and that's a matter of accessibility in places like the North Sea or the United States one can see elaborate oil rig systems to pump the resources out of the ground the oil is there but it's challenging to extract in the Persian golf though the oil is so easily accessible that it literally Bubbles and shoots out of the desert floor making it far cheaper to extract than the former with cheaper extraction and greater volume it's easy to see why the Nations presiding over this coveted resources ran with it with it only costing about $20 per barrel in places like Saudi Arabia and about $90 per barrel in the Deep water wells this means that they will turn a profit even if the other regions become unprofitable but there is a looming problem the flow of oil is massive but it's not endless not by a long shot over dependence on a single industry is never a good thing and the Gulf States have taken oil dependence to the extreme this has made the gulf countries effectively less of an economy in the traditional sense and more of a Barren industrial Outpost constantly dependent on resupplies of literally everything in exchange for their One Singular precious resource so are there more sustainable ways to guarantee the economy's longevity the 2022 FIFA World Cup host qar has recently come out with what they call the Qatar National Vision 2030 the government claims that it aims at transforming Qatar into an advanced country by 2030 capable of sustaining its own development and providing for a high standard of living for all of its people for generations to come they claim that they'll be able to improve environmental development using lale city as a prime example of what is to come according to what Qatar shares with the Press lale is a smart city project intended to house its Rising population of expats of the 2. 3 million people who live in the country fewer than 315,000 are native qaris the plan is to make a hip modern and sustainable location for remote and domestic workers a fun place to spend their money apparently what gives lale this smart City status is sustainable facilities and utilities the most notable being a district cooling system 175 km of piping are projected to save an estimated 200,000 tons of carbon dioxide annually they also make a big deal out of their move to focus on the production of natural gas which produces 25% less carbon dioxide than gasoline 27% less than fuel oil 30% less than crude oil and 45% less than coal but these figures still don't represent a long-term solution because this still requires continual extraction of non-renewable resources with foreign laborers continuing to come out in large numbers calling for major reforms related to the insanely Antiquated cfala system something that made headlines during and after the FIFA World Cup the chasm separating Qatar from its 2030 objectives appears to be widening then there is Bahrain which is noted for spearheading the Post oil economic movement investing Banking and tourism sectors since the late 20th century they've also expanded their industrial Network to include the production of aluminium signing a free trade agreement with the United States to expand their export base in 2002 oil made up 42% of brain's GDP but by 2023 it had declined to 14.

5% the UAE is also applauded for its efforts to diversify currently they're investing in sectors including technology health education renewable energy and transportation through their Sovereign wealth fund the UAE claims that this fund is making strides to booth social entrepreneurship for the Next Generation teaching them ways to capitalize in the post oil era these programs are heavily focused on the technology sector with goals to teach Emira children how to code support Emira researchers and high-tech startups and to support small and midsize Enterprises that encourage positive social impacts now although this sounds positive all of these countries are falling for the same trap they've become incredibly wealthy at least on the surface thanks to their oil wealth and this has afforded them a glamorous lifestyle akin to or even exceeding most advanced economies so they're trying to replace this unsustainable industry with the advanced glamorous Industries they see in other advanced economies but they're not advanced economies in fact they are extremely basic economies Advanced Industries like building smart cities to house coders and social entrepreneurs whatever that means sounds great but there is no competitive advantages to running these industries in the Gulf over more established Global centers like Silicon Valley or even shenen since these countries are all targeting industries that will compete globally they need to provide a competitive reason why profit-driven businesses should operate there over the places they always have for now that reason is because businesses can enjoy tax breaks and a flow of oil money but when that stops any advantage that the Gulf States had over existing centers will stop too and the underlying issues with the region will be the only thing left for Saudi Arabia the situation is largely the same the oil sector alone generated an estimated gross domestic product of approximately 67. 7 billion Saudi r that said the total estimated GDP for the year was about 2. 62 trillion Saudi Ro or almost 6 50 billion much of this comes from the private sector so they're attempting to diversify and privatize but unfortunately the way they're doing it is almost as unsustainable as the oil extraction they're trying to replace a perfect example of this has to do with their interest in the EV Market specifically Lucid Motors an automotive and technology company that makes electric vehicles and supplies Advanced electric vehicle powertrain systems the problem with this move for one is that these vehicles are horrendously expensive with the price of a 2025 Lucid air expected to start around $71,400 $100 and go up to $251,000 depending on the trim and options even at that price Lucid is a long way from being a profitable company more accurately all it's done so far is hemorrhage money in 2023 Tesla produced 1.