Economics Explained Has The Gulf Mega Finance Experiment Failed?
Sep 6, 2024
Discover the remarkable rise of Gulf cities like Dubai and Riyadh from humble fishing villages to icons of opulence. Dive into the ambitious projects designed to attract tourism and business. But there's a catch—the sustainability of this oil-driven boom is questionable. Explore the critical challenges faced as oil reserves dwindle and the urgent need for economic diversification emerges. Will these glittering metropolises adapt to a post-oil era, or risk becoming relics of a bygone prosperity?
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Oil Wealth Limits Gulf Growth
- Gulf cities grew rapidly using massive oil wealth but face sustainability issues as oil supplies decline.
- Ambitious projects like NEOM's "The Line" scale back, signaling limits of endless oil wealth.
Migration and Labor Challenges
- Gulf states have small native populations and rely heavily on imported labor under harsh kafala systems.
- Male-dominated demographics and poor migrant rights challenge both social sustainability and labor supply.
Oil Replaced Minimal Traditional Economy
- Traditional Gulf industries nearly vanished even before oil's arrival; oil wealth replaced an already minimal economic base.
- The Gulf's extreme oil dependence makes it more a resource outpost than a diversified economy.