Beyond pumping and selling oil

When people think of the Arabian Desert and the Gulf countries, the first thing that instinctively comes to mind is oil. Particularly at this point in time, especially when Newsweek recently predicted a doom-laden scenario where a $200 barrel of oil bomb could explode in the near term. And its price is bound to remain volatile for quite some time.

But that, alas, is the short-sighted view.

Most of the Gulf countries are presently thinking and looking beyond oil.

They are thinking in terms of which one of them will and how can they dream up the most daring of projects that will not only bring about a new economic order in the area but also help them develop growth in non-oil sectors as fast as can be while rendering their economies more flexible and sustainable.

The moment you touch down in Dubai you instantly realise that this is where commercial expansion shines most brightly. But many wrongly think that that is where the buck stops. Almost as if it were the only trade and financial centre in the region.

Saudi Arabia, Kuwait and Qatar, among other GCC states, are planning commercial expansion to varying degrees.

The Saudi Arabia I visited a few months ago was totally unrecognisable from the Saudi I visited as a Minister of Commerce in early 1997.

Who would have ever imagined that they are now actually engaged in trying to emulate and duplicate Dubai's success story by being in the process of constructing at least six new economic cities?

Where Malta missed the bus - and I am not being either partisan or political but just down to earth - is that we have not thought hard enough beyond attracting Tecom to Malta.

The Gulf economies are flush with cash and their biggest headache is what to do with their money. Otherwise they would not be turning to sovereign wealth funds with the relish with which they do.

They are prepared to board, utilise, tap and milk any vehicle that will help them invest a sizeable chunk of their money abroad. Particularly now that the price of crude oil has shot up the way it did this past decade.

Dependence on imported labour goes way beyond mere conventional over-dependence. In the UAE only about 1.5 million people are citizens. The rest are migrant workers.

The GCC countries are turning to such investments abroad for a dual purpose. To dump their money somewhere rewarding thanks to the oil price hike. And to take preventive action in case the rising crude prices drop suddenly.

Would you have ever imagined Abu Dhabi funding solar energy development when it produces far more oil than Dubai itself, which is not exactly oil rich? I have come across reports that suggest that certain regional sovereign wealth funds in which GCC countries have invested their money have invested heavily in wind power too.

Qatar might be the least known locally but it fascinates me on two counts, due to its relatively small size and population and the fact that it not only had the clout to recently broker a settlement of the Lebanese crisis but that it literally moves between different worlds, hosting the Al-Jazeera media network and also the US Central Command! This apart, women also drive! Meanwhile, it is considered to be sitting on the largest natural gas reserve after Russia.

A risk consultant was recently asked what is the point of building a ski resort within a shopping mall in Dubai where the temperature in the summer reaches 120 and 130 degrees?

Simple. Forget the economics. Money has got to be parked some place!

If this is not enough, anyone who will be visiting Abu Dhabi in a couple of years' time will be able to also visit their own Guggenheim and Louvre museums if the contracted projects open on time as I am sure that they will.

leo.brincat@gov.mt