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Why the current oil boom for the Arab nations could be their last

The Gulf states experienced oil booms in the 1970s and 1980s, and then another in the early 2000s. But that changed. attitude towards energy consumption means such cycles may no longer exist and Gulf states need to prepare for it, experts say.

“This is definitely the beginning of the end for oil wealth at this sustained level,” said Karen Young, senior research scholar at Columbia’s Center for Global Energy Policy.

“Today’s boom is different in that it’s not just an oil crisis,” Young said. “It’s a huge structural change in how we meet global energy demand.”

Middle Eastern energy exporters expected to reap $1.3 trillion in revenue from hydrocarbons Over the past four years, the International Monetary Fund said it was the result of the current boom. Experts have warned them not to squander it, arguing that Gulf states need to protect themselves from fluctuations in oil prices by using profits to diversify their economies away from dependence. dependent on oil wealth.
During the previous oil boom, the Gulf states were seen as squandering their wealth on wasteful and inefficient investments, building structures and buying weapons, as well as distributed to citizens. Those booms were followed by downturns as oil prices cooled as countries continued to rely on hydrocarbons for revenue.

“Construction projects are often started and then abandoned when funds run out,” said Ellen Wald, a nonresident senior fellow at the Atlantic Council in Washington, DC. traditionally a lot of corruption. ”

According to Omar Al-Ubaydli, research director at Bahrain-based research organization Derasat, there has been traditionally a great deal of emphasis also on increasing public sector recruitment and public sector pay through bonus or salary increase.

One World Bank May 2022 Report stressed that the wealth gained by the Gulf countries after the pandemic and post-war Ukraine must be invested in the bloc’s “economic and environmental transition”.

Focusing investments on the energy transition is important, the report said, as many parts of the world are accelerating their renewable energy transitions.

Four ways the Ukraine war has impacted the Middle East
Gulf states appear to be trying to diversify. Since the last oil boom ended in 2014, four of the six Gulf states have introduced a value-added tax, and the UAE has gone further by starting a new one. corporate income. Not a single Gulf state has an income tax. Saudi Arabia has been investing in non-oil sectors such as tourism, but experts are skeptical about that sector’s ability to offset oil revenues. The kingdom makes about a billion dollars a day from oil at current prices.

Gulf states have resisted the notion that hydrocarbons could be phased out as a major source of energy as environmentally conscious nations turn to alternative sources. They say that oil is and will continue to play an important role in the global economy.

Critics countered that it was in the interest of oil exporters to advance that narrative, but oil nations have pointed to an increase in crude demand to coincide with the lifting of Covid-19 restrictions. all around the world.

The International Energy Agency is based in Paris said last week that oil demand is expected to increase sharply next year, boosted by the resumption of work in China and global travel.

The United Arab Emirates, one of the world’s top oil exporters, has warned that switching too quickly away from hydrocarbons could trigger an economic crisis.

Sultan Al Jaber, the UAE’s special envoy on climate change, writes: “Policies that aim to divest from hydrocarbons too early without appropriate viable alternatives, are self-defeating. in an August opinion piece. They will undermine energy security, erode economic stability, and leave less income to invest in the energy transition, he added.

Even as economies move away from oil as an energy source, petroleum products such as petrochemicals and feedstock for plastics will continue, said Young of Columbia’s Center for Global Energy Policy. continue to be in need.

However, experts say that Gulf states recognize that even if oil continues to be in demand, such price volatility is unlikely to happen again to the same extent or frequency.

“There is a tangible feeling that this is a temporary boom and that it may represent the ultimate sustained rise in oil prices,” Al-Ubaydli said. “Governments and citizens both feel that this is an opportunity that needs to be exploited to the fullest, rather than reeling through irrational decision-making.”

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Iranian woman dies after being in a coma while being detained by ethics police

One 22-year-old Iranian woman dies After being arrested by Iran’s ethics police earlier this week, Iran’s semi-official Etemad Online website reported, citing her uncle. The woman’s death sparked outrage across social media platforms, prompting reactions from local and Western officials.
  • Story: On Tuesday night, Mahsa Amini and her family, who had traveled from the Kurdistan region of Iran to visit relatives in the capital Tehran, were stopped by an ethics patrol – a strict regulation enforcement unit. strict dress codes for women. According to IranWire, human rights activists who spoke to the family say police grabbed Amini and forced her into a police car. On Thursday, Tehran police said Amini had suffered a “heart attack”. Iranian officials said on Saturday that an autopsy has been conducted and the results will be made public once the experts do an autopsy.
  • Why is it important: The incident has sparked worldwide outrage, with many using the hashtag #MahsaAmini in English and Farsi on social media to protest Iran’s ethical police and the aggressive acts committed by women. faced regarding the country’s strict hijab rules. It also follows recent social media protests in Tehran against “National Day of Hijab and Chastity.”

Erdogan wants Turkey to join the Shanghai Cooperation Organization

President Recep Tayyip Erdogan said he was targeting membership of the Shanghai Cooperation Organization (SCO) for NATO member Turkey, Reuters reported, citing Turkish broadcaster NTV and other sources. other media on Saturday. He spoke to reporters after attending the SCO summit in Uzbekistan. “Our relations with these countries will be moved to a very different position with this step,” Erdogan said. When asked if he intends to be a member of the SCO, he said, “Of course, that’s the goal.”

  • Story: Turkey is currently a dialogue partner of the SCO, an economic, political and security group whose members are China, Russia, India, Pakistan, Iran, Kyrgyzstan, Tajikistan, Kazakhstan and Uzbekistan.
  • Why is it important: Joining the SCO will draw Ankara closer to Russia and China as the Ukraine war polarizes global politics. NATO member Turkey has maintained good relations with Russia through the war and has refrained from joining Western allies in punishing the country.

Image shows the Iranian leader at the event amid reports of deteriorating health

Photos and a video released on Iranian government websites and state media show the country’s Supreme Leader Ayatollah Seyyed Ali Khamenei sitting in a mosque in Tehran attending the ceremony. mourning Arbaeen, ending a 40-day period of mourning for the death of one of the prophets. Mohammed’s grandsons, the day after the report of Ayatollah’s declining health.

  • Story: The New York Times reported on Friday that Khamenei canceled all public appearances last week after becoming “severely ill” and being monitored by a team of doctors. Citing four unnamed people familiar with his health, the NYT said Khamenei was resting in bed after undergoing surgery last week for a bowel obstruction.
  • Why is it important?: Khamenei has been the leader of Iran for the past three decades and is one of the longest-serving rulers in the Middle East. It remains unclear who could succeed the leader, but it is expected that in the event of his death a Council of Experts will convene to discuss his successor.

What to see

Queen Rania of Jordan spoke to CNN’s Becky Anderson about the advice the late Queen Elizabeth II gave her, saying it remains with her to this day.

Watch the interview here:

Around the area

Morocco's Ines Laklalech starts from the 7th hole in Day One of the Aramco Team Series London on June 16, 2022 in St Albans, England.
Rookie professional golfer Ines Laklalech became the first Arab and the first North African woman to win the Ladies European Tour title when she won the Lacoste Ladies Open de France on Saturday.

The 24-year-old Casablanca native beat British golfer Meghan MacLaren in Saturday’s playoffs and said her Ladies Open de France win will be something she will remember “for the rest of her life”. mine” as she celebrated her historic victory in Deauville alongside her husband, Ali, who is also her caddy.

“It feels great,” reported Laklalech, of the Ladies European Tour website. “It’s so special to hear it. I have no words to describe this.”

She added that “Morocco is doing a great job promoting golf” and that “to have a Moroccan win a big tour would be huge for the country and for the Arab world at large. .”

Laklalech also said she is a big fan of Tunisian tennis star Ons Jabeur, who became the first African woman to play in a Grand Slam final as she reached both Wimbledon and US finals. Open this year.

By Aimee Lewis

photo of the day

Environmental volunteers build a pyramid made of plastic waste collected from the Nile River, as part of an event to raise awareness about pollution in

This article has been updated to correct Karen Young’s designation.

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