To a large extent, most Middle East countries are heavily dependent on oil. Think countries like Saudi Arabia, Oman, UAE, Bahrain, Qatar, Kuwait, etc. As oil and natural gas is a limited resource, it makes us wonder what will happen to Gulf countries when oil runs out. To better understand the future of Gulf nations, here are some important things to consider.
Solar energy – In addition to oil, Gulf countries are also blessed with abundant supply of sunlight. And as is common knowledge, solar energy is renewable and will last millions of years. All that needs to be done is setup mega solar plants that could become energy hubs for the region. Solar energy generated in Arab countries could be supplied to Europe, Russia and several Asian and African countries. Gulf countries have the resources to build such mega solar plants and quite a few projects are already underway.
Tourism and trade – Some of the Gulf countries have already emerged as popular tourist and shopping destinations. The region’s rich culture, scrumptious cuisine, oceans of desert, sandy beaches, unique topography, duty-free shopping and low-crime rate have made Gulf countries a popular tourist destination. Tourism and trade can support the economy of Gulf countries even after oil runs out.
Mining – While currently Gulf countries are heavily dependent on oil and natural gas, the region also has abundant supply of natural resources such as gold, silver, copper, lead, tin, manganese, chromium, zinc, iron and aluminum. Rare earth elements like tantalum and niobium are also quite abundant in Middle East region. Mining activities in Gulf region is expected to increase once oil runs out.
Discovery of new oil wells – Even though oil and natural gas are non-renewable energy, new fields with significant oil and natural gas deposits are being regularly discovered in Middle East and Africa. This will extend the time before oil runs out completely. It will give Gulf countries adequate time to diversify their economy and build the necessary infrastructure that will be needed for it.
Rise in retirees and expat population – A number of expats and retirees prefer Gulf countries, as these nations offer high standard of living. Low crime rate is another factor that attracts expats and retirees to Middle East countries like Saudi Arabia, UAE, Kuwait, etc. Easy investment and taxation policies have also played a key role in bringing expats and retirees to Gulf countries.
As is evident, Gulf countries can continue to be rich and thrive even after oil runs out. Of course, there are many challenges, but that is common to all countries and not just Gulf nations. If Middle East countries can proactively work on diversifying their economy, the end of oil won’t be much of a problem.