For several decades, oil had been the largest source of revenue for states in the Arabian Gulf. The increasing global consumption of oil has greatly boosted the economies of states in the Arabian Gulf, which thrive on the billions of dollars obtained annually through the sale of oil and oil by-products.
However, the realization of the possibility of the depletion of oil wells in the Arabian Gulf has aroused debates on the ability of states with oil-based economies to survive without oil.
The rate at which oil wells are drying up globally is a clear illustration that states in the Arabian Gulf will not remain cushioned from the social, economic and political upheavals that accompany the weakening of a key economic pillar. An evaluation of the total barrels of oil produced globally illustrates that the current rate of oil consumption is unsustainable in the end.
States in the Arabian Gulf can only cushion themselves from the severity of oil-related crises if they adopt systems, policies, and procedures that will ensure the survival of their economies once the oil wells in the Arabian Gulf dry up.
Sustainable economies require investment in fields such as healthcare, education, and research, which rely minimally on the availability of natural resources. Investing in these fields will provide the Gulf States with a platform to sustain or improve their per capita income, which currently depends on the revenue generated through oil.
Although the oil wells may take time before completely drying up, the Gulf States will start experiencing economic upheavals as soon as the cost of extracting oil reduces the economies of scale associated with the mining and exportation of oil. Globalization is increasingly transforming the economies of individual countries into a concern of other nations.
Counties such as the United States, which engages in various aspects of direct foreign investments, must first evaluate the economic sustainability of its activities in a country of interest. In this regard, the infrastructure and human resource must be such that it can sustain an investment.
A properly developed human resource guarantees economic sustainability due to the abundance of knowledge that allows research and experimentation in diverse fields. A country’s overreliance on natural sources of revenue generation hampers the development of human resource as evident in the various Gulf States, which had largely remained uninvolved in the development of education systems and research facilities.
Investment in research enables nations to identify sustainable sources of revenue and thus gives a country considerable flexibility in case some key economic pillars weaken. Also, it minimizes the reliance on natural resources whose depletion subjects a country to turmoil.
To survive in an increasingly competitive world, countries with minimal natural resources have to invest in research to identify alternative means of maintaining social, economic and political balance. Gulf States face a similar situation considering that apart from oil, the Arabian Gulf’s endowment in natural resources is limited.
Declining natural resources have been a major source of conflicts in various parts of the world. The inability to share dwindling benefits due to decreasing economic viability of natural resources increases the tendency to employ unorthodox means to safeguard individual interests. The control of most of the oil field in the Arabian Gulf has been a major source of conflicts despite the abundance of oil in the region.
States such as Iraq and Kuwait have engaged in conflicts over the control of about 500 oil wells in Kuwait. Thus, the depletion of oil wells in the Arabian Gulf is likely to trigger conflicts between states seeking to acquire control of the available resources and sustain their economies. The Gulf States keen on avoiding conflicts relating to declining oil resources must develop alternative sources of revenue.
Unsustainable economies fuel social and political unrest due to increased difficulties in accessing basic amenities. A declining GDP and per capita income increasingly reduce people’s socioeconomic independence. In this regard, people become increasingly dependent on welfare programs. Infrastructural development halts once a country’s GDP starts to decline.
Thus, the sustainability of projects initiated using proceeds from oil is likely to suffer when oil wells dry up. To sustain projects that require heavy funding, the adopted sources of revenue must tap into human resources, which is one of the most abundant resources.
Proper exploitation of human resource requires systems that impart relevant skills on the population of a country. Investing in the human resource will give Gulf States respite when the oil wells in the Arabian Gulf dry up.
Since the Gulf States have generated significant amounts of revenue through the sale of oil and oil by-products, they have the resources relevant to the process of transforming themselves into economic hubs that are independent of the number of barrels of oil produced annually.
Other nations, though not producers of oil, are taking precautionary measures to protect themselves from the impending depletion of most of the world’s natural resources. A nation’s ability to survive in a world with depleted natural resources will depend on its ability to tap into other kinds of resources.