Gulf set for large-scale drawdown of foreign assets

2015 ◽  
Keyword(s):  
Large Scale ◽  
Oil Prices ◽  
Economic Diversification ◽  
Sovereign Wealth Funds ◽  
Content Type ◽  
Fiscal Adjustment ◽  
Capital Spending ◽  
Gulf States ◽  
Oil Revenues ◽  
Spending Cuts

Subject Gulf debt and sovereign wealth funds. Significance After more than a decade of growing oil revenues and rapidly increased spending, the collapse in oil prices since autumn 2014 has transformed the fiscal environment for Gulf oil monarchies. This year will be the first since the early 2000s that most of them incur deficits. Their options for managing them include spending cuts, raising revenue, debt issuance and a drawdown of international reserves. Impacts Saudi Arabia's deep reserves will allow continued high spending for at least half a decade. Bahrain has the fewest liquid assets and faces the most brutal fiscal adjustment, followed by Oman. State-driven economic diversification efforts are likely to slow due to reduced capital spending, including on investment in new sectors. Gulf states' chequebook diplomacy in countries like Lebanon or Egypt will become increasingly less generous. The larger SWFs' tightening focus on risk management leaves them better positioned to manage funding challenges and withdrawal risk.

Has the Sovereign Wealth Fund of Azerbaijan (SOFAZ) Been Able to Promote Economic Diversification?

2013 ◽  
Author(s):  
Vahid Yücesoy
Keyword(s):  
Fossil Fuels ◽  
Dutch Disease ◽  
Future Generations ◽  
Direct Control ◽  
Economic Diversification ◽  
Sovereign Wealth Funds ◽  
Sovereign Wealth Fund ◽  
Rentier States ◽  
Oil Revenues ◽  
Rich Countries

Oil-rich countries have oftentimes been confronted with the challenge of diversifying their economies away from oil dependence given the exhaustible nature of these fossil fuels. Investing in sovereign wealth funds has been one of the most ubiquitous ways of preparing for the post-oil period. Investing in sovereign wealth funds rather than directly injecting the oil revenues in the economy not only precludes the outbreak of the Dutch Disease (which is known for giving rise to an exchange rate appreciation, crowding out non-oil industries and keeping the economy reliant on oil), but it also saves for future generations. Yet, in the case of Azerbaijan, the Sovereign Wealth Fund of Azerbaijan (SOFAZ), founded in 1999, has only increased this reliance on oil. Using the rentier states theoretical framework, this paper will argue that the direct control over SOFAZ exercised by the president and the lack of consultation with the NGOs have made corruption easier, making the task of economic diversification more difficult. This has been possible because through corruption the president has often resorted to oil money to buy peace rather than invest it in economic diversification. As a result, since the foundation of SOFAZ, the country is more reliant, not less, on oil.   Full text available at: https://doi.org/10.22215/rera.v8i1.223  

Toward a diversified economy in post-pandemic environment: regeneration of Qatari villages

2020 ◽  
Vol 45 (3) ◽  
pp. 269-282
Author(s):  
Ghada H. Fetais ◽  
Remah Gharib
Keyword(s):  
Nonprofit Organizations ◽  
Data Gathering ◽  
Exploratory Research ◽  
Structured Interviews ◽  
Economic Diversification ◽  
Content Type ◽  
Built Heritage ◽  
Gulf States ◽  
Vision 2030 ◽  
Strategic Goals

Purpose This paper aims to explore the possibilities of economic diversification in the State of Qatar through the regeneration of built heritage post the COVID-19 pandemic, promoting sustainable tourism and creating a center for cultural heritage in Qatar, thereby enhancing the sense of identity both socially and physically among the nationals and residents. In light of the strategic goals of the Qatar National Vision 2030, which is to diversify Qatar’s economy and minimize its reliance on hydrocarbon industries, if these ambitious goals are to be achieved, there is a necessity to maintain the local cultural identity, demonstrated through architecture and urbanism. Design/methodology/approach This study is an exploratory research based on qualitative methods of data gathering and investigation. The local communities who used to live in the scattered old villages were approached with surveys. At the same time, semi-structured interviews were conducted with professionals in the field in Qatar and other individuals from the public, depending on their literacy levels. Findings This paper examines how to revive those villages and improve their current economic level. Finally, the study proposes some recommendations for these abandoned villages in an attempt to rejuvenate their built heritage and revitalize their socioeconomic status. Originality/value Economic diversification needs to be engendered through the services and products of Qatari society; this is possible by exploiting current resources such as the built heritage or historic sites in areas outside the emerging metropolitan cities. This study reveals the great potential of regenerating the old villages of the Gulf States by establishing nonprofit organizations and increasing the economic benefit of the abandoned historic structures.

Migrant Workers in the Arab Gulf: The Impact of Declining Oil Revenues

1986 ◽  
Vol 20 (4) ◽  
pp. 799-814 ◽  
Author(s):  
J.S. Birks ◽  
I.J. Seccombe ◽  
C.A. Sinclair
Keyword(s):  
Migrant Workers ◽  
Large Scale ◽  
Government Expenditure ◽  
Economic Downturn ◽  
Immigrant Labor ◽  
Foreign Labor ◽  
Gulf States ◽  
Arab Gulf ◽  
Oil Revenues ◽  
The Impact

This article explores the relationship between government expenditure and labor immigration in the Arab Gulf states. This relationship was close and positive during the rapid growth of the 1970s. Using Kuwait as a case study, trends in immigrant labor movements over the period 1981–85 are considered in detail. This analysis shows that the current economic downturn, reflecting the collapse of the world oil prices, has not resulted in the large scale re-export of foreign labor which was envisaged. The reasons for this foreign labor retention are considered and the authors speculate on future migration trends in the region.

Africa's 'oil price winners' face mixed prospects

2015 ◽  
Keyword(s):  
Southern Africa ◽  
Oil Prices ◽  
Oil Price ◽  
Political Space ◽  
Medium Term ◽  
Short Term ◽  
Economic Diversification ◽  
Content Type ◽  
Civil Unrest ◽  
Sub Saharan

Subject Africa's oil price winners. Significance Despite traditionally being winners during periods of oil price decline, the medium-term outlook is mixed for sub-Saharan Africa's (SSA) oil importing countries -- reflected in the IMF's recent downgrade of its SSA outlook from 5.75% to 4.9%. Short-term gains reduce the fuel import bill, but uncertainty looms over energy investments in eastern African, while idiosyncratic risks cloud the outlook for southern Africa. While oil exporters may also reap some benefits, much will depend on the degree of oil dependency, political space to make the necessary policy retrenchments, and the extent of government financial buffers. Impacts If sustained, low oil prices could provoke civil unrest, rather than reforms, in oil exporting countries. Most oil exporters will struggle to maintain macroeconomic stability if oil remains low for more than a year. However, economic diversification to some degree helps to shield the region from sharp global slowdowns.

Saudi economic reform will be gradual

2016 ◽  
Keyword(s):  
Business Community ◽  
Special Treatment ◽  
Asset Sales ◽  
Royal Family ◽  
Content Type ◽  
Capital Spending ◽  
The Government ◽  
Crown Prince ◽  
Spending Cuts

Significance The government has recently taken some modest steps to rein in the budget deficit, including cuts in energy subsidies, and has promised to improve disclosure of its fiscal performance, but is preparing further measures to put the economy on a sustainable long-term footing. Impacts Subsidy cuts and the prospect of VAT could cause popular resentment because they will affect ordinary citizens more severely than the elite. These measures will widen the income gap and, in the longer run, could increase pressure for more accountable forms of government. Land and other asset sales could generate controversy if businesses associated with the royal family are receiving special treatment. Capital spending cuts will create anger among the business community if projects linked to the deputy crown prince are protected. A prolonged fiscal squeeze could stoke tensions within the royal family and damage the credibility of the deputy crown prince.

Iran budget signals caution over sanctions relief

2015 ◽  
Keyword(s):  
Government Spending ◽  
Political System ◽  
Oil Prices ◽  
External Pressure ◽  
Fiscal Year ◽  
Content Type ◽  
Spending Patterns ◽  
International Dispute ◽  
The Government ◽  
Oil Revenues

Subject Iranian budget. Significance The government negotiated the 2015-16 budget, which will come into effect at the start of the fiscal year on March 21, against the backdrop of two major uncertainties -- the outlook for global oil prices and talks to resolve the international dispute over Iran's nuclear programme. As legislated, the budget reins in spending and assumes the continuation of the sanctions regime and significantly lower oil revenues. However, there are serious questions over whether the budget's projections, including higher revenues from taxation and privatisation, and lower spending on cash grants, will be met. Impacts Even with a nuclear agreement, the government's budget balancing act this year will be a challenging one. Parliament's smooth passing of the budget shows that Iran's political system can operate on consensus even under external pressure. Removal of sanctions and increased oil revenues could lead to a return of undisciplined government spending patterns.

Ecuador unlikely to scrap dollarisation

2015 ◽  
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Oil Prices ◽  
The State ◽  
Content Type ◽  
Severe Strain ◽  
The Future ◽  
The Government ◽  
The Right ◽  
Oil Revenues

Subject The future of dollarisation in a context of low oil prices. Significance Oil revenues have underpinned the popularity of President Rafael Correa's government by enabling spending on welfare, infrastructure and development that has boosted economic growth. The collapse of world oil prices has placed the dollar-denominated economy under severe strain and raised doubts about the future of dollarisation in Ecuador. Impacts The fiscal challenges the government is facing will provide the opposition with an opportunity to strengthen in 2015. The right will play on concerns over the management of the economy, the scale of public debt and the size of the state. The left will attack the government for failing to reduce Ecuador's reliance on oil and undertake wider and deeper reforms.

Gulf states have limited ability to pressure Russia

2015 ◽  
Keyword(s):  
Military Intervention ◽  
Oil Prices ◽  
Content Type ◽  
Limited Ability ◽  
Rebel Groups ◽  
Oil Markets ◽  
Gulf States ◽  
Direct Threat

Significance Russia's deepening military intervention in Syria has lent renewed urgency to Qatari and Saudi efforts to channel weaponry and support to Syria's faltering rebel groups. Impacts Hit by low oil prices, Riyadh and Doha may use Syria as a pretext to scale back joint Russian investment programmes. They will use Moscow's intervention to pressure Washington to support a decisive regional military intervention. Efforts by Russia and OPEC to cooperate on addressing oversupply in global oil markets will be complicated. The Russian presence will boost Islamist extremist narratives and strengthen radical jihadi groups. Increased ISG recruitment poses a direct threat to internal Gulf security.

Prospects for the Gulf states in 2016

2015 ◽  
Keyword(s):  
Economic Reform ◽  
Regional Policy ◽  
Oil Prices ◽  
Gulf Cooperation Council ◽  
Content Type ◽  
Gulf States

Subject Prospects for the Gulf states in 2016 Significance Oil prices are biting into government revenues and increasing pressure for economic reform. However, Gulf Cooperation Council (GCC) governments are prioritising regional policy following the international nuclear deal with Iran.

Rising oil prices will bolster Ecuador’s Moreno

2018 ◽  
Keyword(s):  
Oil Prices ◽  
Political Crisis ◽  
Environmental Discourse ◽  
Content Type ◽  
Yasuni National Park ◽  
Fiscal Conditions ◽  
Oil Sector ◽  
International Investors ◽  
The Government ◽  
Oil Revenues

Significance Higher oil prices have eased pressures on Ecuador’s trade balance and public finances, helping President Lenin Moreno as he attempts to ameliorate the political crisis that has gripped his government since his inauguration in May. However, the oil sector faces challenges including tight fiscal conditions, production cuts and widespread corruption. Impacts Higher oil prices will reassure international investors that the government will be able to honour its rising debt obligations. Moreno is likely to secure referendum backing for his plans to increase the protection of the Yasuni National Park. Moreno will find it difficult to reconcile his environmental discourse with his need to bring in fresh oil revenues over the longer term.

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