Middle East Oil Addiction Could Spell Disaster
By Andrew Topf
OilPrice.com
Sun, 15 March 2015
The plunge in oil prices has been felt dearly by the top hydrocarbon-producing countries, with all experiencing deep losses in revenue that in better times, provides a nice cushion for spending on social programs that keep populations happy and peaceful.
Nowhere is this more true than the Middle East, where governments have fattened their treasuries for years on a steady diet of oil and gas revenues that have made their citizens some of the richest in the world. From a CNBC list of a dozen countries that pay zero income tax, half are countries surrounding the Persian Gulf, including Saudi Arabia, Bahrain, Oman, Qatar, UAE and Kuwait. Gas-rich Qatar claims the title as the world’s richest country, with GDP per capita of $102,800 according to the CIA World Factbook.
Not only do Gulf citizens get to keep most of their income; they also receive handsome government handouts, all courtesy of massive oil and gas revenues. Saudi citizens for example enjoy a cradle-to-grave smorgasbord of benefits, including free healthcare, free education, and interest-free home loans. In the Middle East, the oil that comes out of the ground and is refined into gasoline costs a fraction of what motorists pay in the United States or Europe. Another list has Iran, Saudi Arabia, Kuwait and Qatar among the top 5 countries with the cheapest gas prices. Only heavily-subsidized Venezuela’s gas is lower.
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