A future of the Middle East without oil?

The economic histories of the Arab kingdoms of the Persian Gulf have undeniably been impacted by the enormous oil reserves available on their territories: petroleum enabled the so-called oil-monarchies to flourish.

In 1960, oil was found in the Emirate of Abu Dhabi and since then brought forward leading economic development over the over emirates. In 1971, the discovery of the North Field in Qatar, deemed today’s largest non-associated gas reserve in the world, has paved the way for an unparalleled economic ascent. Kuwait, today’s fifth largest OPEC oil producer, and Saudi Arabia, whose institutions have grown on oil incomes, followed these two countries.

Today, the economies of these four Gulf kingdoms base the majority of their incomes on their oil exports, and these states have not diversified their economies; however, in the wake of our modern environmental concerns, petroleum is turning obsolete and out-of-date, as the world seeks for sustainable alternatives. In these terms, Gulf monarchies are dependent, fragile and at risk.

Should we be pessimistic about a future of Middle East without oil?

The political economies brought forward by the rules of Qatar, the UAE, Kuwait, and Saudi Arabia, in relation to oil, have created a long-standing oil dependency, and are linked to the political history of each of the monarchies.

A set of factors has in fact contributed to creating this model and different circumstances continue to guide the same economic decisions. This mainly sees a mixture of tribal politics and rentierism.

Tribal politics – pursued by tribes, groups which have become part of the royal families by cultivating relationships with the monarchs over the years – are interlocked within Arab kingdoms politics, and date back to ancient kinship networks in the Middle East.

Where does the link between tribes and oil lie?

Tribes have influenced the kingdoms’ dependence on oil. Prior to their independence, the British developed oil companies and in this complex neighborhood, borders between states were hardly outlined, pushing every state to claim as much of the discovered oil as possible as its own.

Tribal politics played a geopolitical game, as ambitions resonated within the mindset of all tribe leaders. After the traditional tribal elites have allowed their monarchs to secure their rule in exchange for them maintaining their individual oil wealth.

This internal dynamic transformed into an international political economy model, known to the Gulf kingdoms as rentierism. Rentier states derive substantial proportions of their revenues from renting their sources of natural resources to external parties.

They are less dependent on taxation because they receive substantial amounts of funds from abroad. The idea was that, because money could always be drawn from oil exports, there was no need at their time of development to expand local production.

How are Gulf countries acting to secure themselves a future without oil?

A clear understanding of these factors and influences is necessary to outline the future prospects for a Middle East without oil. In fact, this scenario depends on the ability of the concerned economies to cope and deal with structures and determinants that, as we have seen, are profoundly ingrained in their societies. 

An idea about such developments can be gained by analyzing what these major economies have set as their future goals in the last years, and for the following to come, as the Gulf monarchies that have begun to recognize strategies to be taken to cope with these forthcoming scenarios.

Qatar has been trying to change the nature of its economy and divert from the rentier state model. In the Qatar National Vision 2030, “a diversified economy” is asserted as one of its four pillars of commitments – dedicated to Economic Development.

The country plans to reduce its dependence on hydrocarbon industries, enhance the role of its private sector, and maintain its competitiveness. Remarkable goals to watch for include the one to design and develop new economic activities, in which Qatar can specialize in.

Saudi Arabia also has a plan to diversify its economy. “Vision 2030” commits and states the creation of more than ten sectors, the establishment of more than thirty companies, and the creation of more than three thousand jobs. The automobile sector, the defense industry, national security, trade and finance, and the cultural sector, among others, appear in the Public Investment Fund.

In the energy sector, the Vision has expanded a number of projects for energy plants; it addresses the role of industrial cities to develop the mining sector, as well as the importance of investing in its heritage, tourism and entertainment sector.

Like for Qatar, these commitments are to be monitored in the following years in order to determine their real effectiveness, but the two visions constitute a starting point.

Very similarly two the other two, Kuwait’s National Vision 2035 aims towards a transformation of the country into a leading financial and commercial hub, focusing on reducing the reliance on hydrocarbon exports and the creation of new employment opportunities for Kuwait nationals

The Emirates is an even more curious example as it boasts different wealth funds. The largest being the Abu Dhabi Investment Authority – though no funds are invested domestically, Mubadala, and the Emirates Investment Authority.

As a matter of fact, Dubai was deemed a post-oil emirate when its oil production fell sharply in 1991. Dubai directed its economy within a diversified approach and invested in construction and real estate, but the bursting of the real estate bubble in 2008 did deal a blow to its economic and political process. Its reliance on Abu Dhabi was in fact reasserted, as it had to secure its loans from state-owned Abu Dhabi banks.

To conclude, what is relevant for our questioning is the fact that the Gulf kingdoms have first of all recognized the issue of their oil dependence and have put it forward within their national economic strategies.

The Middle East’s transition to more diversified economies, with an increased role of the private sector is hopeful; yet the future of the “petrolific welfare” will likely depend on the concrete reforms and decisions carried out by the leaders.

Even if results and actions are yet to appear, they are expected to be noticeable in the years preceding and following 2030, the presence of Vision Plans and role of funds is important as they target specific core issues that are behind rentierism.

By Yasmina Dionisi


Ibrahim Ibrahim, “Qatar’s economy: Past, present and future” (2019), 5d5cc488002a57ebd96613bd2ef1bdfe6d49.pdf (semanticscholar.org)

Anne Louise Artun, “The Political Economy of the United Arab Emirates” (2002), The Political Economy of the United Arab Emirates (uio.no)

Crédit Agricole Group, “Kuwait. Economic and political overview”, Economic and political overview in Kuwait (groupecreditagricole.com)

Steffen Hertog, “Segmented clientism: the political economy of Saudi economic efforts” (2006), (PDF) Segmented clientism : the political economy of Saudi economic reform efforts. (researchgate.net)

Geoffrey Wilson, “Oil, Rentierism and the Arab World”, Oil, Rentierism and the Arab World (susqu.edu)

Saudi Arabia Public Investment Fund (2021-2025), https://youtu.be/zzHuWw7mu0c

Saudi Arabia Vision 2030, Economy & Business – Vision 2030

Abu Dhabi Economic Vision 2030, https://www.actvet.gov.ae/en/Media/Lists/ELibraryLD/economic-vision-2030-full-versionEn.pdf


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