Time to spend wisely…

With oil prices topping $70 per barrel, and Gulf budgets this year mostly pegged with the premise that the price per barrel would be averaging $30 in 2005, Gulf states have a windfall of $40 per barrel to play with. In laymen’s terms:

Bahrain would reap in an extra US$2.9 billion
Qatar would reap in an extra US$13 billion
Oman would reap in an extra US$14.6 billion
Kuwait would reap in an extra US$29 billion
UAE would reap in an extra US$35 billion
Saudi Arabia would reap in a whopping extra US$138 billion in a year’s production!

Now as all governments in these countries have amply demonstrated that they are not up to the mark in as far as managing money and huge infrastructural projects, in my mind it makes an enormous amount of sense to let the private sector take care of all this extra dosh, and let the governments govern the way that it’s spent. At least with the private sector handling the infrastructural projects, there should be more transparency.

Other than this and maybe just as important, let’s have a plan. We don’t want this windfall to disappear without anything showing for it in a few years’ time when this bubble bursts.

Revenues of Gulf producers have shot up as world oil prices soar; enabling them to launch expensive projects, but economists said Wednesday they had failed to use the windfall to ensure continued economic growth. Gulf Arab producers, joined in the six-member Gulf Cooperation Council, are set to reap revenues of around $265 billion from oil this year, said Jassem al-Saadun, head of Kuwait’s Al-Shall Economic Consultants.

The estimate is based on an average price of $50 a barrel and combined exports of 14.5 million barrels per day (bpd), Saadun said.

But with crude trading above $70 a barrel in New York, Saudi economist Ihsan Bu Hulaiga said the estimate was based on “conservative figures” and Gulf states’ income from oil sales could be even higher.

Saadun said Gulf states would earmark part of the income on “infrastructure projects in the fields of health, education, electricity, water and oil, which have been blocked for some time.”
The Daily Star

figures above were based on various oil production sources on the internet. The premise of daily production in the Gulf is: Bahrain 200kbpd, Qatar 900kbpd, Oman 1mbpd, Kuwait 2mbpd, UAE 2.4mbpd, Saudi Arabia 9.5mbpd

Comments

  1. kategirl

    Time to spend wisely…

    Bahrain will get a benefit uf USD 2.9bn if the price of oil continues to average at USD 70/barrel for the rest of the year. Are people really forecasting the price to stay this high for the rest of the year?

    But yes Bahrain will still get a decent of extra pocket money. If use a conservative estimate of USD 50/barrel average for the rest of the yr then the windfall comes to USD 1.46bn .

    If we divide that number into the nnumber of citizens (453,237; est for Jul 2005 in CIA factbook) that means everyone gets a bonus of USD 3,221 (BD 1,214) !! Yay! Which MP will be the first to propose this to the parliament when it reconvenes??

  2. mahmood

    Re: Time to spend wisely…

    don’t you go giving them ideas now… let them spend it on fixing the roads in Diraz (well, it doesn’t have any at the moment so their job is even easier as they would have to just build roads there first!) or invest it in the Northern City (I’m calling it Shaikh Salman Town for now, and deservedly so) rather than pay a once off gift which might well be needed by a lot of people, but it’s best to invest in infrastructure while we can.

  3. anonymous

    Time to spend wisely…

    with the rate the US dollar is falling, and dragging us down with it, this won’t even compensate for the items our country buys from europe and asia…

  4. anonymous

    Time to spend wisely…

    If I were the boss over there, I would put on a huge feast for all the people – I would slaughter thousands of sheep, goats and cattle and everyone would feast.

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