The energy-rich economies of some Arab countries have grown so quickly that they deserve to be considered among the group of most rapidly developing nations in the world, according to a prominent economic study released Thursday.
The countries that form the Gulf Cooperation Council are developing so fast they could be part of the so-called BRIC countries -- made up of Brazil, Russia, India and China -- according to the Conference Board, a Brussels-based business research organization that produces the Consumer Confidence Index.
Now, I'm no economist. Maybe the Emirates Economist can explain this better than this article does, but there seem to be some questionable assumptions being made here. The report says that prior to 2002, the GCC had economic growth of less than 3%. But now this report is projecting growth of 7% per year for the next half century. Yet the growth since 2003 has been based on the rapid increase in oil prices that at least partially due to the war in Iraq, which, God willing, will not last for the next 43 years, as well as increased demand from the developing countries. For the GCC to be one of the 6 largest economies in the world within the next 43 years, wouldn't oil have to continue to be as important as it is now and increasingly costly? And if oil is expensive for a long period of time, say 40 years, then demand should decrease and/or alternatives be developed. You also would need to add in the fact that many of the GCC countries are then sending much of their oil wealth immediately out of the country in the form of remittances by expat workers.
Just as I was wrapping this up, I noticed that John posted a link to an article about a recent drop in quantity and quality of Saudi production, which if true would confirm my belief that the current situation cannot last for another 43 years.