Start buying camels — a Middle Eastern storm is brewing.
Tags: Oil, Greed, Money, Oil And Gas, Middle East

Arab oil money is being spent and running out at an alarming rate. Much of current and next generation in the GCC lack a strong education, never earned a dollar, and wouldn’t know a failed economy if it hit them in the wallet.

Camel Beauty Content — Miss. World

Almost two decades in GCC countries has been an eye-opener. Economic growth, new state of the art buildings, advanced technology, new developments, astounding global investments, tallest buildings in the world, the largest aquarium in the world (don’t ask why), largest this, largest that, tallest, newest, and shiniest. If I didn’t know, I would think this was referring to a child who had just opened his new Lego box for Christmas and started building. The reality is just a flight away. However, one must not forget one fact: it’s Arab money and not brains that made this. The dream has been made reality with the brain and braun of other nations. Most GCC companies may have visible Arab board members, but they are just the faces on the outside. The actual work is done by mostly Indians or Western expats who have created and manage the business’.

The UAE is no doubt an astounding development in 20 years, and a place where many workers call home, although it will never become a permanent home as citizenship is not awarded to non-nationals (some exceptional cases exist), and after spending a lifetime earning and helping the nation, one is ‘kicked out’ once retirement age looms. The UAE and the GCC is the playground of the young. I never once in 20 years saw a disabled Arab in a wheelchair, or the elderly wandering the streets for a walk. Nothing like India, where the difficult conditions, harsh weather, and never-ending battle for success make a 15 year old student look like a 50 year old. I guess the young Arabs age well; but why wouldn’t they? They wouldn’t even know on which side to put gasoline in their luxury cars, or how to push a shopping trolley or even how to look after their own children. All is done courtesy of Indians, Filipinos, Indonesians, Ethipians, Sri Lankans and the list goes on.

The wealthy and smart handful of Arabs send their children to universities abroad. But these young Arabs are not going to the top universities in UK or USA; rather they are entering the lower rank universities that welcome the less-competent but those with deep pockets. They spent a few years bringing over their cars and designer luggage, and after a few years return home, having learned less than what they knew before. Even the ambitious and wealthy expatriates send their children to schools/universities outside the GCC, as that is seen as a second-rate education. Teaching a British curriculum without the British culture, much the same as having Eton set-up shop in Saudi Arabia. One cannot quite visualise that.

The growth of the GCC has been a blessing for many nations as well. The remittance from this region to India, Nepal, Bangladesh, Philippines, Pakistan runs into the billions. Treatment of many of these people is not a topic I am covering here, but suffice to say that when a young child (Arab) hasn’t been shown any love or neglected by their parents, because its too much trouble for the mother, then what affection or gratitude will they show to other nationalities and workers? Selfishness breeds selfishness. The men may marry 5 different women, but they are all unlikely to want to look after children or even know what to do. Give them a few million dollars surely? Let them buy the school?

I have many friends who are settled in the GCC countries, and enjoy their lives there, as their lifestyle is far better than it would be in their native countries. No taxation, no rain (changing now), cheap fuel, cheaper living costs are the foundations on which many people have moved to the UAE. However, for many, this is a stepping-stone, a pause in their life, whilst they make money and remit it back home, so that their families can enjoy now and in the future. I have a dear friend, who is closer to me than most of my relatives; Arun. Arun has been working in the UAE for over 15 years. Married and now a proud father to a son, he too works in the oil and gas sector. Before his marriage, he shared a tiny room with 2 others in the UAE; living in squalor conditions that I found hard to comprehend. Such is an Indian batchelor’s life in the UAE. However, I attended his marriage in Kerala, and I wondered how his family lived. I was beyond shocked to see a mansion in Kerala near the back-waters. A lovely abode where Arun’s parents were happily living. A mixture of remittance, perseverance, sacrifice, long-term vision, resilience. Arun has also realised that his time in the UAE is becoming stale. It’s time for a change. Education is not great, the future is limited as UAE will never be home. But his skills are needed in a country where the locals want to do nothing but sleep all day and drink coffee in the evenings. Most nationals curse the young Arabs as they are lazy, disrespectful, uncultured, don’t have family values, and jobless. Other nationalities laugh at the mess that the GCC has got itself into, but enjoy it, as it has created an opportunity. Many people are beginning to leave the GCC and settling back in their native countries. Wage inflation in India coupled with opportunities is welcoming back the expatriates. Many expatriates will migrate to UK, Canada, USA, Australia.

I have to admit that the only country that is an exception to the rule is Oman. A beautiful country. Lovely people. The locals are down to earth and have to work for a living. Lovely country for holidays and most welcoming people.

These GCC petro-states act like bottomless money pits putting out fires for other economies and using their money to buy friends and seen to be in control or taking control, i.e. OPEC. It was $23billion of GCC money that kept the Egyptian economy from collapsing in the wake of Abdel Fattah al-Sissi’s coup.

My opinion is shared by the IMF; the GCC coffers are running out of money. The current oil price does not help at all. Their $2trillion of cash will be gone in 15 years. With Denmark and soon the UK and others moving to renewable energy sources; this could be the start of the perfect storm.

Oil profits can no longer pay the bills. The GCC states know this and have begun to wean themselves off oil. As the IMF points out, GCC governments now get 80 cents for every $1 of hydrocarbon GDP they generate, while the rest of their economies generate just 10 cents to the dollar. The Gulf is not only a gargantuan ATM but a giant employment agency for the Arab world, too, providing jobs for some 25 million Egyptians, Lebanese and Palestinians who can’t find work at home.

Saudi Arabia relies on oil revenues for 87 percent of its budget, and oil-related industries account for 42 percent of its GDP. It introduced a 5 percent value-added tax (VAT) in January 2018 to improve non-oil revenue generation after a plunge in oil prices from mid-2014 bruised its revenues. However, the IMF suggested Riyadh raise the VAT rate from 5 to 10 percent last year. Furthermore, the Saudi monarchy has continued to increase its government expenditure in recent years. For example, the 2020 report of the Stockholm International Peace Research Institute (SIPRI) said: “Saudi Arabia was the world’s largest arms importer in 2015–19.”

Their budgets don’t add up anymore. Algeria needs the price of Brent crude, an international benchmark for oil, to rise to $157 dollars a barrel. Oman needs it to hit $87. No Arab oil producer, save tiny Qatar, can balance its books at the current price, around $40. One indication of bad investments is the decline in the relative value of sovereign wealth funds. Big brother Saudi Arabia now finds itself dwarfed by its much smaller Gulf neighbours on that score. The chief sovereign wealth fund, Public Investment Fund (PIF), ranks at 11th in the world, behind Abu Dhabi Investment Authority, Kuwait Investment Authority and Qatar Investment Authority. When sovereign funds are pooled by nation, UAE comes first with funds worth $1.213 trillion then Kuwait with $522bn, Qatar with the $328bn and Saudi with $320bn.

Since 2011, oil riches have been used instrumentally to shape the outcomes of post-Arab Spring political processes across the region. Oil-rich governments have supported non-democratic forces, be they Islamist or non-Islamist, Sunni or Shia, creating prolonged and internationalized civil conflicts. In Syria, for instance, Iran threw its weight behind the regime of Bashar al-Assad.

The overwhelming majority of the Arab people do not live in oil-rich countries. The most populous Arab countries are for the most part oil-poor. Many are net energy importers, with relatively diversified economic structures and external sectors. These include Egypt, Morocco, Tunisia, Jordan, Lebanon and war-torn Syria. For these countries, lower oil prices would lower the costs of their production and improve their balance-of-payments positions. Countries like Egypt, Morocco, Tunisia and Jordan already possess diversified export structures, with non-oil goods constituting the bulk of what they export.

Seismic cultural and political shifts are under way in the Arab Gulf monarchies. The political upheav- als and transitions that have swept through the Arab world over the last 2 years have not toppled the Arab Gulf rulers, but did not leave them untouched either. Rulers of Gulf Cooperation Council (GCC) states face heightened internal and external challenges and uncertainties. Pro-democracy protests and calls are extending from Bahrain to other oil-rich countries of the Arabian Peninsula. The expectations of GCC citi- zens, particularly the educated youth, are increasingly moving from socio-economic demands to political ones. They are now not only asking for jobs or wage increases, but also for more political participation and accountability.

I went to a camel farm in Al Ain, UAE. I was introduced to the race camels, each holding a value of $1million. The races used to be run using little boys as jockeys who were light enough to sit on camels. After international intervention, this practice has ceased to exist and the jockey is an electronic machine what whips the camel on a timely basis. The camels run several kilometres as I watched on TV; quite therapeutic when running on a treadmill. Arabs are following their camels along the side in their Land Cruisers. One cannot quite understand the excitement. Perhaps its the prizes. Million dhirhams, a new 4x4, a new home… perhaps the camel dines at a eat-as-much-as-you-can buffet for winning. I did also learn what happens to camels when they are no longer the continuous winners — the owners sell them to put into a biryani for weddings!

Camels also have beauty contests. Maybe its stolen from the British version of Crufts where dogs are given awards. This is seen as strange behaviour in Asia, where dogs are animals for hunting or security….and not dressed up with bows and their hair combed. Here was an instance where dogs/camels are valued more than humans! So, the beauty pageant takes place, though I guess there is no bikini contest; the eyes, eye lashes, long legs, teeth all are key to winning the Miss. World equivalent in camels.

The fate of the GCC rests with the leaders moving away as petro-states and the petro-dollar to become self-sufficient. To stop giving handouts to the young Arabs and let them face the music of reality; let them work. Let them learn how to tie their own shoes laces and manage themselves in the real world. These people need to appreciate the blood, sweat and tears from mistreated workers from poorer nations, without whom, GCC locals would still be pearl-divers and having wooden dhows.

Unfortunately, the world is moving very fast, and selfish attitudes ought to be punished. The money will finish, processing water to make it drinkable will become very expensive, and life will become tough. I would enjoy seeing Arabs going to India to find jobs as fuel attendants, as would many.

Sadly, the collapse of the GCC economy, which for decades has been the engine room of the economy of the whole region, would quickly be felt in Egypt, Sudan, Jordan, Lebanon, Syria, Tunisia, India, Philippines, Bangladesh, Ethiopia, Sri Lanka, Pakistan — all of which send millions of their workers and professionals to the kingdom and whose economies have grown to depend on their remittances.

Perhaps the curse of the black gold is set to finally leave the Middle East. Perhaps the cards will be reshuffled and vast oil or gas reserves found in another currently content nation.

For now, I’m deliberating investing a few dollars alongside others in a camel farm…..the demand will return. The race will not be see who has the latest Ferrari, but who has the camel with the longest legs.

Arabs started with camels hundreds of years ago, and drive luxury cars in the same way, and it’s just a matter of time before I believe the demand will rise again for camels. The good times soon to be gone like the sun setting, the houses lost, expats back to their homes, the young GCC locals wondering where to put gasoline into the camel.