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Reforms still needed in the Gulf

Strong oil prices have buoyed the economies of the GCC. But reforms are still needed

In 2001, Saudi oil minister Ali Al Naimi said $25 per barrel was a fair oil price for both consumers and producers. In 2004, he described $34/b as fair; in 2005, prices above $50/b were "too high"; in 2006, $27/b had become "reasonable"; and in 2008, $75/b was fair. In recent months, $100/b has been Naimi's fair value. This escalation shows the almost limitless flexibility of the Gulf oil exporters' expectations. Their vast oil resources, extended reserves lives and low production costs should give them the luxury of the long-term view. But short-term expediency has too often tempted them from the path of strict fiscal rectitude. Exact budgetary break-even prices for major oil producers ar

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