Arab oil states: the devil's in Opec's data
The group's latest figures show Gulf oil states' earnings have plummeted, while the region's population keeps rising
The urgent need for Arab oil producers to introduce economic reforms that lead to financial savings and new jobs is clearly shown in
Opec's 2017 Between 2012 and 2016 the populations of the seven states (Algeria, Iraq, Kuwait, Libya, Qatar, Saudi Arabia and the United Arab Emirates) grew by 10% (see table). Annual Statistical Bulletin.
Yet the ability of these states to cope with the continuing rise in the number of inhabitants has declined because over the same period revenue from exports fell by 45% (see graph).
The biggest population increase
—a rise of 3.676m —was in Iraq, where the public purse is already being hit by low oil prices, expenditure on the war against Islamic State (IS) and the need to provide for thousands of homeless people. Algeria, which is struggling to attract new investors in the oil and gas sectors, was close behind with a 3.305m rise.
The population of Saudi Arabia grew by nearly 3m between 2012 and 2016
—when the kingdom's Vision 2030 was unveiled. This programme aims to lessen Saudi Arabia's dependence on oil revenue and to create thousands of new jobs. Given the high demographic growth rate, finding employment for young Saudis in the years ahead presents an enormous challenge.
Plunging export revenues
For all the seven states, the task of coping with more and more people arriving on the jobs market is being made difficult by the calamitous drop in export revenues. The collapse of global oil prices, which began in 2014, led to a serious drop in earnings during the subsequent two years.
Algeria, which took in $77.12bn in export revenues in 2012 saw the figure plunge to $29.05bn last year. Iraq's earnings also more than halved, tumbling to $43.89bn, while Kuwait's revenue
—which was $114.52bn in 2012 —had shrunk to just $46.26bn only four years later. The loss of its 230,000 barrels a day half-share of Neutral Zone production since 2015 —because of a dispute with Saudi Arabia —hasn't helped.
Even Saudi Arabia's export revenue has plunged. In 2016 the kingdom's exports were worth $179.58bn, down from $388.4bn just four years earlier. The UAE fared better; its 2016 figure of $298.65bn was down only $61.08bn on the 2012 level.
With no sign of either a significant revival in oil prices or a slowing in population growth rates, the need for economic reform is ever more pressing. For some Arab states, it's becoming a matter of fending off social unrest. For others, it's a matter of survival.
On the rise: population increases in Arab Opec members (m inhabitants)
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