It is no secret that Gulf countries are known for their oil and gas production. Because of this, quite a lot of people from Asian countries shell out an exorbitant amount of money just to get hold of a work visa in GCC countries, where skilled labour is much needed.

On 3 June 1932, Bahrain became the first country in the Gulf to discover oil in the area of Jebel Dukhan and developed its many sectors intellectually and economically. If a country sounds good economically, most of the other sectors, such as education, health, and welfare, will be developed.  

Initially, finding oil in Saudi Arabia was not easy as the companies were unable to locate it until 1938 after several attempts. Saudi Arabia is the place of Holy Mecca, therefore the government receives good amounts from pilgrims every year, which is one of the main sources of income.
Kuwait discovered oil on its land the same year, but the quantity was not controlled and the well was plugged as a result of insufficient controls. It started exporting oil in 1946, a year that proved to be a fortunate one for the country.

Qatar is geographically the smallest country in the Middle East after Bahrain. It is currently one of the most expensive countries in the world. In 1960, the Idd Al – Shargi and Mayadam Mahzam fields were discovered, but commercially they did not prove to be profitable. Among the largest offshore fields, Bul Hanine was discovered in 1970 and first commenced production in 1972.

It was in 1962 that the United Arab Emirates began its oil journey, as the Abu Dhabi Petroleum Company (ADPC) had been able to produce 14,200 barrels per day (b/d) of oil.  

According to the “Brief History of the Oil and Gas Sectors” report, Petroleum Development Oman PDO’s exploration activities culminated in 1962 with commercial discoveries in the Yibal field followed by giant finds in the Natih and Fahud fields in 1963 and 1964. In 1972, Sultanate produced 300 thousand barrels per day.      

How will Gulf countries cope if 2023 becomes one of the most challenging years economically? Does this mean that governments will curtail many projects if oil prices drop? Will this lead to tariff increases by the GCC governments as well?

Possible sources of economic growth aside from oil in the Gulf region

Economic thoughts, ideas, discussions, and debates need to be applied here by arranging economic debate forums and seminars. Have economists considered developing the fields of agriculture and fisheries? Have governments been able to equip and add skills to their people for success in various sectors? Even so, now is not too late to start encouraging and supporting people to start working in the fields of agriculture, fisheries, SMEs, and other sectors, by teaching and coaching them not to fail easy.

Forming a knowledge-based economy

Governments should have thought about this as there are many countries in the world that survive without oil or with very little oil. 
According to the US Energy Information Administration EIA, of the world’s 216 nations, only 99 have any proven oil reserves, and about 40 nations hold proven reserves that exceed a tiny one billion barrels. One of the areas in which GCC governments did not show much commitment is a knowledge-based economy.

Halt all projects and staff training?

It is not advisable to stop all projects, some of them might be stopped. Before halting or continuing future projects under a crisis, like the recent financial crisis or COVID-19, an in-depth study is required on each project. In case the project generates money in the near future without high risks, then it should not be put on hold or stopped.

It was found that during such financial crises, employees were frequently denied opportunities for training, seminars and workshops, which is a bad practice. With such training, the staff can return with different solutions.  

Disclaimer : The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of TAS and TAS does not assume any responsibility or liability for the same.