EMERGING MARKETS
BY AMY MCLELLAN
OUTDATED ADDICTION Weaning the Middle East Off Oil Dependency
T
he 2014 oil price collapse was a timely reminder for the oildependent economies of the Middle East of what could happen when the age of oil comes to an end. A protracted price slump saw budget deficits balloon, debt escalate and austerity measures bite. Analysts have subsequently said that it is increasingly clear that for these
petrodollar economies, it is not just diversification that is required but whole-scale structural transformation in order to build resilient modern economies and support jobs and living standards. According to the World Bank, infrastructure needs in the region are estimated to be US$100 billion annually, with a focus on electricity generation, transportation, water and sanitation,
and information and communication technologies. These needs won’t be met unless economies can be weaned off an addiction to subsidy and state control. There’s a ticking clock on this reform process. Growing international pressure, supported by fast-paced technological advance, aims to curb the world’s appetite for fossil fuels in order to avert catastrophic global warming later this century.
ABOVE: An expanded refining industry in the Middle East will require a huge amount of power generation.
40 BREAKBULK MAGAZINE www.breakbulk.com
/ CREDIT: AGILITY
ISSUE 6 / 2018
