Like the Gulf States
The recently promulgated report of the World Economic Forum dedicated to competition ability of the Gulf States sets forth development outlooks for Bahrain, Kuwait, Oman, Qatar and United Arab Emirates for the period up to 2025. As it turned out, the problems of those countries are very similar to difficulties of Russia, the greater carbon production per capita there notwithstanding.
United Arab Emirates is the most competitive economy in the Arab world and it is at the most advanced stage of development, said the Arab World Competitiveness Report 2007, released by the World Economic Forum. In this race, United Arab Emirates is followed by Qatar and Kuwait.
When it comes to the problems of the Gulf States, they appear to be very similar to the problems experienced by Russia. Both in Russia and in the Gulf States, the governments step up budget costs (social and investment ones) in response to the increase in crude prices. Both here and there, the huge budget surplus (close to 100 percent of GDP in the Gulf States) is likely to give way to budget deficit in the nearest years.
The resemblance of Russia and the Gulf States doesn’t confine to crude oil dependency and cyclic nature of budget revenues. Even in countries with much bigger inflow of crude dollars, the uncontrolled growth in social spending and state investments usually results in mid-term problems of the budget. But the greatest differences in outlooks could be attributed not to the crude prices but rather to the quality of economic policy there.
www.kommersant.com
All the Article in Russian as of Apr. 13, 2007
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