Beyond Oil

It has been known for quite a while now that the world’s oil and petroleum reserves are set to be fully utilised by the year 2050. Not only this, but the world is moving towards renewable energy, which is detrimental to most OPEC countries, given that more than half of their economies are funded by their oil reserves. In this grave time, many OPEC nations have decided to try to diversify their economies not to be as dependent on oil and survive the inevitable ‘oil money crash.

The prime examples of such countries are Saudi Arabia and the UAE. Saudi Arabia is set to become the new sports capital of the world. Having spent upwards of 1 billion dollars on their football league, the Saudi Pro League alone, Moreover, they are also set to host multiple UFC fights, the WWE Crown Jewel Event, and multiple Formula 1 races. They have spent a lot of money just to develop infrastructure for many of these events and more. Not only that, but their bid for the FIFA World Cup 2034 requires them to develop infrastructure just like Qatar had to do for the 2022 World Cup, something that can put a lot of strain on their economy. All of this is in an attempt to boost the amount of tourism in their country, making them a hub for entertainment, leading to the sustainable development of their economy and a fall in their dependency on oil reserves to fund their whole economy. Ranked as the 17th largest GDP in the world, their aims are summed up in Vision 2030, a society that can only be described as utopian, but just halfway into the project, much of their economy still depends on their petroleum reserves, raising questions about the probability of this project even succeeding.

In the current status quo, a large 50% of the UAE’s economy runs on its oil and petroleum reserves. For the last decade, the UAE has focused a lot on tourism, building large monuments like Burj Khalifa and Dubai Frame, luxury hotels like the Burj-Al-Arab and Atlantis, and even many theme parks like Ferrari World, WB World, Aquaventure Water Park, and many more. All of this, along with a lot of money spent on advertising, has made the UAE one of the most tourist-packed places in the world, despite its lack of natural beauty and good weather. They aim to double their economy by the year 2033 and achieve a zero-carbon footprint by 2050, both very difficult tasks to achieve. All of this is to ensure the sustainable development of the UAE and to lessen their dependence on their already-depleting oil reserves. Ranked as the 29th largest economy in the world, the UAE plans to rely on tourism for most of its economic goals in the future and is using the money it earns from oil exports right now to build infrastructure and secure those goals.

A country cannot stay rich and its economy keeps growing off of just natural resources because that is not sustainable development. For sustainable development, the diversification of monetary streams is key, and right now, the same is the case for oil- and petroleum-producing nations. For them to keep their economies afloat, they need to invest in diversifying their monetary streams because oil is a sinking boat, and if they want to survive, they must have more revenue streams that can keep the economy afloat even when the oil market has taken a gigantic hit.

With the introduction of renewable energy and the Paris Agreement on climate change, the day when the use of petroleum becomes minimal is not too far. Many OPEC nations have already realised this, and all the other countries must also follow the same path very soon. OPEC countries have always been some of the richest countries in the world, but change is necessary. If they cannot adapt and put all their efforts into new streams of revenue, their wealth may just become a relic of the past, and the Middle East may become just a desert once again