It is a rare opportunity for the countries of the Middle East

According to the International Monetary Fund, the countries of the Middle East, especially the countries of the Arabian Gulf, will earn an additional amount of 1.3 trillion dollars in the next four years, as a direct result of the increase in oil and gas prices.

It is indeed a rare opportunity available to energy producing countries in the Middle East, in a period when until recently expectations indicated a decline in the importance of fossil fuels, due to the availability of potential alternatives to them, and an urgent need to reduce pollution to improve the environment and stop global warming. Such opportunities, which are not always repeated, provide the necessary capital to modernize the economy, diversify sources of income, rehabilitate the workforce, reform the education system and raise the level of services.

In an interview with the British newspaper “Financial Times”, Jihad Azour, director of the Middle East Department at the International Monetary Fund and former Lebanese finance minister, called on countries that benefit from high energy prices to take advantage of this rare opportunity to “invest in the future”. warning that this could turn into what is known economically as pro-cyclicality, or “pro-cyclical tendency”, in other words, that additional funds, if not used for studied development purposes, will reinforce current trends in the economy, which may cause unforeseen distortions .

The Arab Gulf countries in general, and Saudi Arabia and the UAE in particular, have managed to invest oil money in diversifying the economy and gradually moving it away from dependence on oil, which no longer accounts for only 46% of Saudi GDP, while it accounts for only about 16% of GDP- and the UAE.

In addition, all the countries of the Arab Gulf established sovereign investment funds fifty years ago, in which excess capital is placed and invested in profitable national and international projects, in order to develop them and make them available to future generations. There is no doubt that additional funds will be invested this time in new and innovative areas. In this sense, the Gulf countries represent a successful example that deserves imitation.

Once again, this opportunity will not be repeated, so investment must be made in rebuilding the economy on sound scientific foundations and moving away from total reliance on natural resource revenues.

Among the Arab countries that have the right to profit from the increase in energy prices is Algeria, which has large gas reserves estimated at two billion and four hundred thousand cubic meters, and its proximity to Europe and the presence of the “Transmed” gas pipeline across the Mediterranean are two important factors that will help this large country enable the export of gas and oil and the investment of funds obtained from them in other sectors of the economy, especially tourism, services and light and medium industry, which would reduce poverty and push towards social and political stability, and even economic excellence.

Algerian President Abdelmadjid Tebboune assured his guest, former Italian Prime Minister Mario Draghi, during his visit to Algeria in mid-July to sign an agreement on the export of gas to Italy, worth four billion dollars, that Algeria “will be one of the most important suppliers of conventional and electrical energy in Europe .” .

The Algerian company Sonatrach recently announced that it had discovered two new gas fields and a third oil field in cooperation with the Italian company Eni. Sonatrach said in a July 25 statement that the first field in the southeast of the country produces 513,000 cubic meters of natural gas per day and 45,000 cubic meters of liquid gas. As for the second field, it did not specify the volume of its production, but said it produces significant quantities.

And if Algeria uses its doubled new oil and gas revenues to develop, diversify and modernize its economy, focus on aspects that can differentiate it, reduce unemployment and provide services to its 44 million inhabitants, then it will make great progress in becoming a strong and important country on a global scale.

Iraq can also benefit greatly from this opportunity, especially as it develops its gas fields and seeks to invest in oil-related gas, which has been burning in space for a hundred years, polluting the environment and causing serious illness in Iraq’s oil cities, especially the city of Basra, which has four million people, produces more than 80% of Iraq’s oil, and the environment is seriously polluted and respiratory, skin and cancer diseases have spread, as a direct result of pollution from the oil sector. .

Iraq is currently producing 4.1 million barrels per day, as its output fell from 4.78 million barrels per day in 2019. Nevertheless, the funds currently obtained from oil exports are large by any standards and can lead to a radical and qualitative change in the Iraqi economy, if invested in modernizing the economy and increasing the efficiency of the manufacturing and service sectors.

However, under the current circumstances, it does not seem that Iraq will benefit from this rare opportunity, especially given the weakness of the government, whose finance minister Ali Allawi resigned a few days ago due to widespread corruption and limited powers, as the interim government is more of ten months, as well as the raging conflict between political groups that have shared power since 2003, a conflict that threatens to erupt into a bloody and destructive conflict if the situation gets out of control.

In any case, these conflicts have disrupted the work of state institutions, and fueled despair in the hearts of Iraqis about the possibility of overcoming differences and forming an effective Iraqi government that promotes the economy, streamlines security, improves services, reduces unemployment, and treats all Iraqis fairly and justly.

But groups fighting over power and wealth, and after failing to resolve their differences and agree on power-sharing, resorted to throwing their followers into the streets and squares to intimidate each other. The leaders of these groups, whose thoughts belong to ancient times, do not think about the Iraqi state, and most of their attention is focused on their personal future, and the possibility of remaining in power, in order to share the rentier’s wealth. , which falls to them without effort, effort and planning. Many of them did not study in fundamentalist academies or universities, but rather received their education in seminaries and schools which they founded on primitive foundations in order to pretend to know and deceive the simple.

Even if these forces agree on a certain formula, and I think they will, because the disagreement between them is not about the public interest, nor how to serve the state and society, but about the “fair” distribution of the spoils, according to the results of the recent elections. , the extra money will go into the pockets of the corrupt and into the treasuries of other countries, and Iraq will continue to falter and fail to fall prey to greedy outside powers, which could find a foothold because of a handful of deceived ideological followers.

Another country trying to take advantage of this historic opportunity is Egypt, which is trying to rationalize energy consumption in order to secure gas for export. Prime Minister Mostafa Madbouly said his government plans to cut spending, including reducing street lighting and sports facilities, and reducing cooling in public places, to secure gas for export purposes and help other countries meet their energy needs.

Egyptian exports account for 3.2% of the total global demand for liquid gas, which is a low percentage, but the discovery of new offshore fields has raised Egypt’s global importance in the energy sector. Egypt’s energy revenues approached $4 billion in the first four months of 2022 alone. Madbouly says Egypt is trying to tap into its natural resources to boost its foreign exchange reserves.

According to the international economic magazine “Quartz”, the rationalization of electricity consumption in Egypt will save a third (570 thousand cubic feet) of gas, or the equivalent of 1.2% of the global demand for liquid gas, a percentage that will not greatly affect the global energy balance, but positively affects the balance of the Egyptian economy. The magazine believes that due to high prices in Europe, Egypt will shift its exports from Asia to Europe in order to make the most of its financial resources.

There is also an agreement between the states of Sudan and South Sudan to increase oil and gas production, with the aim of taking advantage of rising global energy prices. The oil ministers of the two countries met earlier this month in Juba and resolved many of their mutual disputes, according to the “transitional financial agreement” of the two countries, and agreed that neither of them would take unilateral decisions that could affect the oil sector in the two countries. countries, and the ultimate goal is to leave the past behind, turn to the future and take advantage of rising energy prices.

The global energy crisis presents a rare historical opportunity for the countries of the Middle East to use their natural resources and invest the capital generated from them in modernizing and diversifying their economies, raising the efficiency of their workforce and taking advantage of potential economic opportunities to serve their people, in order to catch up with the global community. .

It is a rare opportunity to dismantle the rentier state that caused the corruption of political systems and the creation of destructive dictatorships that contributed to the weakening of states and the impoverishment of societies. All officials in the Middle East and North Africa countries seem to understand the value of this opportunity, and are ready to seize it, with the exception of the historically conflicted groups in Iraq, who will miss this opportunity, as they have missed other valuable opportunities.

Leave a Reply

Your email address will not be published. Required fields are marked *