GCC Oil Wealth: The Power and the People
Across the GCC, oil income has driven growth, development and the longevity of the ruling families. It has enabled the ruling families to maintain a social contract based on economic benefits in return for political acceptance. Uncertainties about the sustainability of oil-driven economic growth models and their impact on social compacts across the region have been raised amongst policymakers and citizens of the region. As a result, pressure has been mounting for some time to reduce dependency on oil by diversifying the economy and instituting structural reforms. Policymakers are increasingly repurposing assets that traditionally have been managed through Sovereign Wealth Funds towards domestic and regional needs in order to maintain the status quo at the time of lower oil prices. Sovereign Wealth Funds remain active in international markets, while they are being readjusted to ensure sustainability in terms of returns, income and operational capabilities. This chapter reviews the changes and the challenges of oil wealth management in the region.