The Gulf: Absorption for What?

Abstract

Kuwait, Qatar, Bahrain and the United Arab Emirates have experienced during the last two decades one of the most rapid economic transformations the world has ever seen. The oil bonanza has resulted in their becoming affluent consumer societies, able to purchase the most expensive and sophisticated material goods and services that the West has to offer. Their enormous purchasing power is illustrated by their per capita gross national product levels, those recorded in Kuwait and the UAE during 1976 being $15,480 and $13,990 respectively, well in excess of the level of even the United States, which stood at $7890. As Qatar’s GNP per capita is $14,400, these three Gulf states constitute the richest countries in the world, if GNP is taken as a reliable measure of material wellbeing. Only Bahrain, which unlike the others is not a major producer of crude oil, has a more modest per capita GNP, estimated at $2410, but using this criterion of development, even Bahrain must be categorised with the developed countries rather than as a Third World nation.¹

The productivity of resources depends upon the availability of complementary resources and of a market for the output. This is as true of capital as it is of natural resources. These are … countries which cannot use all the capital to which they have access on easy terms; there is an insufficiency of suitable opportunities for the profitable employment of available funds and of personnel with the required experience and skill.

Peter T. Bauer and Basil S. Yamey, The Economics of Under-developed Countries (1957)