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Monetary Fund: The financial wealth of the Gulf countries may be depleted within 15 years DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Monetary Fund: The financial wealth of the Gulf countries may be depleted within 15 years

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Monetary Fund: The financial wealth of the Gulf countries may be depleted within 15 years Empty Monetary Fund: The financial wealth of the Gulf countries may be depleted within 15 years

Post by claud39 on Fri Feb 07, 2020 8:43 am

Monetary Fund: The financial wealth of the Gulf countries may be depleted within 15 years




07/02/2020





Monetary Fund: The financial wealth of the Gulf countries may be depleted within 15 years Rc_158105996823_23





The International Monetary Fund said that the Arab Gulf states - which are among the richest countries in the world - may exhaust their financial wealth within the next fifteen years in light of the decline in oil and gas revenues unless the pace of financial reforms is accelerated.

The six Gulf Cooperation Council states - whose monetary fund estimates a net worth of $ 2 trillion - contribute more than a fifth of the world's oil supply, but the region's economies have been hit hard by the drop in oil prices in 2014 and 2015.

While low crude prices pressure governments to collect revenues from non-oil resources and remedy their financial conditions, "the impact of low oil and gas revenues has not yet been fully offset," the IMF said in a report.

"In light of the current financial situation, the existing financial wealth of the region may be exhausted in the next fifteen years," he added.

The Washington-based international lender said global oil demand could peak in 2040 or sooner if regulatory efforts to protect the environment and rationalize energy consumption are strengthened.

"All the countries of the Gulf Cooperation Council recognize the fixed nature of the challenge they face ... However, the expected speed and size of these financial control measures in most countries may not be sufficient to stabilize their wealth."

For decades, the Gulf states mobilized their wealth of energy resources to provide employment opportunities for millions of citizens, within the framework of a social contract that rewards rulers according to political compliance and academic achievement for life-long jobs.

But private sector jobs with high wages that require little effort from workers have resulted in lower productivity and a culture of eligibility without justification, as well as high costs with population growth.

Budgets are further depleted by generous public spending on subsidies, social services, and pensions.

And the governments of the Gulf states embarked on austerity measures, but only gradually to prevent social unrest, so I took steps such as the introduction of value-added tax in some countries. But most still find it difficult to balance fiscal discipline and growth.

The IMF said that the introduction of value-added tax and selective taxation was a positive step: 'There is a great opportunity to take this progress as a base that can be built upon.

"As the region shifts towards a non-oil economy, its shift from diversified fees to less widespread taxes, for example, may bring in much-needed income diversification."

The fund said last month that Kuwait - which owns one of the largest sovereign funds in the world - may need funding of about $ 180 billion over the next six years in the absence of more radical financial measures.
Saudi Arabia, the largest Arab economy and the world's largest oil exporter, expects a deficit of $ 50 billion this year, up from $ 35 billion in 2019.





http://www.uabonline.org/en/news/arabicnews/15891606158316081602157516041606160215831575160415/72678/0
claud39
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