While the world faces consequences of global warming, the oil-rich economies are facing great threats in the coming 10 years. As the countries depend on natural resources so much, in case of any crisis, their economies could face a lot of problems.
Like Qatar, if other countries will learn to adapt, diversify and develop new industries, to take the problems that the future might bring more lightly.
Others, who will fail to do so, will slowly have to go down to oblivion unless the prices will rise again to a profitable level.
Countries like Saudi Arabia, the world’s most profitable (oil) company, for example, that had a huge decrease in their petroleum exports had experienced troubled economies, more revolutionary riots, a lack of social programs for their citizens, etc. In these cases, finding alternatives could help, for example, solar power. Since Saudi Arabia is located at one of the sunniest places on earth, this could make a huge difference.
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Dropping the prices
Many countries, like the U.S., can benefit from the lower prices, but for the countries that produce the oil, this can be devastating. Previously, the Organization of Petroleum Exporting Countries has agreed to continue pinching oil production, as it is actively trying to prevent a further decline in oil prices.
In recent years, the growth of oil production in the U.S. has resulted in excessive amounts of oil, causing some to question the future of OPEC.
Other than the excessive production of oil, the world faces climate change. As time passes, the effects of it are becoming more and more apparent in the economies of many countries. In the future, countries that are fully dependent on natural resources could face an economic crisis.
In the parallel of threats to the resources, solar and wind power continue to set new low-cost rates, battery costs for processing the erratic production of renewables are declining too, and electric vehicle sales are rising rapidly. New designs of nuclear power plants are also underway which are meant to be cheaper and safer than their forebears.
In this kind of situation, oil-rich economies need to be more creative to ensure their well-being in the coming years.
Lack of reserves
In the case of Brunei, according to the BP World Energy Outlook, oil and gas reserves are expected to run out by as early as 2035. This could be devastating for Brunei since oil and gas account for a whopping 90% of GDP.
In the coming years, it will be very hard for the people of Brunei to get used to the new style of living. As for today, there is no income tax in Brunei and they also enjoy free housing.
As for the United Arab Amirates, they managed to make their economy more diverse, by making Dubai one of the most popular tourist directions in the world. However, 20% of its GDP still stands on oil production.
In addition, a recent report from the International Energy Agency (IAE) has identified the United Arab Emirates as one of the countries most likely to face severe financial pressure in the coming decades as a result of its reliance on oil and gas.
For Nigeria, natural resources are the biggest and most important ways of income. Yet, many analysts have said that in a few decades, the country will be out if its recourses, resulting in a huge economic crisis.
There are several solutions in this situation, but it’s very hard to say which one will work better. By finding other ways to develop their economy, most of these countries can survive the harsh consequences of both climate change and lowering the prices of the resources.