Can Gulf states adopt universal basic income?
Existing social welfare systems have insulated Gulf nationals from changing economic realities and the likelihood of a major global energy transition in the coming decades.
The era of endless oil demand growth is over, oil major BP predicts, and so would eventually be whole segments of generous welfare systems that have long played a central role in the Arab Gulf region, creating a solid middle class and shaping every facet of modern life.
During the five years following the 2014 oil crash, Gulf Cooperation Council (GCC) countries accumulated over $500 billion in budget deficits. Therefore, in the coming years, an economic transformation could be vital to preventing a decline in social spendings.
“I have to admit that some policymakers in the Gulf are moving to modernize the social safety net that they have,” World Bank Gulf country director Issam Abousleiman told Al-Monitor, noting the “huge determination” of some countries to work on this transformation. According to him, Saudi Arabia’s long-term reform plan Vision 2030 aims at creating a “modern social safety net that takes care of the less fortunate.”
Ali al-Salim is the co-founder of the investment consultancy firm Arkan Partners and the author of an October report that suggests streamlining Kuwait’s oil-revenue distribution mechanism by granting citizens a universal basic income.
