Interesting column in The New York Times from Kenneth M. Pollack, of Brookings Institute, on how many of the oil producing states are creating problems through the way they invest their new oil riches. Notably, he excludes Saudi Arabia, praising King Abdullah’s initiatives to build ‘economic cities’ and new universities like KAUST to address the jobs/demography problem.

Pollack points out that investing for short-term profits will not solve the problems. Too many young people need jobs and automated factories and investing overseas won’t fix them. Worth reading.

Drowning in Riches
Kenneth Pollack

YOU might think that $140 per barrel oil would be good for at least one part of the world, the Middle East. It’s too soon to tell for certain, but the region may well turn out to be the part of the world that suffers the most.

As painful as the current (or coming) oil-driven recession will be for Americans, it does seem to be convincing us to make the sacrifices necessary to diminish our reliance on oil. Over the long term, that could prove a huge boon for our economy, our environment and our national security.

In the Middle East, the situation may be reversed. Right now, the region is experiencing an economic boom, creating the opportunity to address the deep-seated political, economic and social problems that have spawned terrorist groups like Al Qaeda. That’s certainly what the people of the region hope.

The danger is that the way that the rising revenues are being spent will more likely worsen the region’s instability over time.
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