KSA’s pos­toil econ­omy

Pakistan Observer - - EDITORIALS & COMMENTS -

WITH the world’s sec­ond­largest oil re­serves, King dom of Saudi Ara­bia is hardly run­ning out of oil. Yet on April 25 the king­dom an­nounced a plan to make its econ­omy hum along on other sources of wealth. And if that were not bold enough, the dead­line for this trans­for­ma­tion is equally plucky. “By 2020, we’ll be able to live with­out oil,” said Deputy Crown Prince Mo­hammed bin Sal­man who, at age 31, runs the coun­try’s econ­omy and, by the way, idolises Steve Jobs. There may be a les­son in this Saudi au­dac­ity, es­pe­cially for other coun­tries that own am­ple nat­u­ral re­sources but have some­how mis­man­aged them. The les­son is this, at least from Prince Mo­hammed’s per­spec­tive in his de­sign of the plan: Don’t fo­cus on the prob­lems but rather on the op­por­tu­ni­ties.

Saudi Ara­bia has plenty of prob­lems that could paral­yse it. For starters, low oil prices and over­spend­ing have se­verely de­pleted its for­eign re­serves. Sur­round­ing wars and home grown ter­ror­ists worry it. Nearly a third of its youth are job­less. Sim­ply throw­ing solutions at such prob­lems has not worked very well. The new plan in­stead takes a rad­i­cal ap­proach. It en­vi­sions a new so­ci­ety and a fi­nan­cial se­cu­rity based on cre­at­ing op­por­tu­ni­ties. These in­clude set­ting aside as much as $ 2 tril­lion of the coun­try’s oil wealth in a fund for pri­vate in­vest­ment, both abroad and at home. Women will be given in­cen­tives to en­ter the work­force. And non- oil in­dus­tries, such as min­ing and tourism, will be boosted as will small- and medi­um­sized en­ter­prises. At the least, the plan rep­re­sents a wel­come change in ap­proach from the global cam­paign to end a car­bon- based econ­omy and head off dras­tic cli­mate change. In­stead of merely try­ing to break the world’s de­pen­dency on fos­sil fu­els, coun­tries must also cre­ate new pos­si­bil­i­ties for cit­i­zens and busi­nesses. Many lead­ers have tried to make this point. Af­ter the April 22 sign­ing of a new in­ter­na­tional cli­mate change pact in New York, US Sec­re­tary of State John Kerry crit­i­cized those who said the pact does not go far enough. “The power of this agree­ment is the mes­sage that it sends to the mar­ket­place. It is the un­mis­tak­able sig­nal that in­no­va­tion, en­tre­pre­neur­ial ac­tiv­ity, the al­lo­ca­tion of cap­i­tal, the de­ci­sions that gov­ern­ments make, all of this ... is what is go­ing to de­fine the new en­ergy fu­ture.” This less fear­ful ap­proach may be pay­ing off. Last year, the world saw more in­vest­ment in clean en­ergy than in oil and gas. The Stone Age did not end be­cause we ran out of stones, it ended when al­ter­na­tive options opened for hu­man­ity. — The Chris­tian Science Mon­i­tor

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