Charity begins at home which is why, writes Ayman El-Amir*, the accumulated surpluses amassed by Gulf states on the back of rising oil prices should be invested locally Italian novelist Alberto Moravia once expressed his misgivings about the sudden surge of wealth in Italy during the 1980s after years in the economic doldrums. "To spend money, you have to have culture," he remarked in a Newsweek interview, adding "and to make money you have to have competence". His words seem appropriate for the new surge in Gulf Arab states' oil wealth and how it is being spent, especially now that the price of a barrel has passed the unprecedented $90 mark. For various geo-strategic and security reasons it may be justified for the Gulf Arab states (Saudi Arabia, Qatar, Oman, Kuwait, Bahrain and the United Arab Emirates) to lend a helping hand to the United States that would mitigate the impact of its current recession by doling out billions of dollars to acquire new arms. Spending approximately $50 billion on arms purchases that will create thousands of jobs in the US arms industry in the next few years is a good Samaritan act for a special friend. Certainly, it will partly offset the $190 billion defence appropriations budget the Bush administration is requesting from Congress to help US forces kill more Iraqis and Afghanis. Charity, however, begins at home. It would be equally charitable for Saudi Arabia, for example, to try to restructure its job market to absorb the estimated 74,000 unemployed Saudis, almost 12 per cent of the total workforce. More than 60 per cent of Saudi Arabia's estimated population of nearly 24 million is under the age of 25 -- the prime age for education and employment. International reports indicate that population growth in the kingdom far outpaces the spread of oil wealth per citizen, which is why per capita income in Saudi Arabia is 43 per cent of that in Qatar and a little more than half of that in the United Arab Emirates. Saudi Arabia might be investing $200 billion over the next decade to develop new urban centres and economic zones, but the problem is far too deep-seated in GCC states for that to make much difference. The rise in oil prices and gas revenues, which have earned the six GCC member countries an estimated $1.5 trillion between 2002-06, have not created the much needed job opportunities for an educated young generation. Economic growth indicators are falling to an average of seven per cent -- less than what Egypt hopes to achieve in 2007, let alone China or India. Stock market speculation is creating the false impression of an expanding, vibrant economy, but what it amounts to in reality is cumulative personal wealth for some and financial ruin for others. Except for Western expatriates job opportunities are decreasing, not rising. Unemployment in the midst of such an unsurpassed era of wealth is a dangerous phenomenon that could lead to social instability across the region. The dazzling Dubai skyline does not tell the whole story. Most of the employment opportunities created in GCC countries over the past five years have been government-generated jobs that cost more than the value they add. They are regarded by GCC nationals as a way to share in the geological coincidence that underpins oil wealth. But it does not seem the boom will continue forever and some estimates expect oil production to decline by as much as 50 per cent by the year 2030. That is why part of the windfall oil profits are seeking new investment markets in Asia and Africa, in addition to the $100 billion that will be invested in domestic infrastructure over the next few years. Some GCC countries, like the UAE, now understand that charity begins at home. It has decided to buy a franchise package of the Louvre for an estimated $1.3 billion, including $520 million to use the name and $747 million for art loans and special exhibitions over a period of 30 years. This will be only part of a greater tourist and cultural attraction to be built on Saadiyat Island, opposite Abu Dhabi, at a staggering cost of $27 billion. The UAE's cultural indulgence would be even more charitable if it took a closer look at Arab cultural heritage and its contribution, recognised by serious Western scholars and historians, to the Renaissance and Western civilisation. The UAE's cultural selections from the Louvre, the Georges Pompidou Centre, the Musée Rodin and Versaille will bring Western culture to the Arabs. But who will bring the historic cultural and scientific treasures of Al Maamoun's Bait Al-Hekma (The House of Wisdom) and the great Library of Baghdad back to life for the benefit of curious Westerners? Who will reveal the great contribution of the House of Wisdom to Western knowledge, or how Hunain ibn Ishaq, a Christian, oversaw the translation from Greek of the works of Aristotle and Plato into Arabic, or how the seven volumes of Galen's Anatomy and all the other great works of philosophy, medicine, astronomy and mathematics reached Western Europe in Arabic through Sicily and Andalusia? What exhibition will present the Arab invention of Algebra, itself an Arabic word, or spherical trigonometry and logarithms (a corruption of the name of the man who invented it, Al-Khuwarizmi )? And how can this knowledge impact on the average European or American who believe that Islam is a religion of cruelty and terrorism? Egyptologists claim that Egypt is home to a third of the world's cultural heritage, most of which remains entombed or is stored in archaeological warehouses waiting for museums to be built to house them. Could not some of these treasures of human civilisation find a place in the envisioned museum? Would it not be to the credit of both the Louvre and the UAE to build a museum of human civilisation in all its forms and from all epochs of history? Will the Abu Dhabi Louvre earmark a budget to fund archaeological excavations in the rest of the Arab world, in Egypt, Syria, Iraq and Jordan? Will it dig deeper into the Arab cultural tradition to bring to light outstanding contributions that have been denigrated by decades of colonial domination and ingrained low self-esteem? The current boom in oil and natural gas wealth, concentrated in the Gulf Arab region, is the second in 30 years. The first oil bonanza of the mid- 1970s represents a lost opportunity that it is now hard to account for. It was reported at the time that the accumulated Arab surplus (estimated then at $400 billion) could have purchased half the stocks on the New York Stock Exchange. But there were also some wild stories about extravagant spending patterns by irresponsible sheikhs and emirs who threw away fortunes in casinos, bought European chateaus and American mansions, and spent lavishly on women and thoroughbreds. Astounding fortunes were accumulated by a favoured few from commissions on arms purchases, contracts with foreign corporations and construction projects. Gifts presented to foreign leaders to buy political favour far surpassed the gemstones the last Shah of Iran, Mohamed Riza Pahlevi, used to give his guests. Countries like the UAE, Qatar, Bahrain and Oman came late to independence. By the mid-1970s they had been sovereign states for only a few years, with little experience of fund management and lacking the expertise to handle their cascading mountain of wealth. Some ambitious New York bankers and officials of international financial institutions made successful careers out of pushing huge oil money loans on impoverished countries in Africa and South America which did not have the vaguest idea how to use them in development projects. This accounted in large part for the disastrous "odious debts" that bedevilled poor developing countries for decades as the interest on loans ate up a sizable slice of their GDP, further depleting their scant resources. And all this is apart from the billions skimmed by corrupt African, Asian and South American dictators to beef up their foreign bank accounts. The oil and gas bonanza is not sustainable, not even in the medium-term. The price per barrel will soon exceed $100, which will be unaffordable for developing countries. China and Japan have a voracious appetite for hydrocarbons and a further rise in prices driven by increasing demand could lead to global inflation followed by deep recession. Besides, industrialised countries are seriously seeking alternative, non-fossil fuels, at least to cut down on their oil bills. All the more reason that serious thought be given to investing these riches in other countries of the Arab Middle East to achieve mutually-beneficial, collective and sustainable Arab prosperity. * The writer is a former correspondent for Al-Ahram in Washington, DC. He also served as director of UN Radio and Television in New York.
