The first three months of 2020 have thrust the Gulf economies into dangerous waters. The deadly combination of a toxic pandemic and the equally toxic collapse of the OPEC+ alliance have provoked wild fluctuations in crude prices, the commodity on which all Gulf countries depend for their principal source of income.
Even at the year’s outset, most economists had projected that, even under normal crude price levels, most Gulf states would not be able to keep budgets in balance. However, any hope of ‘normal conditions’ collapsed when the Covid-19 virus escalated into a global pandemic, significantly reducing already low expectations for Far East oil demand. OPEC states had formed a working arrangement (OPEC+) with Russia to deal with the challenge of falling prices. This arrangement destabilized in March at the OPEC+ meeting in Vienna when Russia and Saudi Arabia failed to reach a production cut agreement. Saudi Arabia tried to force Russian cooperation by flooding the market with crude. Russia called the Kingdom’s bluff and doubled down on its own production. The ensuing race to the bottom tipped the market into oversupply and tanked oil prices globally. Plummeting oil prices threatened expensive state-funded diversification efforts and putting long-planned events such as Dubai’s World Expo 2020 in Dubai and Saudi Arabia’s NEOM City at risk. Although this further reemphasizes the need for the Gulf states to prioritize diversification away from reliance on hydrocarbon, Gulf States will have far less cash to continue to invest in the capabilities of youth by fostering education and to create an ecosystem that encourages innovation and entrepreneurship. How will recent fluctuations effect the Gulf 2020 economic outlook? Will Saudi Arabia and Russia be able to strike a deal palatable to the entirety of OPEC+? In the face of dramatically reduced revenues, how can Gulf states continue to diversification and other reforms.
Dr. Dania Thafer, Dr. Jasim Husain, Dr. Jean-François Seznec, and Rachel Ziemba.
Dr. Dania Thafer (moderator)
Executive Director, Gulf International Forum
Dr. Dania Thafer is the Executive Director of Gulf International Forum. Her area of expertise is on the Gulf region’s geopolitics, US-Gulf relations, and the political economy of the Gulf Cooperation Council (GCC) states. She is also a Visiting Scholar at the Center for Contemporary Arab Studies at Georgetown University.
Dr. Thafer been widely published on matters concerning the Arab Gulf states including several articles and publication. She has co-authored two edited books “The Arms Trade, Military Services and the Security Market in the Gulf States: Trends and Implications” and “The Dilemma of Security and Defense in the Gulf Region”. Dr. Thafer is currently writing a book focused on the effect of state-business relations on economic reform in the GCC states. Previously, she worked at the National Defense University’s Near East South Asia Center for Strategic Studies.
Dr. Thafer has a master’s degree in Political Economy from New York University, and PhD specialized in the Political Economy and International Relations of the GCC states from American University in Washington, DC.
Dr. Jasim Husain
Former Member of the Bahraini Parliament
Dr. Husain’s career highlights include membership in Bahrain’s parliament by virtue of being elected in 2006 and 2010, where he served on the Finance & Economic Committee. Dr. Husain was appointed as Director of the Economic Research Unit at the University of Bahrain between 2005 and 2006, and also taught in the College of Business Administration at the University of Bahrain. He contributed to different publications within The Economist Group concerning GCC countries between 1996 and 2006. Dr. Jasim developed a book in Arabic discussing economic policy choices for GCC economies, notably the possible merits of linking local currencies to the US dollar and/or other currencies.
Dr. Jean-François Seznec
Senior Fellow, the Atlantic Council
Jean-François Seznec is Adjunct Professor at Johns Hopkins’ School of Advanced International Studies. He is a Senior Fellow at the Atlantic Council and a Scholar at the Middle East Institute. He holds a MIA from Columbia University, an MA and Ph.D. from Yale University. He has published numerous books and articles. He has lectured extensively on the industrialization and politics of the Arab-Persian Gulf. He is interviewed and quoted regularly on national and international TV, radio and newspapers. Dr. Seznec has 25 years experience in finance of which ten years were spent in the Middle East. In January 2019, Routledge published his latest book, co-written with Samer Mosis, “The Financial Markets of the Arab Gulf: Power, Politics and Money.
Founder, Ziemba Insights – Non-Resident Fellow, GIF
Ms. Ziemba is the founder of Ziemba Insights, a macroeconomics and policy due-diligence advisory firm. Additionally, Ms. Ziemba is an Adjunct Fellow at the Center for a New American Security, and an Adjunct Lecturer at NYU, Center for Global Affairs. Ms. Ziemba is also a Strategist at Alpha Z Advisors and Advisor at Globalwonks. Her research focuses on the interlinkages between economics, finance and security issues. Her research topics include coercive economic policies such as sanctions, economic resilience and the role of state-owned investors including sovereign wealth funds.