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by ehnto 2029 days ago
I wouldn't so boldly claim they won't go poor, you trust in good management and no internal misfortune or subterfuge. Though their savings buy them considerable time to figure out an economic path forward, the loss of their profit center will surely affect the weight of their currency and political influence.

Oil won't go away of course, once the huge capital investment no longer makes sense it will become less abundant as fewer companies will be extracting and refining it. So they could see profits from oil as a niche resource in a post oil world.
1 comments
imtringued 2029 days ago
If they are well prepared then they will actually do better after the oil is gone. The resource curse results in countries focusing on a few narrow industries. Resource extraction is easy but it only benefits those who are directly employed by it. Usually governments don't make it easy for other types of businesses to flourish because they can entirely support themselves on resource extraction.
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frobisher 2029 days ago
Indeed. That said, what will they diversify to? I wonder if it will be solar energy generation due to natural abundance. Barring that, it will have to be something like high tech, which itself will be dependent on importing talented labour. That will only happen with low tax rates, with Dubai acting as a hub for transient talent looking to save for a few years, then head off.

Meanwhile, given the local Emirati will form a small fraction of the economy, they may effectively act as rent seekers on income and corporate tax from the rest of the economy.

Will this be an ideal egalitarian society? Probably not, at least in terms of my values. But those seem like the underlying dynamics, for better or worse.

Of course, if diversification isn't competitive relative to the rest of the world, things will go the other way.

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arjun-menon 2029 days ago
> I wonder if it will be solar energy generation due to natural abundance.

Yup, it’s happening. Gigawatts of solar power is being constructed. The UAE is getting this solar energy at the cheapest price per watt worldwide as well: https://www.forbes.com/sites/dominicdudley/2020/04/28/abu-dh...

> will be dependent on importing talented labour

This is already happening at a massive scale.

> That will only happen with low tax rate

This is also already true. The personal income tax rate is 0%. Most types of companies don’t pay any taxes either. The only tax you directly incur is the VAT of 5%.

> Will this be an ideal egalitarian society?

In the future, it’ll probably transform more and more into a sort of hyper-capitalistic and highly-successful country like Switzerland.

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