When Can Oil Economies Be Deemed Sustainable?

• Author: Migdad, Abdalrahman

Edited by Giacomo Luciani and Tom Moerenhout

Palgrave Macmillan, 2021, 365 pages, [euro]39.99, ISBN: 9789811557286

In answering the titular question, "when can oil economies be deemed sustainable?" the editors, who are also contributors, explore the economies of oil-dependent countries and the question of economic sustainability. Contributors to the book include economists and energy specialists in established research centers and agencies worldwide. When Can Oil Economies Be Deemed Sustainable? presents a real predicament connected to energy and sustainability: whereas energy is an immediate cause of pollution and environmental degradation, oil revenues are only sufficient to sustain oil economies in the medium term. So with no alternative to oil, oil economies will continue production and pollution will continue to rise.

The volatility of the energy market confirms the notion that oil revenues are not sustainable. Interruptions in supply and demand are the leading causes of such volatility, and the ongoing Russia-Ukraine war is the latest factor driving the price increase. Therefore, oil-dependent countries seek to establish trade diversification and the diversification of revenue sources. A sizable part of the book explores the economic threats with which oil resource countries must cope, a phenomenon known as the 'Dutch Disease.' The book also addresses sustainability and diversification in Gulf countries, as imbalances, wars, and crises, whether in the Gulf or similar regions, affect both suppliers and recipients of energy resources.

When Can Oil Economies Be Deemed Sustainable? documents the 2018 Gulf Research Meeting discussions at Cambridge in fourteen chapters grouped into four main categories. The first part presents a holistic conversation about the sustainability of the Gulf oil economies. The second focuses on fiscal sustainability, i.e., the government's responsibility to diversify revenue sources. The third addresses labor market reform by looking into labor market policies. The last part concerns climate action.

The first part of the book consists of 7 chapters. In chapters 1 and 2, the authors provide a holistic discussion of current trends and projections about the sustainability of oil economies in the Gulf. In the first chapter, the editors explain that what is sustainable today may not be sustainable in tomorrow's economic cycle. Specific trends include worsening environmental degradation, socioeconomic inequalities...