Why Gulf Arab States Are Rich: More Than Just Oil

The wealth of some Arab Gulf countries has become a global fascination. An explainer says it comes from a mix of natural resources, small citizen populations, long-term investment of oil revenue and decades of accumulated wealth, and not from oil alone.

Oil and Gas Reserves

Saudi Arabia, Kuwait, Qatar and the UAE hold large oil and gas reserves. The International Monetary Fund (IMF) says oil activities account for around 70% of total government revenue across most Gulf Cooperation Council (GCC) economies.

Sovereign Wealth Funds

Several Gulf governments set up sovereign wealth funds to invest surplus oil revenue in international companies, real estate, technology and financial institutions. These include Saudi Arabia’s Public Investment Fund, the Abu Dhabi Investment Authority and the Qatar Investment Authority.

Small Populations

Small citizen populations relative to hydrocarbon reserves give some states high wealth per citizen, with Qatar and Kuwait as examples.

Growth of Cities and Migrant Workforce

Cities such as Dubai and Abu Dhabi have grown into global business hubs. Workers from countries including Pakistan, India, Bangladesh and the Philippines make up a significant part of the Gulf workforce.