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Why Arab Countries Are So Rich

The richest countries in the Arab world are Kuwait, Bahrain, Qatar, United Arab Emirates (UAE), and Saudi Arabia. All of them have an average income per capita (as of 2010) above $30,000 with Bahrain having the highest per capita income in the region at $43,100. All but one of these countries is ruled by a king or a sheikh.

Why Arab Countries Are So Rich
Why Arab Countries Are So Rich

These countries are known to be rich in oil and gas resources, which is why they rank so high when it comes to GDP/capita despite their relatively small populations compared to other nations on this list.

Oil production accounts for 64% of all government revenue in Saudi Arabia and close to 50% in UAE.

For Kuwait and Qatar though, oil production only accounts for 10% of their revenue with tourism and finance playing more significant roles in generating government revenues.

Bahrain doesn’t have much oil compared to the other four but it is home to the U.S. Navy’s Fifth Fleet which gives Bahrain quite a boost when it comes to finance and tourism.

All these countries are also generally flat, meaning less space used for roads and railroads, thus reducing costs on infrastructure development. Many of them are located between Saudi Arabia and Iran which might contribute to why they enjoy relative peace compared to some other Arab states.

Although oil wealth allows for better salaries across the board when it comes to jobs in these countries, there is a shortage in adequate housing for their large migrant workforces that come from South Asia in search of better opportunities.

The unemployment rate among nationals is also very low but this might change as more expatriate workers return home due to conflicts in the region.

This is not necessarily bad news though since these are already wealthy nations which can afford to subsidize basic goods and services for the large majority of their populations.

While oil-rich Arab states like Saudi Arabia and UAE enjoy relatively greater wealth than most other Arab countries, they lack in terms of development in comparison to more middle-income developing nations such as South Korea or Taiwan due to exploitive colonial occupations by France and Britain respectively during their earlier stages of economic development or because these two countries became independent only relatively recently in the late 20th century. These Arab countries in general are still in an ongoing struggle for economic development and rely heavily on foreign (especially western) expertise, technologies, and financial assistance.

Many Arab countries also rely on tourism to some extent because it is an industry that requires little to no development while contributing significantly both to the GDP of these countries as well as accounting for a sizable portion of employment opportunities across all sectors.

These are some reasons why Arab states are quite wealthy despite having lower per capita levels when compared with other industrialized nations.

One final aspect does need some further clarification which seems to indicate that oil-rich Arab states are generally more affluent than neighbouring non-oil rich ones do not necessarily contradict what has already been stated about most Arab states being relatively poor when compared with other wealthier regions/nations across the world.

The explanation for this seems to lie in how these oil-rich Arab states are more able to effectively exploit their vast reserves of petroleum for economic development while their non-oil rich neighbours tend not to have that luxury, thus there are generally two levels of wealth disparities between the two groups of Arab nations.

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