Are all Arab countries “oil rich”?

by Yusuf Kocaman 8:24 PM - Monday, March 7, 2016 0 comments

 

Most of us heard the term 'Petrodollars', This term has a respectful place and broadened reputation in economic glossary. It shortly means the money earned from the sale of oil. The term "petrodollars" was coined when the price of oil rose sharply in the 1970s. It resurfaced in the new millennium, when prices rose once again. Although petrodollars initially referred primarily to money that Middle Eastern countries received. 1

Middle east countries are referred as Arabs, so it is a common saying, a stereotype that all Arabs are “oil rich. Is it? Well it is not. Not all of them are actually like that. Let’s look at Egypt as an example.  Egypt is not oil rich, also since I live here I have asked my Egyptian teachers and friends: we will have a better understanding.

First of all we should point out that Egypt has the biggest oil deposits in Africa after OPEC. Despite this fact however, they are only 13th in the whole middle east and only produce  3.7 billion barrels. This may seem plenty, however it is nothing close to what the gulf countries in the middle east produce. For example Saudi Arabia produces about 262.3 billion barrels of oil, compared to this Egypt’s 3.7 billion shows that Egypt doesn’t produce that much oil, at least not enough to be compared with the gulf countries. Before, Egypt used to produce a lot of oil and also used to be a seller of it. However, the petroleum consumption in Egypt  increased by every passing year, and now it is more than the production. Now Egypt barely has enough oil for it’s own country, at the point where they have to buy petroleum now. This shows that not all Arabs are oil rich. Other countries that aren’t oil rich in the Middle East include Jordan and Morocco.

Despite the fact that Egypt doesn’t have much oil it has found other ways to make money. Main income sources are Tourism, the Suez Canal, and natural gas. Egypt's main exports consist of natural gas, and non-petroleum products such as ready-made clothes, cotton textiles, medical and petrochemical products, citrus fruits, rice and dried onion, and more recently cement, steel, and ceramics.2

One of the importand incomes of Egypt is tourism. Egypt is crazy with tourism, many people from all over the world  come to Egypt to see the pyramids or visit the vacation spot sharm al-shaykh. There are many places to visit and places to see, Egypt is a tourism paradise. Well, it used to be; see, after the Arab Spring on January 25, 2011 less and less people have been coming to Egypt in fear that something else might happen. Ever since those events Egypt has lost it’s tourism reputation. Even though the tourism in Egypt is like this, I really admire the way Egypt improvises for their lack of oil. The Suez canal is a very large source of income for Egypt. The Suez canal is an artificial canal that connects lower Africa and Asia. This tunnel is a very strategic place for Egypt, for about 47 ships pass through each day, and last year 17,483 ships made full trips through The Suez canal (coming and going). About 104 different ship flags were represented last year, with 998,652 tons of  goods (2,736 tons daily). 3 We can see by this, how big of an income source the Suez canal is. The canal makes 4.9 billion dollars per year. The Suez Canal is a very important income source for Egypt.


In conclusion we can all see that not all middle east countries are “oil rich”. The ones without the oil improvise with other things. In my opinion Egypt is the best at this improvising.

1- http://www.investopedia.com/terms/p/petrodollars.asp

2- https://en.wikipedia.org/wiki/Economy_of_Egypt

3- http://www.theguardian.com/business/2011/feb/01/suez-canal-egypy-q-and-a