Female citizens of Gulf states have suffered less unemployment than their male counterparts, but the female migrant workers who make up the workforce in the service industry have been hit hard. Read more at Al Arabiya.Read More »
Articles by Omar Ahmad Al-Ubaydli
In past centuries, times of crisis have produced world-changing innovations, and the performance of venture capital during the COVID pandemic suggests that history might be repeating itself. Read more at Al Arabiya.Read More »
Saudi Arabia is well behind the curve when it comes to gender equality in the workplace, but the Kingdom has an opportunity to avoid repeating the mistakes other countries made in pursuit of the same goal. Read more at Al Arabiya.Read More »
Instead of screaming at each other on social media, let’s do the research and figure out which solutions actually work. Read more at Al Arabiya.Read More »
People out of work due to COVID-19 usually view their unemployment as a temporary problem, but what happens if those jobs are gone for good? Read more at Al Arabiya.Read More »
Recessions usually hit men harder than women. COVID-19 has had the opposite effect, but it could also shake up cultural norms surrounding remote work and childcare that hold women back. Read more at Al Arabiya.Read More »
Trump has insisted that the coronavirus economy isn’t his fault, but voters are starting to doubt him. Read more at Al Arabiya.Read More »
Omar Al-Ubaydli discusses reforms to the Saudi justice system.
Read it at Al Arabiya.
Omar al-Ubaydli explains the possible positive effects of a Boris Johnson government for the Persian Gulf region.
Read it at Al Arabiya.
Omar Al-Ubaydli writes on the need for Saudi Arabia to adopt an economic development plan to promote entrepreneuership.
Read the article at Al Arabiya.
Many countries have started to introduce energy-efficient building codes as part of global efforts to reduce pollution and combat global warming. The fact that they can generate financial savings means households and organisations are often willing to implement energy-efficient modifications to their construction projects independent of any broader environmental benefits. But are the sometimes costly investments worthwhile?
A recent study by Lucas Davis from the University of California at Berkley, Sebastian Martinez and Bibiana Taboada – both at the Inter-American Development Bank – suggests that the electricity usage in houses with energy-efficient upgrades may be indistinguishable from that of regular houses. Their findings came as a shock to many observers, since the engineering
The damage wrought by Hurricane Harvey has dominated headlines since the end of August and Irma is now garnering similar coverage.
The US president Donald Trump has overseen what has largely been an effective, centralized response to the natural disasters; but with many climate experts claiming that we should prepare for a higher frequency of extreme weather events, does the current emphasis on top-down disaster relief favored in the US and beyond represent the best strategy?
Emily Skarbek, a professor at Brown University, approached this question by studying one of the most famous catastrophes of the 19th century, the Chicago fire of 1871. Prof Skarbek began by noting that scholars and laypeople alike are convinced that there is no substitute for the resources and direction that
Recent U.S. presidential administrations are cultivating quite the reputation for scandal, with Donald Trump’s perceived conflicts of interest, Barack Obama’s seemingly unbounded surveillance program, or George W. Bush’s controversial justification for invading Iraq. Corporate scandals, meanwhile — think a United Airlines passenger being assaulted, exploding Samsung telephones, or Bernie Madoff — can arouse similar, or sometimes even greater, public outrage. Yet between a typical political scandal and a garden-variety corporate one, the latter is generally the lesser of two evils.
Many frustrated U.S. citizens feel unable to hold the politicians responsible for government scandals accountable. Voting them out of office is an incredibly coarse — and mild — punishment mechanism, while the
In the wake of falling oil prices and regional instability, the Gulf Cooperation Council (GCC) countries are looking for new economic opportunities. Generally speaking, experts encourage economic integration, because specialization in production, and operating in larger markets, constitute two of the most important sources of prosperity. The GCC governments have subscribed to this view for some time, having launched an economic aggrandizement project following the establishment of the GCC in 1981, comprising a free trade area, a customs union, a single market, and plans for a single currency. The European Union’s (EU) pre-2010 economic achievements played an important role in convincing the GCC countries of the importance of such steps. However, the Gulf countries have also struggled to realize the largest potential gains due to a failure to correctly implement the integration plans. This failure can be attributed to a lack of compliance by the six member states regarding the legislation passed by the GCC Supreme Council, especially in the period after 2000, which included the customs union and the single market. In principle, a GCC citizen should face the same treatment in most of his personal, commercial, educational, etc. affairs in each Gulf country.Read More »
The UAE offers economic opportunities to the rich and poor. For those with modest means, trying to move up the ladder often requires incurring substantial debt at the outset. That is why, according to one recent estimate, the average UAE resident owes creditors Dh41,000. A mixture of poor planning and bad fortune mean that for a subset, the debt becomes unmanageable. The National’s online Debt Panel is replete with letters from distressed borrowers searching for a way out of debt cycles; what is that makes humans so prone to these difficult episodes? There are two main psychological phenomena that get us into trouble: hyperbolic discounting, and the good news-bad news effect. It is human nature to exhibit a preference for consuming things in the present rather than the future; this is described as discounting the future. To understand hyperbolic discounting, which is a cognitive bias that is useful to economists trying to understand personal debt problems, we first have to grasp its simpler antecedent, exponential discounting. When you make a choice that involves a future act, absent the arrival of any new, relevant information, when that future time arrives, you should stick to what you planned to do. This is known as exponential discounting of the future, and someone conforming to it is being dynamically consistent.Read More »
Government regulations vary greatly in their effectiveness. In cases of ones that fail, a common theme is basing regulations on what turn out to be inaccurate models of how people respond to incentives. How can we avoid such errors when thinking about raising the minimum wage? In the dynamic economy of the 21st century, it’s impossible to accurately predict the effects of raising the minimum wage. However,based on the lessons of yesteryear, imposing some intellectual discipline upon ourselves when we formulate our predictions will help us craft better policies. Economists often recount the "cobra effect" when analyzing the effects of government regulations. In colonial India, in an effort to reduce the number of venomous cobras in Delhi, the government offered a bounty for dead serpents. Perhaps the idea came from drawing an analogy between cobras and criminals, where bounties have been helping authorities capture outlaws since antiquity; as such, this policy seemed entirely sensible.Read More »
In July 2016, the World Bank appointed American Paul Romer as the Bank’s chief economist. This was quite a radical decision; the World Bank usually prefers conservative figures for its top positions, whereas Romer is a commercial and intellectual entrepreneur, who left the academy, first to establish Aplia, which heralded a transformation in the higher education sector, and subsequently to launch the “charter cities” development project. This latter innovation is yet to bear fruit, but in light of the Middle East’s current predicament, there is an opportunity to rehabilitate it with the assistance of the Gulf countries. To understand the idea behind charter cities, one must first delve into Romer’s academic and intellectual past. Tackling low living standards has been the most important problem that economists have tried to solve since 1776, when the Scottish intellectual Adam Smith published his treatise, “The Wealth of Nations,” initiating the birth of modern economics.Read More »
In most GCC countries, for some time, over 50% of employed nationals have been working in the public sector—a very large percentage by international standards, as in advanced economies, public sectors usually account for around 20% of total employment. The GCC governments are currently trying to overturn this phenomenon, as transferring jobs to the private sector over the coming years constitutes a key component of the six countries’ economic visions. There are several reasons for this, with the most salient being the desire to reduce government spending, especially recurring expenditures, which include public sector salaries. As a result, many observers, among them normal citizens trying to understand the government’s economic strategy, regard strengthening the private sector as merely a ploy for avoiding paying salaries to nationals. In fact, cutting government spending is not the primary advantage associated with such a policy; instead, the key benefit will be reflected in the productivity data at the level of the entire economy. To fully understand the relationship between the public sector and economy-level productivity, one must first appreciate the reason for high levels of public sector employment.Read More »
The period following WW2 witnessed the emergence of a military conflict between American and the Soviet union. The capitalist and socialist-communist economic models also crossed swords as a subplot of this global conflict, and the polarization was so strong that the US’ allies were forced to adopt the free markets and decentralized economic activity associated with the capitalist model, whereas the USSR imposed its obverse upon those under its sphere of influence, a system characterized by centralization of production, employment, consumption, and so on. Fortunately for the GCC countries, they adopted the capitalist model, which contributed to an economic boom that was unprecedented in the region. Despite the key role played by oil in the period of sustained prosperity, it represented a complement rather than a substitute for capitalism. After all, there are several other countries—inside and outside the Middle East—endowed with huge amounts of natural resources, including oil, but which suffer from poverty and economic backwardness due to their failure to embrace free markets, and their insistence upon economic centralization. During the 1980s, economic factors fueled the victory of the rightist, western bloc over its leftist adversary.Read More »
On Wednesday, Uber announced that Saudi Arabia invested $3.5 billion in the company, valuing it at $62.5 billion. With that money comes a board seat for Yasir Al Rumayyan, the managing director of the country’s Public Investment Fund—and maybe a new kind of economy for Saudi Arabia. Before the discovery of oil in the 1930s, living standards were as low as you would expect for the Middle Eastern country. The advent of the “black gold” offered a path to a modern lifestyle, but a quick transition necessitated importing large amounts of foreign labor at all skill levels, as the citizenry lacked the raw numbers and the advanced education system necessary to fulfill all the labor market’s requirements. To this day, nationals account for approximately 50% of the labor force. While the oil wealth has immeasurably improved the lives of Saudis, it has also had some adverse consequences: unutilized assets. In 2008, 72% of employed Saudi citizens worked in the public sector—a figure that is approximately five times the corresponding figure for the U.S. Bureaucracies were shielded from market competition and were notoriously inefficient in their deployment of human resources.Read More »
“If you’re not confused,” mused management guru Tom Peters, “you’re not paying attention.” Given the single-minded intent behind many government regulations, human policymakers sometimes fall asleep at the wheel. Unintended consequences, for example, are reflected by an Endangered Species Act that sometimes encourages extinction, car safety regulations that cause more pedestrian deaths, and anti-venomous snake policies that increase their population. As governments seek to lower unemployment, however, shorter workweek policies may repeat previous errors. A glaring red flag is how simple the proposed solution seems to be: Proponents of work-sharing believe an economy requires a fixed amount of work to be performed by a limited number of people. High unemployment, they contend, is due to allocating too many hours to current employees. A more equitable redistribution of work hours, according to this logic, may diminish unemployment: Instead of Alex and Chris working 45 hours a week and Jo being out of a job, each can work 30 hours, eliminating unemployment. Fortunately, this analysis doesn’t have to be hypothetical, as many countries have already deployed this logic to justify work-sharing programs. Exploring the likely — often unintended — consequences using economic analysis puts this into perspective.Read More »
In light of a series of crises faced by the European Union (EU) during the last ten years, the UK citizenry’s view of the European project has morphed from acceptance to concern, forcing Prime Minister David Cameron to commit to holding a referendum over the UK’s membership of the EU. After a set of complicated negotiations with the European Commission and the remaining members, Cameron succeeded in forging a special form of membership for his country, and it could be enough to ensure that his constituents reject the option to exit in the vote scheduled for the middle of 2016. Given that the European integration project has been operating as a de facto template for what the Gulf Cooperation Council (GCC) countries are undertaking, it serves their interests to monitor developments with an eye to drawing lessons on how to avoid the EU’s mistakes. UK citizens have two primary complaints. The first is migration: European single market rules guarantee EU citizens the right to travel and reside in any member country. The English language is the preferred second language among EU citizens, and is also the most prevalent one; moreover, London is attractive in terms of the economic opportunities it offers, especially in the financial sector.Read More »
Open borders and economic freedom, had, after all, paved the way for the United States’ rise to prominence, and today, the relatively open borders of the Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE) have contributed to the development of the Gulf states as well as the migrants’ original countries. Yet, as with virtually all Organization for Economic Cooperation and Development (OECD) countries, the United States has long since altered its view of immigrants, and now the U.S. regards them as a threat to its citizens’ well-being. One of the unintended consequences of this view has been the tragic deaths of many migrants who have—voluntarily or otherwise—risked their lives attempting to circumvent the modern immigration restrictions imposed by OECD countries, as they search for better economic opportunities, and a stable life. The GCC countries operate immigration policies that lie between the polar extremes adopted by the United States throughout its history. On the one hand, workers require visas and sponsors to work legally, similar to the United States at present. On the other hand, similar to the United States of the past, the legal hurdles are low: There is no requirement to demonstrate that the prospective migrant possesses unique abilities unavailable in the citizen workforce.Read More »
Competition to supply the energy-hungry countries of East Asia is definitely heating up. In a market that is traditionally dominated by the Gulf Cooperation Council (GCC) countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE— Russia has recently entered the fray, and Iran, as well as Iraq are keen to make up for lost time from sanctions and supply disruptions, respectively. The United States is also eyeing the market as it prepares to lift its self-imposed, 40-year long export ban. Can GCC countries wield the complex tapestry of commercial and geo-strategic relationships to their advantage? According to data from the U.S. Energy Information Administration, in 2005, the United States imported 13.7 million barrels of crude oil and petroleum products per day. By 2014, due to shale oil, that figure shrunk by over 30 percent to 9.2 million barrels per day. At the same time, the United States increased its Canadian oil imports by over 1 million barrels per day. As the world’s largest oil importer, these changes had important knock-on effects for global oil markets. Saudi Arabia took a sizeable hit, declining U.S. exports from 1.5 million barrels a day to 1.2 million barrels, but by far the biggest loser was Nigeria, which used to export 1.2 million barrels a day to the United States, and now exports virtually nothing.Read More »
“You can’t run a business based on sympathies,” the controversial billionaire oil broker, Marc Rich once said. The business of oil is no different; it lubricates the region. And as the price of oil has taken a hit from a high last year of $115 a barrel to $50 a barrel, many are casting about for reasons as to why. In recent weeks, Saudi Arabia has attracted much criticism from analysts over its response to tumbling oil prices. As the nation met with other oil suppliers on December 4 in Vienna, it let it be known that that it wouldn’t reduce supplies to stabilize the price. Some are ridiculing the Kingdom for undertaking what they regard as a failed gamble to knock shale oil producers out of the market or to exert economic pressure on Russia. But a closer examination suggests that Saudi Arabia’s official reasoning—the defense of market share—is on point, and is also the right thing to do. Saudi Arabia has its interests as well as those of the global economy to consider, after all. Few can forget the first oil shock of 1973 that many associate with the Organization of Petroleum Exporting Countries (OPEC). Indeed, there are many misconceptions about OPEC. Some often perceive it as an omnipotent monolith that holds the global economy at its mercy, raising or lowering prices on a whim.Read More »