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The question of oil is instrumental to understanding the contemporary Middle East and its modern history. The oil industry and its effects has been one of the primary defining characteristics of Arab society, economics and politics. Whilst the influx of oil revenues has exponentially increased economic and industrial growth, structural reform has been absent, rendering this growth as simply superficial developments. Most oil-rich countries, unfortunately, are severely lacking across a whole spectrum of social, political and economic governance standards. Sudden influxes of capital, combined with rapid increases in oil prices have created severe distortions in economies, societies and political systems with highly negative consequences.

Revenues collected from oil rents and other forms of taxation have allowed governments to improve the living standard of their citizens. The United Arab Emirates and Bahrain are the forerunners in the region for the redistribution of oil wealth between their populations. In Bahrain, 30% of GDP can be directly attributed to the oil industry. Economic structures ensure this revenue is invested back into education, health and expansion of its growing tourism industry. Additionally, as it is predicted that Bahrain’s oil supply will be exhausted within a couple of decades, it is attempting to diversify its economy through oil funds.

The United Arab Emirates has also been extremely successful in the diversification of its economy and in expanding its economic infrastructure. In 2006, only 3% of Dubai’s GDP were from its oil and natural gas industries. The global promotion of this Emirate as a ‘shopper’s paradise,’ a stop-over on the way to Europe and as a tourist destination in its own right has created many employment and investment opportunities for the local population. In other oil-rich Arab countries, revenues have allowed economic growth to occur, particularly during the boom of the 1970s. Whilst...