Ahmed Abdelhaq Zaydan, lived in Meknès, Morocco Answered April 4 · Upvoted by Vikas Jha, M.Sc. Economics & Econometrics, Indira Gandhi Institute of Development Research (2016)
Economically? Sure. Financially? Maybe.I find people don’t understand the problem the Gulf States have so I’ll explain using Poland and Saudi Arabia.Poland has a population of 38 million and is widely considered a wealthy country in the European unx, compared to Saudi Arabia’s population of 30 million. It has a GDP of $524 billion and a GDP per capita of $16,000,Its government has a revenue of $109 billion.Polish government touts deficit cut ahead of election.


Saudi Arabia, which has a smaller population than Poland, has a revenue of $209 billion and even that’s not enough as its budget was $261 billion.Saudi Arabia's 2018 Budget Is The Country's Largest Ever.The problem for the Gulf States isn’t their economy but their financial streams. At the moment, Saudi Arabia is spending $261 billion annually and has spent at this level for years due to the oil boom of 2008–2015.


While Western “rentier” type States such as Australia (Minerals like Iron) and Canada (Oil exporter) don’t have this issue as their governments’ revenue depends on taxes not resource extraction, this isn’t the case in the Gulf where to curry favor with their citizenry, the Gulf Monarchs pursued a “Zero Taxation” policy which gave their citizens the benefits of a Western Welfare State (Free Education, Free Healthcare, High Quality Policing etc.) without the costs (Taxes).The Gulf States are thus forced to find a way of replacing their oil money without angering their civilians.


The only Gulf State that succeeded is Dubai.However this is because Dubai has replaced its minor (even by Gulf standards) oil revenue with a very intense fine system.Salik and speed fines are vital government revenue - economist
To give you an idea of just how strict Dubai is with fining, its population in 2014 was 2.2 million yet 2.98 million TRAFFIC fines were handed out alone.
So the luxury police cars aren’t just for show, they’re to ensure they can catch up to any speeding vehicle and fine them.


This allows Dubai to essentially “tax” its residents in a way where it’s your fault. So instead of paying say $8,000 in taxes , you’re now paying $8,000 in fines because you were speeding so many times, spit gum on the sidewalk or were heard insulting someone in the streets.This has allowed Dubai to continue running smoothly. Which brings us to Saudi Arabia and the question:What should Saudi Arabia do to replace oil revenue?