Oil revenues of the Persian Gulf Arab states other than Kuwait and Iraq jumped by more than 50% during 1990 due to higher crude prices precipitated by the Gulf crisis, it was reported Sunday.
Gulf International Bank economist Henry Azzam said the combined oil income of Saudi Arabia, the United Arab Emirates, Qatar, Oman and Bahrain rose 55% to $70.5 billion from $41.9 billion in 1989.
Azzam predicted that budget deficits in three of the five states--Saudi Arabia, Bahrain and Qatar--would shrink in 1990 while deficits that had been forecast by Oman and the UAE would actually be surpluses.
Saudi Arabia’s oil revenues will jump 63% this year to $41.3 billion, Azzam said. The UAE’s oil sales will rise 43% to $14.8 billion and Qatar’s will climb 50% to $3.4 billion, he said.
Oman’s oil revenues will increase 40% to $4.7 billion while Bahrain’s will be up 33% to $875 million, he said.
Azzam said that, despite the jump in oil revenue, Saudi Arabia’s 1990 deficit will not be wiped out because it is the main financial backer both of the multinational forces in the area and countries bordering Iraq that have been hit hard by the U.N. embargo against Iraq.
Azzam quoted Saudi Arabia’s finance ministry as saying that it had spent $21 billion on the crisis, considerably more than its additional oil revenues of $16 billion.
A significant portion of the incremental Saudi oil production is being supplied free to the multinational forces or at very good terms to Saudi allies, he added.
Saudi Arabia set 1990 spending at $38 billion and forecast a budget deficit of $6.6 billion.
Azzam said that although Iraq’s Aug. 2 invasion of Kuwait hurt non-oil economic activities of the anti-Iraq Gulf allies, solid overall growth during the first seven months of 1990 and the jump in oil exports will result in higher gross national products for most of the allies.
Saudi Arabia’s GNP will grow 9.8% in 1990, compared to 3.5% in 1989, while the UAE growth rate will leap to 25% from 14.3%, he said.
Oman’s growth rate would jump to 12.2% from 10.5% in 1989, while Qatar’s will increase to 12 % from 8% and Bahrain’s will edge up to 2.8% from 2.5%, he said.