Savings and Investment Decisions from Natural Resource Revenues: Implications for Arab Development

The Middle East is fortunate to have large endowments of oil and gas. The economies of the Middle East vary considerably, but in this paper I will reduce the complexities of the region’s endowments to two groups: Gulf States which have massive endowments and small populations, and other states which have more moderate endowments and much larger populations: I will refer to the latter as Middle-Income Middle-East States, or MIMES. These differences in endowments and populations have implications for both the decision as to how much of resource revenues should be saved, and how much of the savings should be invested domestically. Principles and rules for saving and investment appropriate to Gulf States and MIMES are discussed in this paper.  

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