News

The Gulf is doing its best to spend its windfall. Stately pleasure
domes are springing up all along the coast. Saudi Arabia announces six,
no seven!, new economic cities, which it hopes will create millions of
jobs for its restive, youthful population. There are worrying echoes of
the wasteful 1970s. But this time round, more of the spending is being
done by private companies, with an eye to consumer demand, rather than
by states.

Awash with capital, the Gulf countries need labour. Thanks to a liberal attitude to guest workers, in the UAE,
for instance, over 90% of the private labour force is made up of
foreigners. Some of the follies these Indians, Bangladeshis, Chinese
and Filipinos build will not earn much return, but at least they help
spread the wealth around. And now that American spending is faltering,
a splurge is welcome. As Adam Smith said, outlays on “trinkets of
frivolous utility” are what “keeps in continual motion the industry of
mankind.”