High Oil Prices Create Wealth in Qatar and Poverty in Egypt

July 24, 2008 by  


Courtesy New America Media, News Analysis, Jalal Ghazi

Editor’s Note: As oil prices rise it’s easy to conclude that Middle East countries are awash in money. But the rising cost is creating great wealth and misery writes Arab media monitor Jalal Ghazi. Ghazi is the associate producer of the Peabody Award-winning show Mosaic: World News from the Middle East, and writer of the column “Eye on Arab Media” for New America Media.

middle_east map

SAN FRANCISCO — Contrary to images on American television, not all Arab countries are benefiting from the rise of oil prices. Images on Arab television station Al Jazeera show that rising oil prices have created pockets of extreme wealth and poverty within the Middle East.

While Qatari citizens enjoy an unprecedented economic boom, millions of Egyptians are unable to buy bread.

The price of filling a gas tank is virtually unchanged in Qatar, the Arab world’s wealthiest per capita country. The huge oil revenues keep oil prices at 20 cents per liter. More importantly, the revenue is changing the face of the country’s capital, Doha.

Pearl-Qatar, a man-made island rising from the sea off the coast of Doha, will be a multi-billion dollar city. Its 985 acres will be home to 40,000 people. According to its official Web site, this luxury Riviera-style island is “comprised of 10 distinct, themed districts to be developed over five years, housing beachfront villas, elegant town homes, luxury apartments, exclusive penthouses, five-star hotels, marinas, schools as well as upscale retail and restaurant offerings.”

This city would have been impossible to build if not for Qatar’s 900 million cubic feet of natural gas reserves — the fourth largest in the world. Adhip Chaudhuri, who teaches economics at Georgetown University in Qatar, told Al Jazeera English, “If you take Dubai and Doha, the two big boomtowns in the Arabian Gulf, they will rival China in terms of all this capital and construction equipment, cement, bricks and wood.”

Oil revenue also built the so-called Education City, where students can access Western education without having to set foot in the United States. Its official Web site describes Qatar’s Education City as “a 2,500-acre campus on the outskirts of Doha which hosts branch campuses of some of the world’s leading universities, as well as numerous other educational and research institutions.”

Five American universities already offer degrees in Education City and more are on the way. Cornell’s medical school, graduated the first Qatar-trained physicians this spring. Virginia Commonwealth University offers art and design programs. Carnegie Mellon offers computer and business programs. Texas A&M teaches engineering. Georgetown offers international relations; Northwestern University teaches undergraduate studies in newspaper and broadcast media and training in telecommunications, radio, television, film and interactive media.

Qatari nationals also receive free education and heath care thanks to oil revenue. But if high oil prices helped create extreme wealth, they have also created extreme poverty. Qatar, population less than a million, stands in stark contrast with Egypt, the most populated Arab country, with 76 million.

Saoud Al-Mannai, a Qatari student in Education City, told Al Jazeera. “If oil and gas were not there, none of this would have happened, none of this advancement, especially building the Education City.”

Twenty percent of Egypt’s population lives on less than $2 a day. After a protest over food prices in which three people were killed, the Egyptian government was forced to subsidize the most important food item in Egypt: bread. However, not all Egyptian bakeries sell subsidized bread, which has created huge pressures on those that do.

As a result, it is common for many Egyptians to wait many hours before being able to buy bread at subsidized prices.

In an average store one beta costs 10 cents, while in a subsidized shop it costs only one cent. “Unsubsidized bread used to be affordable but now the prices have skyrocketed,” one bakery owner told Al Jazeera.

After long hours of waiting in long lines to buy bread all over Cairo, people sometimes lose their temper, with fatal results. Eleven people have died in bread feuds – some in knife fights – in the past 11 months. If the price of food continues to rise, more violence is expected. According to Al Jazeera, Egypt saw widespread riots over bread in 1977, which left up to 70 people dead.

Meanwhile, some families have become vegetarian since they can no longer offered to buy meat. Most Egyptians now rely on potatoes and rice to feed their large families.

A mother of five, Hala Suliman told Al Jazeera, “I was forced to give up many important things in my life due to the rise in food prices. My kids want meat and fruits, but I have no money.”

Suliman and her husband work at a coffee shop and have a combined income of $4 a day, but they have five children to feed.

Each day, Suliman’s oldest son waits three or four hours in bread lines instead of going to school.

Egyptian journalist Mahmoud el-Askalani told Al Jazeera, “Of course, as a journalist, my salary isn’t bad, but I’ve been affected because the increase in food prices is too high even for the middle class.”

In fact, he felt so strongly about the rise in food prices that he started an organization called Citizens Against Price Rises. El-Askalani told Al Jazeera, “I want to achieve through this organization a popular movement that stands up to the rise in food prices.” He believes that the pro-business government has allowed businesses to make huge profits while many people go hungry.

Some families in Egypt have taken their children out of school, are visiting doctors less, and eat smaller meals. According to Heba Kamel of the World Food Programme, the rise of food prices has created “new faces of hunger” as “more and more middle income earners are feeling the crunch of food prices.”

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