A report from FuelFix.com states that Middle Eastern nations are going to increase their spending on social programs in the wake of unrest in the region in order to quell or stave off potential dissent. With oil prices at record highs for an extended period of time, Gulf States look to make $1 trillion dollars this year according to the US Department of Energy. Unlike in the past, when the states in the region used their profits to maximize their worldwide economic clout, this time they will focus on spending their money on social programs, with Kuwaitis receiving free food for a year. Jean-Michel Saliba, a London based economist with Bank of America, claims that increased spending on social programs belie longer term structural issues such as the need for political and economic reforms to prepare Gulf states for the post-oil era. The Arab Spring began in Tunisia and has engulfed Egypt, Libya, Syria and Yemen where long term dictators and families are being ousted by rebel movements. West Texas Intermediate crude prices will have to remain above $80 to sustain the increased social spending in the region which analysts at Barclays and elsewhere see as more than sustainable. It will remain to be seen if the populaces of these states are so easily lulled into complacency with more money and baubles when structural reform looms on the horizon, whether this year or in the future.

[Fuel Fix]