A little over a month ago global headlines read, “Vision for an oil free economy for the Kingdom of Saudi Arabia”, and “live without oil by 2020”. According to a quote by the Deputy Crown Prince Mohammed bin Salman – who is said to be a key architect for this vision, “We’ve developed a dangerous addiction for oil in Saudi Arabia and it has hampered development in a number of sectors in the past years.”
The case in UAE – A challenge, not a crisis
Celebrating the last barrel of oil, as my brother Mohammed bin Zayed has said, we will build a sustainable economy for future generations.
— HH Sheikh Mohammed (@HHShkMohd) January 16, 2016
Earlier on, similar articles were published regarding UAE, where Sheikh Saif, the Deputy Prime Minister and Minister of Interior, quoted that since 1970 the country’s dependency on oil has been gradually decreasing, its percentage share in GDP falling from a whopping 90% in the 70s to 30% in 2016. Future plans indicate that they plan to decrease this share further to about 5% by 2020.
Today, our economy consists of a non-oil GDP of 70%. We will build an economy that is independent of oil and market fluctuations alike.
— HH Sheikh Mohammed (@HHShkMohd) January 16, 2016
This major economic and political decision may have been prompted by the slide in oil prices, hitting their lowest this year after a similar fall in 2003; but the initiative has been reinforced by global climatic shift targets.
The issue is no doubt a significant one, particularly considering UAE and Saudi Arabia’s oil dependency. Despite the fact that the share of earnings from this particular resource has fallen in the GDP, the fact remains that this decision will pose as a major challenge for the economies of both the countries. However, Sheikh Saif also quoted that if oil prices had fallen this low 30 years ago, taking this decision would’ve posed as a crisis, which isn’t the case in present. This enables them to look upon the future with optimism.
But a crucial question here is about the impact of this decision on the employment opportunities in the economy. The short term implications of this shift will obviously impact the oil traders and businesses, but the future prospects regarding employment are far more promising and progressive, as authorities have been reported to hope that this reform will bring at least a 5% fall in unemployment, and also increase the involvement of women in the corporate structure of the respective economies. This also casts a limelight on a niche profession that has gradually been gaining popularity in the Saudi and UAE economies, i.e. Energy Risk Professional or ERP.
ERP as a profession for the future
ERP is an ideal profession for individuals who aspire to work in energy consulting or energy risk. The profession ventures into practices involved in exploring, producing, storing, refining and processing of energy commodities based on hydro-carbon. It also involves handling and safety procedures of the equipment involved, as well as knowledge and identification of the complexities and diversifications present in the energy market, and the management of risks involved in such markets.
Now that the focus of the economy is shifting towards energy resources alternative to oil, the value of professionals working in those respective fields is gradually gaining momentum.
The only disadvantage that candidates who are interested in this field might face is the unavailability of ERP as a course in most institutions. Being a relatively new designation – introduced in 2010 by GARP – it still has a lot of market to tap into before it actually joins the mainstream finance and energy designations globally. Currently, there are only 6 certified ERP professionals in Dubai, and TIPS is the only GARP certified institute offering it as a course.
It is just a matter of time that we find out about the accuracy of the proclamations and assessments about the future of UAE and Saudi Arabia. Till then, we have high hopes for ERP based professionals who might find themselves in the limelight once the Oil Free Economy vision has been achieved.