Common wisdom had it that oil-rich states such as Saudi Arabia would avoid the turmoil sweeping their less fortunate neighbours. They would always be able to buy off opposition with oil revenues. But is this a sustainable and optimal use of record petroleum receipts?
On February 12, Kuwait got its retaliation in first, offering every citizen $3500 and free food. A day later, King Hamad of Bahrain paid $2650 to every Bahraini family. Jordan, Yemen, Syria and Algeria announced fuel and food subsidies and price caps.
Libyan dictator Muammar Gaddafi followed the script, offering pay rises for state employees of 150 per cent and a gift of $400 for each family. Such promises, echoing his earlier, unfulfilled call of February 2009 to dismantle all ministries and give oil revenues directly to the people, did nothing to quell the determined struggle against his rule.
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