Dubai and the Middle East

From the Wall Street Journal:

LONDON -- Dubai's debt debacle is stoking a new fear for investors across the globe: potential government default by heavily indebted nations.

The Dubai government roiled markets this week with its move to delay debt payments owed by its flagship holding company, Dubai World. The company is stressed by tens of billions in debt that funded spending on glitzy real-estate projects from the Middle East to Las Vegas.

For much of the last 30 years or so there has been remarkable interest in the Middle East and, of course, oil.  I've always been a bit bemused by it.  Certainly the Middle East generally is important to the West, particularly Europe, in the short term. But what of the long term?  What of 20 years from now?  Or 50?  What, if anything, does the Middle East have going for it?

For all their oil wealth the short common sense answer is NOT MUCH!  The middle east is only marginally habitable.  Lack of fresh water is a major problem.  The region can not feed itself today and absent the ability to import food it will return to the impoverished past.  The region has a poor to non-existent history of modern government.  Indeed the Dubai news is only one of any number of examples of mismanagement.  It's easy to find others in Saudi Arabia and Kuwait both of which have also largely squandered their oil wealth on extravagance and privilege.  If you actually need someone to work in the region, you import them from elsewhere!  When the oil that will be gone in some few years what then?  There is little by way of natural resources except for sun that might be used for massive solar farms.

What then of the near term?  Modern economies need oil.  But for how long?  Are there alternatives?  The short answer is not very long and there are in fact many other alternatives, albeit they cost more.  Does the Middle East have alternatives?  Can they demand any price?  The short answer is oil is nearly the only resource the Middle East has, it doesn't really have alternatives!  They might use it themselves but as I've noted before, you can't DRINK OIL!  While you can make water with it when its gone you are back where you started.  Price oil to high and you only accelerate the move to other energy sources.  In short the Middle East has little option but to sell oil to the West at a reasonable price.

Just a POV driven by some common sense.