Oil revenue stabilization funds provide short-run protection against oil revenue fluctuations – in the way that Saudi government deposits and reserve at the Saudi Arabian Monetary Authority (SAMA) have historically served as a buffer to decouple government budget from oil revenue fluctuations. By contrast, sovereign wealth funds create income for future generations to replace revenue streams from depletable resources – one of the purposes of Saudi Arabia’s Public Investment Fund. We developed a framework for optimizing policies for adding to and withdrawing from stabilization funds, which we apply to Saudi Arabia as a case study based on publicly available data. The quantitative results are sensitive to the specific assumptions on the likelihood of particular oil prices arising but the overall results are robust to a wide range of assumptions.

Research Fellow Nader is a research fellow at KAPSARC. His research interests include development economics, economic modeling, and natural resource economics. He leads… Nader is a research fellow at KAPSARC. His research interests include development economics, economic modeling, and natural resource economics. He leads a project exploring the role of sovereign wealth funds in promoting economic diversification in oil-dependent economies. Nader holds a B.Sc. in operations research, an M.Sc. in applied mathematics and computational science, and an MBA in finance.
Expertise
- Sovereign wealth funds; natural resource economics; economic modeling
Publications See all Nader AlKathiri’s publications
The impact of fiscal policy on non-oil GDP in Saudi Arabia
Oil revenue stabilization funds provide short-run protection against oil revenue fluctuations – in the way…
9th September 2021
Toward Fiscal Stability and Sustainable Development: The Role of Sovereign Funds in Saudi Arabia
Oil revenue stabilization funds provide short-run protection against oil revenue fluctuations – in the way…
26th July 2020