It is no secret that the Persian Gulf countries derive their wealth and strength from oil and gas. One can visit the region without seeing so much as a drop of the stuff, as our Chazen study tour did in March 2008, but its impact nevertheless drenches the region. In 2006, the Gulf countries - Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates (UAE) - produced about 28 percent of the world's oil, held 55 percent of the world's crude reserves and accounted for 41 percent of total proven world gas reserves. With energy commodities trading at dizzying new heights - oil famously cracked the $100 barrier on January 2, 2008, more than tripling in price since 2002 - and no sign of relief on the horizon, the coffers of the Gulf nations have exploded. These "oasis economies" are driven by windfall revenues of an estimated $387 billion a year through 2012, at a base case of $50 per barrel net capital outflow; take an optimistic stance at $70 per barrel, and petrodollar inflows climb to $628 billion.

Even in these times of plenty, however, hangs the ominous question, What happens when the oil money dries up? The oil bust of the 1990s is not forgotten, when oil dipped below $20 a barrel, and indeed fuels the search for economic sustainability. The strategy, succinctly stated by the Executive Affairs Authority of Abu Dhabi, relies on diversification. A number of challenges make that much easier said than done, namely, inflation, human-capital development, labor-supply difficulties and infrastructure shortfalls. However, the future of this sizzling region depends on the successful translation of today's petrodollars into tomorrow's sustainable prosperity.