An explosion in your US dollar income is not a bad problem to have. The United Arab Emirates and other Gulf oil exporters, however, have chosen the wrong way to handle it. Rather than revalue their currencies, and peg them to something more appropriate than the US dollar, they have chosen to allow a large domestic inflation. That has unnecessary costs.

A report published by Abu Dhabi’s department of planning and economy says that the United Arab Emirates has floated the idea of tracking a basket of currencies in place of the dollar. To do so would be a way to reduce inflation, which is measured at 11 per cent in the UAE, 14 per cent in Qatar, and similarly high levels in other Middle Eastern oil exporters.