Abu Dhabi, Dec. 10, 2018 – In cooperation with the Emirates Policy Center (EPC), the Arab Strategy Forum (ASF) on Monday released a report entitled the “Socio-economic Outlook for the Arab Gulf Countries: Figures and Forecasts”, which was reviewed in the presence of EPC President Dr. Ebtesam al-Ketbi, HE Saeed Mohammad Al Eter, Director General of the Executive Office in Dubai, and a number of academics, private sector representatives and media representatives.
Mr. Al Eter pointed out that this is the third annual report issued by the 11th session of ASF, which will take place on Dec. 12, 2018 in Dubai. The report was released one day after the 39th GCC summit in Riyadh and represents a scientific attempt to assess the reality of Arab Gulf economies and their future prospects, he added.
Dr. al-Ketbi said that Arab Gulf countries have realized since mid-1980s and the sharp decline of oil prices the risks of overdependence of its economies on oil in light of the fluctuating oil price in the global market. This fluctuation makes it hard to predict oil revenues, the continuation of the welfare economy in these countries, and the decline of governments’ ability to remain the main employer of the national labor force, especially in light of the growing numbers of youth entering the labor market, Dr. al-Ketbi added.
She pointed out that Arab Gulf countries found themselves in face of the challenge of restructuring their economies. Therefore, these countries have adopted, since the last decade of the last century, strategies of economic diversification and enhancing the role of the private sector to expand its employment of nationals, Dr. al-Ketbi said.
EPC President reiterated that we, in the Gulf, after long years of adopting these strategies of economic diversification and several years of launching new development plans need to know what we have accomplished at the economic level? And what are the expected prospects at this level?
Then the author of the report, Dr. Martin Hvidt, an associate professor in the Center for Contemporary Middle East Studies at the University of Southern Denmark overviewed the main themes and ideas raised in this work. He indicated that the report examines the reality of GCC economies and the main challenges they are facing. He added that the document highlights the current development strategies, and mega projects in the Gulf region, as it seeks to foresee the economic prospects of the GCC countries up to the year 2025.
Dr. Hvidt indicated that GCC countries were able to overcome the consequences of the dramatic fall in oil price in 2014, and that the economic growth amongst GCC member states will remain positive in the coming years in light of expected oil price. However, he stressed that these countries should proceed with their monetary and structural reforms to ensure that their economies are more economically sustainable.
Moreover, the writer of the report touched upon the challenges facing economic diversification plans, and those related to the demographic make-up in the region represented in the big number of young men, and women who seek to join the GCC labor market. He also highlighted the need for promoting the private sector, reforming the labor market, and developing education not only to meet the requirements of the labor market but also to establish this sector on innovation, which serves as the basis of the knowledge economy that all GCC countries aspire to embrace.
The report called on GCC governments to create more economic space for the private sector if they want to promote this sector and expand its activities, which will enable private enterprises to expedite the creation of new jobs. This can be done, for instance, through the privatization of some public sector institutions. It stressed the need for reforming the labor market for two reasons. First, this would encourage more people to join the labor market, and secondly, this would make private sector jobs more attractive for nationals.
The report recommended that reforms should be implemented to enhance the productivity in the private sector to develop value chain in a manner that surpasses the simple production processes, which would create jobs with more knowledge content. As such, these jobs would be well paid and more attractive for nationals. The report also called for implementing financial reforms to ensure more sustainable economies in the GCC countries. Additionally, it recommended that steps should be taken to implement institutional reforms to enhance the capability of the public sector in planning, and then to facilitate the execution of its plans.
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