Abstract
This chapter provides an analytical review of the current economic diversification strategies of the Gulf Cooperation Council (GCC) countries. It argues that diversification has been successful in the energy sector through investment in upstream and downstream industries, as well as energy-intensive industries such as petrochemical, aluminium and fertilisers, where GCC has comparative advantage. However, these countries have yet to expand in non-hydrocarbon industries to build vibrant, diversified economies that can withstand the effects of oil price shocks. Analysis of the six national diversification strategies reveals that those with less proven oil and gas reserves are more enthusiastic than others in diversifying their economies. The continuity of the allocation state model and dominance of the public sector are major challenges of diversification, and if GCC countries are to implement successful diversification, they must support and increase the role of private sector in economic development.
This is a preview of subscription content, log in via an institution to check access.
References
Ahmed, M. (2016). Spending cuts a must in Gulf despite oil recovery, Interview with AFP, Dubai, 19 October 2016.
Beblawi, H. (2011). Gulf industrialization in perspective. In J.-F. Seznec & M. Kirk (Eds.), Industrialization in the Gulf: A socioeconomic revolution (pp. 185–197). London: Center for Contemporary Arab Studies, Routledge.
Callen, T., Cherif, R., Hasanov, F., Hegazy, A., & Khandelwal, P. (2014). Economic diversification in the GULF COOPERATION COUNCIL (GCC) COUNTRIES: Past, present and future, IMF Staff Discussion Note, December 2014, SDN14/12.
Council of Economic and Development Affairs. (2016). Saudi Vision 2030, National Transformation Program 2020, Riyadh, Saudi Arabia.
Cypher, J., & Dietz, J. L. (2009). The process of economic development (3rd ed.). London: Routledge.
Economic and Social Commission for Western Asia. (2001). Economic diversification in the oil-producing countries: The case of the Gulf Cooperation Council Economies. New York: United Nations.
Economic Development Board. (2008). Our Vision: The Economic Vision 2030 for Bahrain, Manama, Bahrain.
El Kharouf, F., Al-Qudsi, S., & Obeid, S. (2010). The Gulf Cooperation Council sovereign wealth funds: Are they instruments for economic diversification or political tools? Asian Economic Paper, 9(1), 124–151.
General Secretariat for Development Planning. (2011). Qatar national development strategy 2011–2016, Doha, Qatar.
Ghosh, A., & Ostry, O. (1994). Export instability and external balance in developing countries. IMF Staff Papers, 41, 214–235.
Hertog, S. (2012). How the GCC did it: Formal and informal governance of successful public enterprise in the Gulf Co-operation Council countries. In A. Amico (Ed.), Towards new arrangements for state ownership in the Middle East and North Africa (pp. 71–92). London: OECD.
Hvidt, M. (2013). Economic diversification in Gulf Cooperation Council (GCC) countries: Past record and future trends, Kuwait programme on Development, Governance and Globalisation in the Gulf States, London School of Economics and Political Science, Issue No. 27, pp. 1–49.
Kerr, S. (2016). IMF cuts Gulf states’ GDP growth forecast to 1.8%. Financial Times, 25 April 2016.
Koren, M., & Tenreyro, S. (2010). Volatility, diversification and development in the Gulf Cooperation Council countries, Kuwait programme on Development, Governance and Globalisation in the Gulf States, London School of Economics, Research Paper No. 9.
Looney, R. (1994). Industrial development and diversification in the Arabian Gulf economies. Greenwich, CT: JAI Press.
Malik, A. (2015). The Gulf economies’ coming meltdown? How to prevent it? Foreign Affairs, November 5.
Ministry of Economy and Planning. (2010). Brief report on the ninth development plan 2010–2014. Riyadh: Ministry of Economy and Planning, Saudi Arabia.
Mishrif, A., & Akkas, E. (2016). Gulf sovereign wealth funds and their impact on the development of Islamic finance and banking. Paper presented at the 2016 Gulf Research Meeting, University of Cambridge, UK, 16–19 August 2016.
Morakabati, Y., Beavis, J., & Fletcher, J. (2014). Planning for a Qatar without oil: Tourism and economic diversification, a battle of perceptions. Tourism Planning and Development, 11(4), 415–434.
Seznec, J. (2011). Financing industrialisation in the Arab Persian Gulf. In J. F. Seznec & M. Kirk (Eds.), Industrialization in the Gulf: A socioeconomic revolution (pp. 30–43). London: Center for Contemporary Arab Studies, Georgetown University/Routledge.
Shuai, X. (2013). Will specialisation continue forever? A case study of interaction between industry specialisation and diversity. Annals of Regional Science, 50, 1–24.
United Arab Emirates Cabinet. (2010). UAE Vision 2021: United in ambition and determination. Abu Dhabi: Government of UAE.
United Nations Conference on Trade and Development. (2015). World Investment Report 2015: Reforming international investment governance. Geneva: UNCTAD Publications.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 Gulf Research Centre Cambridge
About this chapter
Cite this chapter
Mishrif, A. (2018). Introduction to Economic Diversification in the GCC Region. In: Mishrif, A., Al Balushi, Y. (eds) Economic Diversification in the Gulf Region, Volume I. The Political Economy of the Middle East. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-10-5783-0_1
Download citation
DOI: https://doi.org/10.1007/978-981-10-5783-0_1
Published:
Publisher Name: Palgrave Macmillan, Singapore
Print ISBN: 978-981-10-5782-3
Online ISBN: 978-981-10-5783-0
eBook Packages: Political Science and International StudiesPolitical Science and International Studies (R0)