Anyone with an interest in the economies of the Arabian Gulf will be more than familiar with the concept of diversification. In many ways it has become a mantra for this oil-rich region as it has sought to reduce its dependence on hydrocarbons.
Now, with oil having lost over half its value during the past year, alternative revenue streams have never been more important. Indeed, many of the people OBG speaks to both in the private and public sectors feel that there may in fact be a silver lining to the current oil price crisis in the form of a much greater impetus toward autonomous private sector growth.
In the meantime, the investment profile of the region remains attractive. The macro fundamentals of relatively strong GDP growth, continuing high levels of government spending and youthful populations, backed by strong foreign reserves mean that most of the countries are able to weather the current oil price scenario. However, this new environment underscores the importance of continuing economic development and reform to ensure that each country maximises its natural resources but also creates and facilitates the basis of long-term sustainable growth form a wide variety of revenue streams.
The collection of articles below highlights some of the ways in which Gulf governments are looking to balance their priorities in an era of lower hydrocarbons receipts. The niche Dubai has carved for itself as a service hub and its preparations for hosting Expo 2020 and the famous infrastructure projects underway all across the region are all likely to be on investors’ radars. Perhaps less obvious though is the strong and recurrent theme of education and training, the concerted effort to equip nationals with skills to play their part in the diversified economy. From the focus on research & development in Qatar, to enhancing in-country-value in Oman and the spending allocated to the education sector in Saudi Arabia, the various approaches toward growing a knowledge-based economy are explored.
I hope you will find the below articles and interviews insightful.
With best wishes,
Managing Editor, The Middle East