The Gulf region requires actual economic growth in accordance with the change in the economic environment. In a recent discussion conducted by Gulf Research Center (GRC), six distinguished panellists highlighted on issues concerning the future of the Gulf economies. The meeting shed light on areas such as fiscal sustainability and debt, fetching business, FDI and diversification.
Adoption of more counter-cyclical policies was proposed so as to avoid volatility in the Gulf region as the fall of oil prices remain unchanged due to the pandemic. The countries need to contemplate the growth of educated youth and improve transparency, foster government trust by the citizen and the business community. There should be a relentless understanding of market dynamics to strategize diversification efforts. Incorporation of horizontal policies with good business ambiences will in turn stimulate innovations, productivity and finance.
In order to avoid rigid unsustainable fiscal posture & low labour productivity, the GCC States are to restructure the social contract and can adopt a growth strategy, which relies on migrant labour. Better social alternatives will be aimed at privatization and decrease of state dominance in the real economy.
Oil wealth has been a constant contribution to economic development and environment of the Gulf States regarding sustainable GCC economic development. The policies set by international environmental & climate treaties such as the UN framework convention on climate change & the Paris Climate Accord signed by GCC countries to tackle climate change have affected the economic sector.
Attempts to reduce fossil fuel consumption and the global carbon energy transition have further led to a decline of oil and oil prices. However, most GCC countries are embracing environmental impacts by flooring institutional architectures to nurture ecological balance. One such example is Saudi Arabia's proposal of a circular carbon economy approach to lower carbon emissions at the G-20 presidency.
It was proposed that the GCC states should consider comprehensive investment in renewables, which can contribute to socio-economic indicators and generate around 500,000 jobs opportunities in the long-term. The assumption that investment costs in sustainability options for the environment are high and lack of awareness of the available opportunities have kept these countries' environmental involvements far from being sustainable.
The region should invest in electric markets to enhance the long-term sustainability of the economy and attract new markets. The current regional developments prove that GCC states can advance more in their ecological contribution.