As Gulf economies step up their efforts to diversify beyond oil, success will depend on participation and buy-ins from the ‘megacommunity’ of stakeholders to shift capital and workers from government jobs into growing industries, reveals a report by consultancy firm, Booz Allen Hamilton, released today (Monday, February 17).
Titled Building a Diversified Economy, the study, which was commissioned by the Economist Intelligence Unit (EIU), highlights the challenges posed by the current employment structure and corresponding fiscal realities of the UAE, Qatar, Saudi Arabia and Oman. It recommends five major actions that leaders can take to build thriving, diversified and more competitive economies. These include: initiating public-private partnerships, launching incentives and reforms to boost private sector growth, refocusing subsidies to build a competitive workforce, testing and evaluating the impact of policy initiatives before and during implementation, and mounting a national communications campaign to drive support and participation.
Among the key findings of the study is that investments in information technology and cybersecurity are accelerating growth in the communications sector. Other high-potential sectors include financial services, healthcare and tourism. However, jump-starting these industries requires capital and workers to be shifted from government jobs, which is an enduring challenge for leaders across the GCC region.
GCC countries are already enjoying positive economic elements – including infrastructure improvements, political stability and continued oil revenue – but future prosperity requires new alignment between government, business and education.
“The transition from an oil-centric economy to a diversified one is complex, but achievable,” says Mahir Nayfeh, vice-president at Booz Allen Hamilton MENA. “GCC nations have, what is perhaps, the greatest untapped natural resource: citizens who want their nations to succeed.”