Public-private partnerships to boost economic development in Gulf

August 12, 2018 8:02 am


In recent years, since the oil price slump, plans have emerged across the Gulf to curb fiscal deficits and diversify economies, most notably through the development of national infrastructure, highlights a new report by Oliver Wyman.

Titled “How Public-Private Partnerships can support the Gulf’s Economic development,” the report highlights the significance of the private sector’s contribution to the emerging economies. Public-Private-Partnerships (PPPs) stand among the main levers being considered in the Gulf as a means to boost private sector contribution to the economy and to offload some of the financing burdens from the government onto private investors.

Read: Why are PPPs a must in the GCC?

Since the early 1990s,  Gulf nations have been turning to the Public-Private-Partnership model to attract international investors, to energize the private sector and to develop local talent. These countries – through their national development programmes – aspire to attain world-class infrastructure within the next 15 to 20 years, in order to support the growth of their economies and populations.

Such programmes will aim to diversify the economies away from oil and gas whilst ensuring key sectors such as energy, transportation, healthcare, and education, remain of world-class quality. According to the report, the establishment of the King Abdullah University of Science and Technology (KAUST) in Saudi Arabia and the construction of the Burj Khalifa in Dubai are both noteworthy examples of Public-Private-Partnership successes.

“Although PPP ventures have faced numerous challenges in the past, their increased adoption in the region is a positive signal given the current economic environment,” said Jeff Youssef, Partner, Financial Services, Oliver Wyman.

“For these partnerships to flourish, a clear model that captures private and public sector objectives is required to ensure the smooth transition for successful PPP ventures. Initially, PPP projects should be aligned with national strategic objectives. Governments need to agree on which benefits to capture from partnering with private sector entities and define an operating model accordingly,” he added.

Gulf countries have seen a string of PPP projects going live with regained private sector attention. However, benefits from such efforts may come with fundamental challenges if areas such as political consistency, legislation, regulation and communications are not addressed.

Read: Saudi leads top Arab listed companies, UAE leads top ranking private firms

Oliver Wyman is a global leader in management consulting. With offices in 50+ cities across nearly 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 4,500 professionals around the world who help clients optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit www.oliverwyman.com.

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AMEinfo Staff
By AMEinfo Staff
AMEinfo staff members report business news and views from across the Middle East and North Africa region, and analyse global events impacting the region today.



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