The Gulf economies’ long road towards better diversification
For decades, economic diversification has been a key goal for the Gulf oil exporting countries, as evidenced by their various national development plans. For countries that are highly reliant on oil export revenues, achieving this goal is seen by policymakers as essential both for political and economic security and for sustainability. Some Gulf oil exporters have made progress in diversifying their economic base away from the oil sector over the past few decades. Nevertheless, most indicators of economic complexity, diversity, and export quality continue to be lower in oil-exporting Gulf economies than in many emerging market economies, including other commodity exporters. For the Gulf economies, the biggest challenges have been to diversify the sources of government income, for instance through raising additional revenues by taxing individuals and businesses, and to generate non-oil export revenues by building export-oriented industries. This article explores the reasons for economic diversification’s increasing prioritization in the Gulf States, their current levels of diversification, and options for achieving more meaningful diversification.
Fattouh, B. and Shahabi, M. (2019). ‘The Gulf economies’ long road towards better diversification’, World Energy.