Strong Gulf losing oil dependency

Strong population growth, an increase in the skilled workforce and almost one-trillion dollars in foreign reserves have helped the Gulf states reach a stage of economic renaissance, according to the Dubai International Financial Centre's (DIFC) Chief Economist.

"For the foreseeable future, the income from assets and net foreign assets will exceed the income from oil for these countries. For them, interest rates will matter more than oil prices." Dr. Nasser Saidi told attendees at the Dubai International Financial Centre (DIFC) Week yesterday.

But the enormous wealth created as a result of the latest oil boom needs to be invested wisely, Saidi said, and Gulf states need to view themselves as asset-based economies, rather than merely oil-based ones. That means sustained investment in infrastructure and continued attention to fostering growth in the financial sector.

"[T]he initial impulse for this growth was oil led, but now it is very much investment led - infrastructure investment- and private sector investment-led," said Saidi, who is also Executive Director of Hawkamah, an initiative to promote corporate governence in the region.

Speaking exclusively with Arabian Business, Dr. Saidi emphasized the need to develop the public sector, where the region will derive a large portion of its future growth.

"We know that for the future, over the next 15 years or so, we need to create something like 110 million jobs. That's as many jobs as we've created in this region since 1950," Saidi said. "Where are those jobs going to be created? Not public sector. The private sector; family businesses."

Saidi told Arabian Business that corporate governance is the key towards ensuring the sustainable future of small businesses in the private sector.

"Family businesses need to ensure their wealth survives into the future. At the moment 80% of the businesses don't survive into the 3rd generation," said Saidi, adding, "Addressing corporate governance is a major step towards ensuring family businesses sustain themselves."

View exclusive coverage of DIFCweek on ArabianBusiness.com.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM