WHILE the Gulf Cooperation Council (GCC) economies are expected to grow at a slower rate in the foreseeable future, the need of the moment is to enable sustainable growth and implement pragmatic strategies. Working to achieve this goal, GCC governments have started to prime their economies to enter this new reality, while making solid efforts to transform their business approaches to make the most out of their meager resources.
Dr Fahad M Alturki, Chief Economist and Head of Research at Jadwa Investment, a Saudi closed joint stock company with headquarters in Riyadh, said the region's governments are introducing reform programs aimed at changing the very structure of their economies to counter the challenge of slow growth.
"The reform programs announced in Bahrain, Saudi and Kuwait are aimed at changing the structure of their respective economies," Dr Alturki said. "These programs emphasize the need to diversify both government revenue and exports, as well as improve local products and reduce national unemployment, all of which are essential to attain sustainable growth in the non-oil economy."
The challenges of slow growth will be the main topic of discussion at the upcoming Top CEO Conference & Awards, scheduled on April 10-11 at King Abdullah Economic City, Saudi Arabia.
The conference will include both on- and off-record sessions that will tackle numerous topics, including New Technologies, The Broken Job Machine, Private-Public Partnerships, Leadership 2.0, Vision 2030, New Alliances, the Arab Image in the West, Antitrust Laws, Women and Leadership, and The Image War.
Meanwhile, many industry experts will look at the slowing growth rates and low oil prices as blessings in disguise, because these could open new avenues for market growth.
"Lower oil prices certainly bring a range of challenges, but they also bring opportunities. The challenges mean growth in some sectors may be harder to generate than before. Companies that succeed in the future will be those that are able to increase efficiency and productivity as well as be able to innovate," said Khalid Al Rumaihi, CEO, Bahrain Economic Development Board.
Rumaihi emphasizes the constructive role of the private sector in countering the challenge of slow growth, adding that the best is yet to come for the GCC.
"The region is seeing massive economic transformation as countries are moving away from their reliance on oil and gas. As part of these efforts, we are seeing considerable investment in infrastructure across the region – more than $32 billion in Bahrain alone and approximately $2 trillion across the region. The diversification of economies provides opportunities for businesses, as governments look at reforming rules and regulations to aid private sector growth."
With the region slowly waking up to a new reality, businesses need to chalk out newer and, if possible, collaborative methods to be able to face the changing scenario and counter the challenge of slow growth.
"We are all stronger when we work together. Collaborations between different types of organizations enable players with different skill sets to come together to achieve what might not be possible by one entity alone.
Well-structured PPPs (public–private partnerships) can help governments leverage the expertise and efficiency of the private sector, raise capital and spur development," said Maryam Al Mheiri, Acting Chief Executive Officer of Media Zone Authority – Abu Dhabi and twofour54.
