Manufacturing Is Key to Economic Diversification in the Middle East, Study Says
By: Frost & Sullivan June 02, 2014
Despite many underlying tensions, the Middle East has maintained a positive economic outlook, according to Frost & Sullivan's "International Supply Chain Excellence Programme-Gulf Edition 2014." This is evident from the region's ability to maintain a positive growth rate when most economies globally have struggled to be above the red line.
The Gulf Co-Operation Council (GCC) countries, specifically, have maintained an average gross domestic product growth rate in excess of 5 percent over the past decade and half. The regionís rich oil and natural gas reserves have been instrumental in its growth and prominence in the global scenario and their contribution is likely to continue in the future, too. However, inherent socioeconomic disadvantages associated with capital-intensive industries such as oil and natural gas have led to high unemployment. The heightened focus on the oil industry had relegated secondary and tertiary levels to other industrial development, and the region needs to amend this.
In the past decade, there have been trends where abundance of natural resources has actually helped vitalise the non-oil economic growth in the GCC countries. Thus, developments in the region indicate the increasing focus on non-oil sectors as a means to achieve sustained economic development and elevated social status.
The Middle East, comprising the GCC countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, and the nations of Yemen, Jordan, Lebanon, Iran and Iraq, is a heterogeneous group of nations, some with high natural resources and some with poor resources. The contrast extends to the political system, social structures and overall economic development. Below average to moderate growth in some of these countries in the past has been compensated by boisterous growth in other oil flourishing economies, resulting in the regionís economic growth to remain above global average.