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Diversification of GCC economies should be implemented right away

UAE. A working paper by the International Monetary Fund (IMF) has called for the countries of the GCC to create a dynamic non-oil tradable sector to support sustainable growth. The paper ‘Soaring of the Gulf Falcons: Diversification in the GCC Oil Exporters in Seven Propositions’, authored by Reda Cherif and Fuad Hasanov, says this strategy should be implemented right away, even for the richest GCC countries.

Charles Davis, Cebr Director and ICAEW Economic Adviser, commented: “Our research shows that the baseline price of oil falling gently while populations and the cost of living are rising; unless action is taken this could present a challenge. Whilst GCC countries rank well globally in their competitive environment, they are now facing fierce competition from emerging markets and developing countries.
 
“If the GCC is to maintain long-term sustainable growth, it will be very important to invest in education, increase productivity, and attract more foreign direct investment into high value industries, and step up more diverse export industries that are not dependent on commodities.
 
“This is not a new challenge, and many countries in the region – most notably the UAE and Bahrain – have already demonstrated their commitment to economic diversification. But the combination of falling revenues and rising costs means that it can no longer be a plan for the future; this has to be a priority for the foreseeable present.”

About ICAEW
ICAEW is a world leading professional membership organisation that promotes, develops and supports over 142,000 chartered accountants worldwide. We provide qualifications and professional development, share our knowledge, insight and technical expertise, and protect the quality and integrity of the accountancy and finance profession.

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date:Posted: October 3, 2014

INTERNATIONAL. “We don’t expect it to be particularly liquid, but this is seen more as a token issue to show support for the Islamic market, hopefully local corporates will follow the lead.”

date:Posted: October 2, 2014

UAE. “If the GCC is to maintain long-term sustainable growth, it will be very important to invest in education, increase productivity, and attract more foreign direct investment into high value industries, and step up more diverse export industries that are not dependent on commodities.”

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