Economic Diversification in the GCC

Dialogue Information

GCC Econ cover

ECONOMIC DIVERSIFICATION IN THE GCC

February 2019
Muscat, Oman

Against this backdrop, the Hollings Center for International Dialogue and the Brookings Doha Center convened experts, scholars, and international organization representatives to discuss the incentives and disincentives for economic diversification in the GCC. The dialogue was held in Muscat, Oman in February 2019.

Dialogue Conclusions

GCC nations are at different points in the economic diversification with varying levels of success. This new normal is disincentivizing leaders from implementing reforms that will impact the current incentive structures in the economy.


Incentives for the private sector are missing.
Measures to address incentive issues could include reorienting government spending, strengthening private sector competition, and providing guarantees for firms engaged in export activity. Also recommended: implementing labor market reforms to make nationals more competitive for private sector employment.


Work culture needs to change in GCC countries, while labor market reforms are sorely needed.
Young people’s sense of entitlement on education as an unemployment benefit and lax work ethics are impediments to maintaining high-quality human resources.  This makes the private sector less globally competitive.


Leaders need to find ways to share wealth other than employing people in the public sector.
Universal basic income or transitioning to a more conventional welfare state can be two models.

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