The Arab Center for Research and Policy Studies, in partnership with Konrad Adenauer Stiftung and the Doha Institute for Graduate Studies launched in Doha, organized the “Economic Diversification in the Gulf States: Opportunities and Challenges” conference On 13-14 November 2021. The conference represents an extension of the Center’s efforts to research economic diversification in the Arab Gulf states, after holding a remote workshop of the same title on 25-26 May 2021. The topic was also discussed at the 2016 Gulf Studies Forum, the proceedings for which were published in the book Economic Diversification in the Arab Gulf States in 2019.

Across four sessions and two public lectures, the conference seeks to open a fruitful discussion that addresses a set of research questions. What are the problems associated with financial policies in the Gulf countries? And how can they be overcome to diversify their economies? Should Gulf countries invest more in the industrial or the services sector, or both? Is there a model that the Gulf countries should follow to achieve economic diversification? What is the role of the private sector in achieving economic diversification in the Gulf countries? How can the Gulf countries attract foreign direct investment? How can the public sector be kept attractive to Gulf citizens while ensuring increased productivity? Are additional laws needed to boost women's participation in the economy?

The conference opened with opening remarks from the Dean of the School of Public Administration and Development Economics at the Doha Institute Hamid Ali, Head of Middle East and North Africa Division in the European and International Cooperation Department at Konrad Adenauer-Stiftung, Canan Atilgan, and Head of Research at the Arab Center, Haider Saeed, who welcomed the participating researchers and attendees.

The Need for Economic Diversification and the Role of the Human Factor

The first panel was chaired by Marwan Kabalan and included four participants. Speaking first, Ann bint Saeed Al-Kindi, and Independent Strategic business consultant, presented “More than Economic Diversification,” which sought to provide a holistic view of the Gulf countries, while focusing on the context of economic diversification in the Sultanate of Oman. Noura Al-Lahow, Section Head of the Investment Department at Alahleia Insurance Company and Vice Chairman of the Economic Forum in the Kuwait Economic Society, followed with her paper, “The Effect of Human Capital on Economic Diversification Plans,” arguing that that human capital, added to it a state that invests in its people, as well as a vision, shall result in a state with a solid and diversified economy.

The next speaker, Auhoud AlBaloushi, who currently oversees an advisory office in humanities, presented on “Education Diversification as the Key to Economic Diversification,” exploring the pivotal role that school and post-school education plays in human development and hence economic diversification as one of its basic components. Asrar Hayat, member in the Board of Directors of the Kuwait Transparency Association and the Kuwait Aviation Services Company rounded off the panel with her paper “Why Is Economic Diversification Needed in Kuwait?” She presented several scenarios for economic diversification in Kuwait and the Arab Gulf states and provided suggestions and recommendations that reinforce the importance of having different resources for each country, given the impact that this could have on the economy, people, and the positive relations between the GCC countries.

Khalid Rashid Al-Khater followed the first session with his public lecture:The Rentier Growth Model in the Gulf: A Recipe for Faltering, Economic Diversification and Altering the Demographic Structure of Society.” He framed the topic of the conference and the challenges of achieving economic diversification in the Gulf states, by explaining the GCC model of economic growth, while defining the general characteristics of the GCC economies, in order to understand the stunted economic diversification and the transformation of the demographic structure of society move forward in making suggestions to push the process of economic diversification forward.

Economic Diversification in the Gulf and the Role of Industry and Small and Medium-sized Enterprises

Panel Two was chaired by the Regional Representative for the Gulf States at Konrad Adenauer Stiftung, Fabian Blumberg, and included a further four participants. Director of Economic Division at "First Strategy Consulting" in Jordan, Bashar Soboh presented “The Role of Industrial Infrastructure in Enhancing Economic Diversification in the GCC,” stressing the vital role of the private sector as an engine of growth and effective tool for economic diversification and development and arguing that diversification can only be achieved if the private sector is assigned a significant role in Gulf economies. Yousuf AlBalushi, Chief Economist of the Oman Vision 2040's Taskforce and Senior Official at the Central Bank of Oman, followed with “The Role of the Private Sector and FDI in Economic Diversification in the GCC.” His paper critically evaluated the current GCC efforts to shift their economies away from heavy dependence on hydrocarbons towards more diversified economic systems, where the private sector becomes the engine of growth, taking Oman as a case study, in order to adequately understand the trends and patterns of slow progress in private sector.

Professor of Business Administration at Kuwait University, Moudi Al-Homoud, and Founder and CEO of Ecosystem Consultants, Hanadi Al-Mubaraki, presented the next paper onGCC Economic Diversification Through Smart Growth: Innovation, Incubator, SME, and Technology Transfer Programs.” They proposed a road map for shaping the economic diversification of the GCC countries as modern knowledge-based economies. Sebastian Sons, Researcher with the Center for Applied Research in Partnership with the Orient (CARPO), was the final speaker, presenting his paper SMEs and Cultural Entrepreneurship in the Gulf States: Strengthening Economic Diversification and Youth Empowerment.” He proposed cultural entrepreneurship as a driving force for political, social and economic transformation in Gulf states' societies and outlined existing challenges for the sustainable development of cultural entrepreneurship.

The first day concluded with the second public lecture, which was given by Rabah Arezki, Chief Economist and Vice President of Economic Government and Knowledge Management at the African Development Bank. His lecture, titled “Transformation, Not Diversification?” discussed the role of technological change in shaping energy markets, and the nature of risks and opportunities associated with these changes. He argued that countries with economies dependent on oil and state-owned business need economic transformation, touching on ways to change the economic landscape in the “big oil countries.”

The second day's sessions addressed the impact of regional and foreign resources in promoting economic diversification in the countries of the GCC and the Qatari experience in economic diversification.

Regional and Foreign Resources of Economic Diversification in the Gulf States

The third panel and first session of the day was chaired by Sahar Yousef, Assistant Professor on the Development Economics Program at the Doha Institute, and included two speakers. Kicking off the day, Abdullah Baaboud, Visiting fellow and Chair of the State of Qatar for Islamic Area Studies at the Faculty of International Research and Education at Waseda University, Tokyo, presented his paper Economic Diversification in the Gulf: Regional Cooperation is the Missing Element in the GCC State's Various Vision Plans.” He stressed the lack of building viable and accountable institutions to ensure accountability and suitability and the near absence of any mention of enhancing regional cooperation and integration, which are essential in achieving economic growth and argued the importance of regional cooperation in helping to achieve GCC plans and visions.

Musalam Said Masan, Acting Assistant Secretary General for Committees and Information at Oman's Shura Council, followed, presenting his paper,How to Exploit Foreign Direct Investment to Expand the Base of Economic Diversification in the GCC Countries.” The paper assesses the role of FDI flows in Oman and clarifies the challenges facing the non-oil sectors in attracting FDI, and concludes by suggesting some programs, policies and features that would enhance the role of FDI in consolidating economic diversification.

The Gulf Experience in Economic Diversification: The Case of Qatar

Panel Four was chaired by Mohammad Yaghi, Research Fellow and programme manager at the Regional Program Gulf States at Konrad-Adenauer-Stiftung and included three final participants. Farid Elsahn, Professor of Public Administration Program at the Doha Institute, began with “Economic Diversification: A Sustainable Development Approach (Qatar as a Case Study).He looked at Qatar’s efforts in adopting a new strategy for economic diversification based on productivity and competitiveness, while attributing great importance to the private sector to achieve targeted economic growth.

Frank Himpel, Director of the Institute of Logistics at Anhalt University of Applied Sciences in Germany, followed with his paperThe Successful Creation of Resilient Supply Chains Creates Potentials for Further Successful Economic Diversification: Qatar as a Case Study.” He focused on the effort made by Qatar to overcome the 2017-2020 blockade, and how its economic diversification attempts benefited from the positive effects of this effort, emphasizing the context of restructuring supply chains.

Associate Professor in the Development Economics Program at the Doha Institute, Ayhab Saad finished off the panel with his paper,The Effect of the Blockade on Trade and Export Diversification in Qatar.” He examined the impact of the blockade on diversifying trade in Qatar using detailed trade data to quantify the impact of the blockade on exports diversification in Qatar by tracking a constructed measure of export diversification before and after the blockade.