Over the last five decades, the Gulf Cooperation Council (GCC) nations have grown substantially driven by the oil & gas sector. It still remains the highest oil producing and exporting region in the world. However, due to the recent fluctuation in oil prices, GCC nations took a hit in their economic performance during the last couple of years. Countries such as Saudi Arabia and Kuwait reported fall in GDP numbers in 2017. Under such circumstances, most of the GCC nations realized that it is essential to concentrate on and associate with non-oil sectors in order to diversify the avenues of earnings. To address this issue, countries have come up with their future plans. Saudi Arabia announced, “Saudi Vision 2030” that aims to reduce the country’s heavy dependence on the oil sector. Similarly, Kuwaiti government announced “New Kuwait 2035” strategic plan focusing on non-oil sectors. Below are some non-oil sectors where GCC has hugely invested in recent years.
Healthcare is one of the non-oil sectors where GCC has turned its focus into in the recent years. Three most important issues in which the GCC nations are concentrating on are genetic diseases, obesity, and diabetes. Under such a scenario, most of the GCC nations have taken healthcare as a part of their immediate future agenda. For instance, Saudi Arabia decided on specific agenda for its healthcare sector under Saudi Vision 2030. The Saudi authorities are facing an uphill task to manage the aging population in their country. More health complications are brought on by the overweight population. Hence, the authorities formed the National Transformation Programme 2020 (NTP) that aims to increase healthcare spending from 25% to 35% of the total Govt. spending by 2020.
- Information Technology
Another non-oil sector where the GCC has invested heavily is the Information Technology sector. This sector is expected to grow tremendously in the next few decades. As such the GCC has adopted strategies for improving the business environment of various public sectors and increased the job opportunities, thus enhancing the economy. The region’s IT strategy is heavily relying on new generation technologies. For instance, authorities in the city of Dubai is working on implementing blockchain across the government departments as a part of its aim to become the world’s first blockchain-powered government. With such aggressive support for blockchain technology by the authorities resulted in a number of companies emerging in the region serving several sectors. Addenda is one such blockchain startup that is building an end-to-end insurance settlement layer based on blockchain technology. On the other hand, The Adab Solutions project is developing the world’s first cryptocurrency exchange complying the sharia laws.
The Infrastructural sector is another non-oil sector where the GCC has largely invested. With the support of GCC nation, it is seen that there has been a substantial enhancement in the infrastructural development projects. For example, there has been a growth of regional transport as well as logistics network, expansion, and creation of airports, etc. In the year 2016, it is found that the intra-regional trade is accounted for 8% of the total trade of GCC and it is estimated that by 2020 this figure will double.
While the GCC nations are already known for their ambitious real estate projects, now they are turning their focus towards building smart cities. GCC is one of the most aggressive regions in the world in developing smart cities. In October 2017, Saudi Arabia announced to spend $500 billion to build Neom, a Megacity that will be built on the Red Sea connecting Jordan and Egypt. The city will use technologies such as artificial intelligence (AI), Internet of Things (IoT), to offer a connected lifestyle to the residents.
- Energy and Power
Energy and Power sector is one of the largest sectors in the world that earns huge revenue. As such, GCC nations have invested huge amounts of money for the development of renewable energy. GCC nations have already planned to have 44 percent of the energy by the year 2050 with the help of renewable energy sources. In Abu Dhabi, the utility-scale solar plant has already been established whereas Dubai Electricity and Water Authority (DEWA), which is set up in Dubai, is announced to have the largest concentrated solar power facility in the world.
With the recent government initiatives and announcements, it is evident that GCC is no more confining to the oil sector. Rather, they want to become industrial superpowers based on a number of non-oil sectors. Such aggressive moves by the authorities will bring more startups and foreign investments in the non-oil sectors in the region.