February 11, 2025
In a recent panel discussion on the future of the Gulf Cooperation Council (GCC), Minister Al Hussaini expressed gratitude to Dr. Al-Budaiwi for the invitation and highlighted the region's economic achievements. The GCC has experienced sustained growth, low inflation, and strong financial buffers due to significant reforms.
The reforms have focused on diversifying government revenues, improving business climates, increasing access to finance, making labor markets more flexible, and raising women's participation. These efforts have led to economic transformation and diversification in sectors like tourism, logistics, finance, and renewable energy.
Minister Al Hussaini emphasized three priorities for continuing this progress: raising productivity, enhancing innovation environments, and deepening regional economic integration.
To raise productivity, policies that ensure macroeconomic stability and facilitate digitalization are crucial. Medium-term fiscal consolidation focusing on non-hydrocarbon revenue mobilization is recommended. Saudi Arabia's introduction of VAT was noted as a successful example of increasing non-oil revenue.
Digitalization and AI initiatives in GCC countries were praised for their potential to boost productivity growth. The UAE could see its GDP increase by around 35 percent by 2030 with further AI adoption. Training and education will be essential to maximize these benefits.
Enhancing innovation requires investing in education and skill-building while integrating more young people and women into the workforce. R&D investment is another catalyst for economic progress. Initiatives like Saudi Arabia's national governance framework and stronger intellectual property laws in the UAE were mentioned as positive steps.
Finally, deepening regional economic integration can amplify gains from diversification efforts. Intra-regional trade among GCC countries has grown rapidly but still represents less than 10 percent of total global exports from GCC states. Harmonizing regulations, improving transportation networks, and diversifying economies are necessary steps toward increased trade within the region.
By focusing on these areas, GCC countries aim to remain resilient amid global challenges while pursuing a prosperous future.