There will not be a soft landing for the Gulf economies as the year closes, given the backdrop of the sharp slide in oil prices. Nevertheless, some sort of recovery in prices cannot be ruled out in 2015, led by factors such as global economic growth, the weather and sociopolitical developments.

The market psychology could change and with it feeling of participants, which could lead to the emergence of positives for the oil market.

Fortuitously, GCC states have the necessary cushion, as illustrated in the size of their sovereign wealth funds that can be called in to deal with adverse developments stemming from uncertainty in the oil sector. According to the Sovereign Wealth Institute, the GCC collectively controls a staggering $2.4 trillion of such funds, or 37 per cent of the world’s total. Clearly, there is no shortage of funds for dealing with declining oil revenues.

In a way, developments in the oil market, no matter how unwelcome as far as the GCC are concerned, could speed up delayed economic reforms. Understandably, all of them will appreciate the opening up of their economies to competition, but others may have to do more to catch up.

Economic reforms like removing all restrictions on foreign investments should help in addressing the unemployment challenge. What is happening in the telecom sector following its liberalisation should serve as a model for other economic sectors.

The challenge of ensuring availability of job opportunities suitable for locals has to be addressed. A report — ‘Rethinking Arab Employment issued by the World Economic Forum in October- suggested that joblessness is a problem in three GCC member states. Unemployment rates were at 8.1 per cent, 7.4 per cent and 5.6 per cent in Oman, Bahrain and Saudi Arabia, respectively.

The report provided further damaging accounts on the scale of the unemployment problem. Youth unemployment stands at 27.8 per cent, 27.5 per cent and 20.6 per cent in Saudi Arabia, Bahrain and Oman. It denies individuals equipped with sufficient education and skills an opportunity of contributing to the economy.

There is no substantial joblessness among locals in Kuwait, and that is because of a unique reason. It is widely accepted that some 90 per cent of Kuwaiti nationals work for the government and other public entities, something extraordinary and possibly not sustainable in the medium-term.

The GCC also has to meet the challenge of ensuring implementation of projects dealing with regional economic integration such as the customs union. Member states have agreed to fully implement the scheme in 2015, but no specific commitment was made during the recent 35th GCC summit held in Doha.

The customs union focuses on adopting unified trade rules with non-GCC members. However, this is easier said than done, as external trade is significant for some more than others, and they must make the necessary changes.

Other difficulties entail agreeing on a formula for fair distribution of customs duties among member countries, as any such method must take into account the port of entry and final destination of goods.

Concurrently, these economies have to foster the implementation of the Gulf Common Market (GCM). Launched in 2008, the GCM calls for free movement of factors of production within the six-nation grouping. Certainly, completion of the customs union and common market projects are essential to making all stakeholders appreciate the benefits of a regional grouping.

Ongoing developments in the oil market should serve as an opportunity to address the essential — but delayed — economic reforms.