Among Middle East economies, it’s a fact that the Gulf states have achieved the highest levels of development and diversification, coupled to which are optimum living standards. It is true for both GCC nationals and its expatriate residents.

This conclusion does not come out of the blue, but based on facts brought out by unbiased multilateral organisations. The United Nations reports have positioned the GCC at the top on parameters such as human development, while the International Monetary Fund has ranked it, among those with economies robust growth rates in recent years. Average growth during this period has been 5 per cent annually.

On economic diversification, this is a vital and especially in relation to the post-oil era. The Gulf Organization for Industrial Consulting (GOIC), a specialist entity, has indicated that the Gulf’s industrial exports have increased from $158.5 billion in 2008 to $256.4 billion in 2012 — an annual gain of 12.4 per cent. This is significant as the global financial crisis was still playing out during the better part of this period.

It has also coincided with a qualitative shift, with the value of exports up from 21.8 per cent of the total value of GCC exports to 24.2 per cent. The period has also seen the setting up of mega-industrial projects, such as the Emirates Global Aluminium, which resulted from the merger of the two big smelters in Abu Dhabi and Dubai, and the setting up of petrochemical plants, particularly in the UAE and Saudi Arabia.

These have led to a transformation of the GCC into one of the largest petrochemical production hubs in the world, and accounting for nearly 9 per cent of global aluminium production. This takes pride of place alongside its food industries, metals, construction and building materials sector, whose products — cement and ceramics in particular — are now distributed in more than 160 countries.

This indicates that the GCC is moving progressively towards further economic diversification and create more job opportunities. The process has the same weightage within both public and private sector alike, despite the differing financial capacities of each.

While the public sector enjoys considerable financial capabilities, thanks to oil revenues and the consequent financial standing enjoyed by GCC economies, the private sector suffers from a funding shortage. This is happening despite the existence of funds dedicated to supporting small and medium-size enterprises. More attention needs to be paid to tackle the funding scarcity that seems to have a structural character, resulting from lacunae in the distribution of bank credit and financing capacities of specialised institutions, and not from a lack of funding.

However, this can be resolved by coordinating the efforts of central banks and finance ministries, in order to meet the requirements for the next phase of development, including industrial.

There are signs indicating that the GCC is more likely to see another upturn cutting across sectors, and especially in industrial. It has led to the setting up of sophisticated projects, such as the Khalifa Industrial Zone Abu Dhabi (Kizad) and with its prime access to the Khalifa port and the King Abdullah Economic Zone in Saudi Arabia.

The current phase gains more importance due to many factors, such as the emphasis on projects with renewable energy sources and up-to-date technologies and strict environmental protection regulations.

Hence, the private sector industries can play a complementary role, since the factors for success are available, particularly financing, encouragement for exports. This will boost their competitiveness credentials amid fierce competition in the global marketplace.

Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.