The economies of Gulf Cooperation Council (GCC) countries are undergoing exceptional experiences. This is demonstrated through sustained growth levels of the gross domestic product (GDP) of the six-nation grouping.
The IMF projects real, adjusted for inflation, GDP growth level above 4 per cent in 2013 thanks primarily to developments in non-oil sectors. Suffice to say that Saudi Arabia and Qatar are using oil proceeds to develop local metro systems at the cost of billions of US dollars.
To be sure, combined value of GCC economies is outstanding by global standards. The GDP of GCC is estimated at $1.5 trillion. This is a sizable amount by virtue of representing just above 2 per cent of the worldwide GDP.
For comparative purposes, the European Union, the world’s largest economic bloc, controls some 23 per cent of global GDP. Needless to say, the EU comprises of 28 members following accession of Croatia in July. The bloc includes powerful economies like those of Germany, France, and the UK. Still, the US alone accounts for some 21 per cent of the world’s total GDP.
By one account, the GDP of GCC is ranked number 13 worldwide. Certainly, this represents a global recognition of GCC economies amongst some 200 countries and numerous economic blocs.
Astonishingly, some GCC economies are ranked amongst the top in the world. Latest statistics places the GDP of Saudi Arabia at No. 20 amongst some 194 countries in the world.
In fact, Saudi Arabia alone accounts for just under half that of the GCC, some 47 per cent to be specific. Also, Saudi Arabia is the largest Arab economy by a comfortable margin.
In fact, nominal value of Saudi’s GDP is stronger than those of some European countries like Sweden, Norway and Belgium, to name a few.
Against this background, it is not surprising that Saudi Arabia is the sole Arab country within the G-20, the exclusive group comprising the world’s largest economies.
Next month, the city of Saint Petersburg in Russia is due to host the 2013 summit of G-20 heads of government amidst untold global challenges. And there is the possibility of a one-on-one meeting between leaders of the US and Russia following a cancelled summit between the two.
Likewise, the UAE’s economy ranks amongst the top in the world. Ranked number 30 worldwide, GDP of the UAE values more than those other European countries like Denmark, Greece and Finland.
Noticeably, the UAE’s economy is the second largest amongst Arab countries after Saudi Arabia but ahead of Egypt. For its part, Egypt’s GDP ranks No 42 in the world, clearly at a distant place versus the UAE’s ranking.
Not long ago, the UAE has overtaken Egypt the honour of the second largest Arab economy. This followed sustained economic developments throughout the UAE but notably in Abu Dhabi and Dubai in terms of oil and trade, respectively.
Understandably, some GCC member states are contributing more than others to regional GDP. Aside from Saudi Arabia, contributions of the UAE, Qatar, Kuwait, Oman and Bahrain amounted to 47 per cent, 23 per cent, 12 per cent, 11 per cent, 5 per cent and 2 per cent, respectively.
Needless to say, the petroleum sector more than any other factor deserves for economic progress within the GCC economies. Oil prices have been hovering around $100 per dollar for the last 5 years in a row. Also, where possible, GCC countries have succeeded in expanding their oil capacity and output.
Yet, GCC countries are making the right thing by using oil proceeds to diversify away from the petroleum sector.
