The combined GDP of the six Gulf countries could more than double from a projected $6 trillion to $13 trillion by 2050, if the countries embrace a green growth strategy. That’s according to a research by Century International Holdings released at the World Investment Forum 2023 in Abu Dhabi.
“The GDP of the GCC region has already touched the $2 trillion mark,” said the World Bank in an update. “If the GCC continued business as usual, their combined GDP would grow to an expected $6 trillion by 2050. However, embracing a green growth strategy could see the GDP grow to over $13 trillion…”
The transition to a low-carbon economy has been accelerated by high oil and gas prices and the need for greater energy security in the wake of the war in Ukraine. Renewable energy industries will witness trillions of dollars of new investment as well as opportunities in upstream and downstream industries.
The region also has the potential to be a lead producer of green and blue hydrogen. With the right policies, and investments to support the transition, GCC can emerge with more sustainable economies that generate rewarding jobs for their youth, while simultaneously protecting the planet.
Long before ‘sustainability’ became a buzzword, the UAE had begun investing in clean and renewable energy, with more than $40 billion in clean energy over the last 15 years and with plans to invest an additional $163.5 billion over the next three decades on the road to net zero.
GCC countries can realise up to $300 billion in FDI if they move quickly to seize the opportunity of becoming a centre for Global Value Chains (GVC) that are being reconfigured towards resilient and sustainable industries, according to a report by Strategy&.
However, the economic potential of the Gulf is not reflected in the global FDI rankings published every year in the annual World Investment Reports. Total FDI flow into the GCC declined 17.91 percent to $37.12 billion in 2022, down from $45.22 billion. This is lower than the $46.96 billion FDI attracted by Sweden last year and way below than the $117.73 billion received by Hong Kong, or the $141.21 billion attracted by Singapore.
The UAE stands out in terms of attracting FDI, with inflows of $22.73 billion in 2022 and representing 61.24 percent of the total FDI inflow of $37.12 billion into the GCC. The UAE ranks fourth globally in greenfield investment projects, with the number of projects reaching 997 in 2023, according to the World Investment Report 2023.
How many of us in the corporate world have actually looked into undertaking tangible steps to reduce our carbon footprint? The time has come for all of us to do our part in ensuring that we leave a better Earth than the one we inherited.
