Econ­omy to fea­ture high on GCC Sum­mit agenda

Kuwait Times - - LOCAL -

Econ­omy is highly an­tic­i­pated to be given a pri­or­ity on the agenda of the 37th GCC Sum­mit in Manama, Bahrain, which kicks off to­day amid the eco­nomic chal­lenges the mem­ber states have been fac­ing due to the fall in oil prices.

Through the GCC his­tory, the bloc has re­al­ized a mul­ti­tude of eco­nomic and so­cial achieve­ments, but the sharp drops in crude prices on the world mar­kets since 2014, have forced the mem­bers to adopt ra­tio­nal­iza­tion, or rather aus­ter­ity mea­sures to with­stand the en­sued reper­cus­sions. They have been hard at work de­vel­op­ing mea­sures to counter any potential deficit in their bud­gets, and avoid bor­row­ing.

Ap­proaches to achieve the as­pired goals mainly fo­cus on di­ver­si­fy­ing pro­duc­tion and ser­vices, en­cour­ag­ing the pri­vate sec­tor and sup­port­ing youth to have their own en­ter­prises. Over the years, the GCC lead­ers have adopted sev­eral res­o­lu­tions and taken many steps to push ahead the wheel of econ­omy, in­dus­try, trade and de­vel­op­ment, to achieve pan-GGC in­te­gra­tion.

A ma­jor ele­ment of eco­nomic co­op­er­a­tion among the GCC states has been the Uni­fied Eco­nomic Agree­ment of 1981 that con­trib­uted a lot to the ad­vanced stages of eco­nomic in­te­gra­tion among GCC coun­tries. In the mean­time, the GCC has demon­strated ea­ger­ness to pro­mote ties with trade and eco­nomic part­ners, through nu­mer­ous frame­work agree­ments and trade and tech­ni­cal co­op­er­a­tion pacts.

In or­der to se­cure success for eco­nomic di­ver­si­fi­ca­tion, there is need for ac­ti­vat­ing a host of macroe­co­nomic poli­cies with the aim of cor­rect­ing the eco­nomic path, Di­rec­tor Gen­eral of the Arab Plan­ning In­sti­tute (API) Dr Bader Oth­man Malal­lah said.

He urged re­struc­tur­ing the economies of the mem­ber states, so that the pri­vate sec­tor could be­come a ma­jor part­ner in pro­duc­tion and em­ploy­ment; the govern­ment will no longer be the sole em­ployer, con­se­quently less­en­ing the fi­nan­cial bur­den on state bud­get. More in­vest­ments, both state and pri­vate, can be thus di­rected to the in­fra­struc­ture, or the var­i­ous sec­tors of pro­duc­tion.

The chal­lenge of eco­nomic di­ver­si­fi­ca­tion is closely re­lated to the vol­ume of govern­ment ex­pen­di­ture, which in­volves a huge pub­lic sec­tor with low ef­fi­ciency in some GCC coun­tries, Malal­lah noted. He said there is dire need to re­form, and ap­ply gov­er­nance, to the pub­lic sec­tor, as well as de­vel­op­ing the pri­vate sec­tor to at­tract na­tional la­bor.

Since the GCC was estab­lished, the mem­ber state have fo­cused on build­ing their ca­pa­bil­i­ties with open­ness and a vi­sion that set them among the ad­vanced coun­tries that mainly hold ci­ti­zens’ rights and in­ter­ests, he said.

This is the rea­son they con­cen­trated most ef­forts on of­fer­ing, and promoting, var­i­ous ser­vices to peo­ple, be­sides build­ing the hu­man cap­i­tal, and so they have come to achieve re­mark­able progress in ed­u­ca­tion, health and so­cial ser­vices, the APIU chief said. He re­ferred to the GCC agree­ments, bi­lat­eral or multi-party ones, mainly aim­ing to en­hance eco­nomic and so­cial de­vel­op­ment.

But suc­cess­ful im­ple­men­ta­tion usu­ally needs changes in the struc­ture of the economies of the Gulf coun­tries, in­clud­ing leg­isla­tive and long-term eco­nomic poli­cies. Malal­lah, in the mean­time, called for en­cour­ag­ing the cre­ative and in­no­va­tive youth, of­fer­ing fi­nan­cial and in­sti­tu­tional sup­port to small and medium-sized en­ter­prises (SMEs).

Amid the re­gional and in­ter­na­tional de­vel­op­ments and es­ca­lat­ing chal­lenges, one has to com­mend the ‘wave of re­form ini­tia­tives’ that has been worked out by the GCC mem­bers in the af­ter­math of the se­vere falls in oil prices, Kuwait Eco­nomic So­ci­ety (KES) Sec­re­tary Gen­eral Muhanad Al-Sane said.

The down­trend of oil prices over the past months has been the ma­jor chal­lenge for the Gulf area, pro­duc­ing press­ing need to di­ver­sify the sources of na­tional in­come to lessen the im­pact on their deficits, Sane added. He un­der­lined the ne­ces­sity to fo­cus in­vest­ments in in­fra­struc­ture, ed­u­ca­tion, health and econ­omy, and in the mean­time, cut un­nec­es­sary spend­ing.

Sane called for iden­ti­fy­ing the state’s pri­or­i­ties to meet hous­ing de­mands till 2013 as a first phase, then till 2050 in a sec­ond one. He stressed the mo­men­tous­ness em­pow­er­ing youth, and lur­ing for­eign in­vestors through in­cen­tive leg­is­la­tions and pro­grams. —KUNA

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