Gulf Economic Barometer

The Gulf Economic Barometer monitors initiatives taken by Gulf states as they seek fiscal, monetary, and labor policy changes to meet the challenge of reduced state revenue from natural resources. The key trend is a major shift in the way the GCC countries have been spending on public sector wages, infrastructure, and social services over the last decade. The GEB documents the policy changes as they are announced and/or implemented by country and by sector and is updated regularly as data becomes available. The information here is neither official nor exhaustive.

Oman's state-owned Duqm refinery closes $4.6 billion in financing from domestic and international sources.
Umm Al Quwain, one of the UAE's 7 emirates, issues royal decree increasing government salaries by 100 percent.

7 Visa Rules Changes in the UAE [Infographic]

7 Visa Rule Changes in the UAE The UAE announced several changes to its visa guidelines in a number of categories, including for workers, students, and tourists. The government will allow people escaping or subject to political violence in their home countries to apply for a 1-year visa with the potential for extension, despite not being a signatory of the U.N. refugee convention.

Abu Dhabi Stimulus Plan [Infographic]

Abu Dhabi Stimulus Plan The government of Abu Dhabi announced a $13.6 billion stimulus package aimed at supporting economic development over three years. Crown Prince Mohammed bin Zayed al-Nahyan instructed officials to draw up detailed plans for allocating the funds over the next 90 days. Abu Dhabi's economy has stagnated in recent years as a result of lower oil prices, as well as austerity measures taken by the government to curb the rise in deficits. The new stimulus package includes 10 initiatives designed to streamline bureaucratic regulations and facilitate the ease of doing business in the UAE.

The Bridge: Competing Megaprojects in Kuwait and Saudi Arabia.

Kuwait Boubyan Island
by Robert Mogielnicki During the March 25 Kuwait Investment Forum, Kuwaiti government officials reaffirmed the country’s commitment to develop the Silk City (Madinat al-Harir) megaproject and establish an integrated economic zone on five uninhabited Kuwaiti islands.

Market Watch: Saudi Economic Reform Update: Saudization and Expat Exodus

Oil worker in Khurais by Karen E. Young The experimental nature of Saudization begs many questions of which sectors are targeted and why, and how smaller businesses will be able to assume higher wage costs of hiring nationals.

Market Watch: Payment Delayed: The Economic Risk of Gulf Contracting Practices

Dubai Construction by Karen E. Young Like the Bin Laden Group and Saudi Oger, Carillion has proved that the construction of megaprojects in the Gulf, however lucrative and central to state-led development plans, is full of pitfalls.

Market Watch: New Year, New Economic Pain

The new year is likely to bring some serious economic pain to parts of the Gulf, especially Saudi Arabia.

Market Watch: Saudi Arabia’s Neom — State-Led Growth Meets New Global Capitalism

Crown Prince Mohammed bin Salman envisions a new kind of Saudi Arabia, or at least the opening of a space complete with yoga studios, beach resorts, and robots in place of migrant laborers. This is the image of Neom, the $500 billion master project to develop an over 10,000 square mile swath of land in the northwest corner of Saudi Arabia on the shores of the Red Sea, adjacent to Egypt’s Sinai Peninsula and southern Jordan.  

Market Watch: The Cost of Private Education

Emirates German Foreign Minister

Education is costly, and in the Gulf, it is becoming a very important component of private sector economic activity.

Market Watch: The Political Perils of Economic Liberalization in the Gulf

by Karen E. Young Economic liberalization tends to bring with it social, if not always political, openings. By definition, liberalization challenges existing orders; more specifically, liberalization tries to deny the state a dominating role in the economy. State-led capitalism, as practiced in the Gulf states over the last 40 years, has invited foreign investment and migrant human capital, but it has always privileged the state and protected opportunity for citizens, most visibly via commercial agency laws and the kafala system.


Issue Paper: Private Financing, Ownership, and Management of Gulf Infrastructure

Prince Mohammad Bin Abdulaziz International Airport in Medina, Saudi Arabia.

by Justin Alexander
In response to fiscal pressures and concerns about the efficiency of project and service implementation, Gulf Arab states are increasingly looking to the private sector to finance and manage infrastructure projects.  

Market Watch: Self-Imposed Barriers to Economic Integration in the GCC

by Karen E. Young Qatar has lodged a complaint with the World Trade Organization against the United Arab Emirates, Saudi Arabia, and Bahrain for blocking its air traffic and increasing the costs of basic food and medicine imports. Though intra-Gulf state economic relations continue to suffer as a result of the current crisis, there are long-standing barriers to trade and investment flows that deserve consideration.  


The Bridge: Qatar Must Adapt SEZs to New Regional Geopolitical Realities

by Robert Mogielnicki
The Saudi, Bahraini, and Emirati efforts to isolate Qatar logistically as part of the most recent Gulf Cooperation Council crisis will require a restructuring of the country’s plans for special economic zones (SEZs) – commonly known as free zones (FZs) in the rest of the GCC states.


Market Watch: Turkey’s Economic Stake in the GCC Dispute

by Karen E. Young On the heels of the G-20 summit in Hamburg, Turkish President Recep Tayyip Erdogan announced plans to visit Kuwait, Saudi Arabia, and Qatar. As the Gulf Cooperation Council diplomatic crisis continues, Erdogan’s presence likely will do little to calm regional tensions.


Issue Paper: Prioritizing Renewable Energy in a Time of Fiscal Austerity

Surging population growth, large-scale infrastructure investment, and economic development progress have led to increased energy demand in the Gulf Cooperation Council states. Since late 2014, the new normal of low oil prices has necessitated fiscal constraints and at the same time prompted greater interest in renewable energy sources.

Market Watch: Qatar Crisis Heightens Obstacles to the Economic Reform Agenda

by Karen E. Young While there are professed visions of change away from state-led growth, in which new private sector dynamism and the expansion of Gulf equity markets would employ citizens and wean states from oil and gas revenue, the realities of politics on the ground in the last two weeks demonstrate there are more powerful forces at play.

Market Watch: GCC Crisis: Implications

by Karen E. Young As tensions across the Gulf Arab states escalate, measures taken against Qatar are impacting trade, business, and food security. Here are some implications of the ongoing diplomatic fallout with Qatar.


Market Watch: Isolating Qatar Reveals Economic Vulnerabilities of the GCC

by Karen E. Young The Saudi, Bahraini, and Emirati efforts to isolate Qatar diplomatically and logistically from its Gulf Cooperation Council partners highlights structural weaknesses in many of the Gulf states, not just Qatar.

Issue Paper: War at Any Price: Domestic and Regional Economic Consequences of Yemen’s Civil War

by Karen E. Young The civil war in Yemen is now approaching its fourth year, and the rising cost of the conflict in its humanitarian disaster and continued investments by the warring parties in military expenditures suggest that cost is not a deterrent or impediment to war. While the immediate costs to the Yemeni people have been clear, the future cost to Gulf neighbors, Saudi Arabia and the United Arab Emirates in particular, may be more than these states have estimated.


Market Watch: Limited Benefits to U.S. Infrastructure in Saudi PIF Investment

by Karen E. Young Trump may have elicited a deal that serves the interests of Saudi Arabia and the fund managers receiving the investment, but not necessarily filling a funding gap in an already deep pool of U.S.-based investor interest.

Market Watch: As Reform Agenda Waffles, Citizens Take Life to the Streets

by Karen E. Young Despite slowdowns in consumer demand and general economic activity, there is evidence of alternative economic behavior and microenterprise that is thriving in the Gulf.

The Bridge: Bahrain Beckons Tourists as It Diversifies Its Economy

Sunset in Manama, Bahrain by Omar Al-Ubaydli In the last few years, the Bahraini government has launched a multipronged strategy to ensure that the kingdom’s page is more frequently read by the world’s travelers. Can it succeed in a region riddled with security threats?


Market Watch: The Lure of Technology in the Gulf

by Karen E. Young Gulf states are turning to technology as a placement for outward investment and as a source of generating jobs and economic growth in domestic markets.

Market Watch: Economic Nationalism at the Expense of GCC Integration

As a burgeoning global trend, economic nationalism is also surging in the Gulf states. What may be lost is the decade of efforts in economic integration and negotiations to make the GCC work as a common market, with complementary assets.

The Bridge: Restructuring of Saudi Arabia’s Energy Industry Gathers Pace

by Diane Munro Saudi Arabia is powering ahead with ambitious plans to reorganize its massive energy sector. The restructuring is part of its strategic plan to reduce domestic oil dependence and adopt a more commercial approach to its business operations at state oil company Aramco as part of Vision 2030 and ahead of the historic initial public offering set for 2018.

Market Watch: Oman’s Fiscal Management Problem

by Karen E. Young For Oman, balancing domestic pressures against necessary economic reforms is proving difficult.

The Bridge: UAE-India Diplomatic and Economic Ties Strengthen

While the United Arab Emirates and India have maintained a relatively healthy bilateral relationship, cooperation has recently appeared to be growing.

Market Watch: Pricing the Trump Risk in Gulf Economies

by Karen E. Young The beginning of the Trump administration points to, at the least, a heightened period of political and economic risk, which Gulf governments, financial institutions, and businesses will have to price, assess, and manage.

Market Watch: International Trade, Investment, and Finance in the Trump Administration

by Karen E. Young Trump’s pro-growth agenda will need partners, and the GCC states are also looking for investment partners in their diversification efforts and for placements for state-owned investment vehicles. It will be the politicization of these partnerships that will create the most risk.

The Bridge: Abu Dhabi Share-Swap Deal with BP Forges New Contract Model

by Diane Munro Abu Dhabi capped a year of unprecedented change at state oil company Abu Dhabi National Oil Com­pany (ADNOC) with a landmark $2.2 billion share-swap with legacy partner BP. The unique model for a joint venture gives Abu Dhabi a 2 percent stake in BP in exchange for a 10 percent share in the country’s main onshore oil concession.

Market Watch: Reformers are Holding Ground: Saudi Arabia’s New Fiscal Policy

by Karen E. Young The Saudi budget for 2017 demonstrates that fiscal reform works; at least, it shows that with a reduction in spending will come a decline in deficit.

Market Watch: Easing Labor Market Restrictions in the Gulf

by Karen E. Young In the GCC, there is an effort to recalibrate the relationship between foreign workers and Gulf national economies, in both the reliance on foreign labor and the downward pressure it has on service sector salaries.

Issue Paper: Women’s Labor Force Participation Across the GCC

The current challenge for the oil and gas exporting states of the Gulf Cooperation Council rests in diversification of their economies, and perhaps more importantly, in the activation of a more productive and efficient workforce.

Market Watch: Saudi Arabia’s Impeccable Timing in Debt Markets

by Karen E. Young Saudi Arabia's unprecedented bond sale worth $17.5 billion had impeccable timing, given Donald Trump's victory in the U.S. presidential election.

Market Watch: The Irony of Kuwait’s Economic Reform Agenda

Kuwaiti Emir Sheikh Sabah al-Ahmed al-Sabah attends the closing session of the 36th Gulf Cooperation Council Summit in Riyadh, Saudi Arabia, Dec. 10, 2015. (AP Photo/Khalid Mohammed) by Karen E. Young

There are a number of ironies in this latest political development in Kuwait.

Issue Paper: Water at the Nexus of Gulf Security and Growth Challenges

by Mai Mahmoud Gulf Arab states face some of the most severe water shortages in the world. The situation emerges from limited availability of renewable water resources and escalating demands that result from the quick pace of economic development, rapid population growth, changing consumption patterns, and management inefficiencies.  

Market Watch: For Saudi Economic Reforms, Timing is Everything

A man walks past a building under construction in Riyadh, Saudi Arabia. (AP Photo/Hasan Jamali) by Karen E. Young

Saudi Arabia has been a feast or famine economy, but that pattern is not suited to today’s global economy and the need to solicit capital from many sources and to make good on commitments to foreign investors.

Issue Paper: Economic Diversification Plans: Challenges and Prospects for Gulf Policymakers

by Kristian Coates Ulrichsen By focusing on the practical and political challenges of technocratic and economic reforms, using specific examples to illustrate broader thematic points, this paper analyzes what the current generation of officials need to do differently to secure more favorable and sustainable results.  


Market Watch: The Economic War in Yemen: Oil Revenue and Debilitated Financial Institutions Weaken Recovery Hopes

Firefighters work to extinguish a fire following rocket attacks by Houthi fighters at storage tanks of an oil refinery in Aden, Yemen, July 14, 2015. (AP Photo/Abo Muhammed) by Karen E. Young

It is in the interest of all the warring parties in Yemen to retain the basic institutions, especially the central bank, that will be necessary to fund and administer a peace, when it finally does come.


Market Watch: GCC Sovereign Debt in a Low Yield World

People walk by an electronic stock board of a securities firm, in Tokyo on February 15. The realization is dawning that growth may continue to underperform, while in Japan the yield on 10-year bonds briefly turned negative. (AP Photo/Koji Sasahara) by Karen E. Young Low yields result in more accessible capital for GCC states, however repayment could be a challenge in the long term.

Market Watch: Smart(er) Money in the Gulf

State-owned funds like Mubadala in the United Arab Emirates are consolidating their operations.

With smarter money, even in a time of diminished fiscal revenue, the GCC states could become formidable investors.

Issue Paper: Gulf Islamic Finance in a Time of Austerity

by Mai Mahmoud
Islamic finance has grown in importance in most of the Gulf Cooperation Council countries since 2013. Islamic banks now represent more than 25 percent of the banking system in the GCC, and the region’s sukuk (sharia-compliant financial securities) market is the second largest in the world after Malaysia.

Market Watch: Saudi’s Summer of Anticipation

Khalid al-Falih, Saudi Arabia's newly appointed energy minister, at the World Economic Forum in 2011. (AP Photo/Virginia Mayo)

Economic uncertainty shrouds Saudi’s performance during the summer months.

Market Watch: Understanding Vision 2030: Anticipating Economic Change in Saudi Arabia

Saudi Arabian Deputy Crown Prince Mohammed bin Salman (AP Photo/Hasan Jamali)
Vision 2030 is a first step in a radical attempt to change Saudi Arabia’s dependence on oil, but also its fundamental political economy, the way that the state and the economy interact.

Market Watch: The Debt Roadshow Begins

by Karen E. Young GCC states show significant interest in sovereign debt, in the form of bonds and loans.

Market Watch: Business Politics in the Gulf

A brief look at state-business relations in the Gulf Cooperation Council states.

Market Watch: Gulf Economic Statecraft Hits Lebanon

The GCC states have collectively imposed an informal set of economic sanctions on Lebanon.

Market Watch: Declining Gulf States’ Financial Support Adds to Egypt’s Currency Woes

The Egyptian economy is put under further pressure as aid becomes less of a priority for GCC states.


Market Watch: Blood in the Water: Speculation on Gulf Currency Pegs Misses First Victims of Downturn

by Karen E. Young The real victims of the oil slump could be in the domestic economies, from local banks to small and medium size enterprises, to those businesses most closely connected to the energy sector, and those contractors servicing infrastructure growth.

Market Watch: The Perfect Storm: Labor Markets and Economic Downturn in the Gulf

Amid fiscal deficits, bloated public sectors, and accelerated efforts to create jobs and diversify economies, there is a perfect storm on the horizon for GCC states.

Market Watch: Enter China: The New Bilateral Middle East Aid-Security-Trade Nexus

There is an important new donor seeking to enter the fray, to cement trade relationships and a regional presence – China.

Market Watch: GCC Bank Sector Under Pressure

The commercial banking sector in the GCC comes under pressure as oil prices continue to decline.

Market Watch: What Would Russia Do? Why Saudi Arabia’s Break with Iran Makes Bad Economic Sense

by Karen E. Young Breaking diplomatic ties with Iran might result in Saudi Arabia missing out on a regional economic success story.

Issue Paper: The Economics of Migrant Workers in the GCC

by Omar Al-Ubaydli The presence of large migrant communities has made the Gulf Cooperation Council (GCC) countries a lightning rod for an immigration debate.  

Market Watch: Gulf States’ Fiscal Situation Accelerates Consensus for Economic Reform

The current fiscal climate, in which all of the GCC states face deficits due to declining oil and gas revenues, is enabling a new consensus for economic reform.

Market Watch: Why Renewable Energy Makes Sense for the UAE

For the United Arab Emirates, the political incentives for a renewable energy commitment are as compelling as the economic case.

Market Watch: Egypt’s Economic Recovery Linked to Gulf Banks and Foreign Investment

The stability of Egypt may depend on regional financial cooperation and intervention.

Market Watch: It’s all in the Financing – Renewable Energy Potential in the GCC and Iran

While both economic and environmental concerns are driving reform processes across the Gulf Cooperation Council states, the real innovation is in how Gulf states harness their business acumen to attract investment and design deals that work for local financial markets, governments, and developers.

Market Watch: “Monetizing Assets” – Has a Great Gulf Sell-Off Begun?

by Karen E. Young Oil and gas producing states in the region have started to sell off their assets in order to offset the declining energy prices.

The Qatar General Electricity and Water Corporation (Kahramaa) hikes water and electricity charges, under new consumption-based tiered pricing system.

The Qatar General Electricity and Water Corporation (Kahramaa) hikes water and electricity charges, under new consumption-based tiered pricing system.

Market Watch: Declining Gas Prices, Asian Demand, and Effects on Qatar

by Karen E. Young As energy prices stay low and demand decreases, Qatar, like many GCC states is under increased pressure to strengthen political ties and avenues of economic cooperation with Asia.


Market Watch: Volatile Global Markets and the Arab Gulf States

Many investors have long anticipated an economic slowdown, but the timing couldn’t be worse for the Arab Gulf states.