The Brookings Doha Center (BDC) hosted an event yesterday to discuss the challenges facing Qatar and other GCC countries to diversify their economies in an era of demand-driven energy markets. While these countries understand the importance of diversifying their economies and have taken steps towards diversification, the changes have been slow. The event discussed how GCC countries can kick-start and accelerate their moribund economic transitions, as well as the economic and geopolitical consequences of abundant global oil supplies on the GCC.
Panellists included Hatem Al Shanfari, professor of economics and finance at Sultan Qabus University; Khalid Al Khater, researcher at the Institute for New Economic Thinking at the University of Cambridge; Nader Kabbani, director of research at the Brookings Doha Center; and Samantha Gross, fellow in the Cross-Brookings Initiative on Energy and Climate at the Brookings Institution.
The event was moderated by Tarik Yousef, director of the Brookings Doha Center and was attended by members of Doha’s diplomatic, academic, and media communities Center and was held at the Intercontinental Hotel in Doha.
Tarik Yousef opened the discussion by saying that despite foreign policy differences, economic diversification is an important unified objective within the GCC. However, the recent Gulf rift has dealt economic diversification a significant political and economic block.
Yousef stated, “One of the achievements of the GCC was to bring about economic integration beyond oil and gas and to bring about economic diversification. The blockade has hurt this aim.” Samantha Gross talked about the difficulties of economic diversification in the GCC, saying, “Economic diversification in the Middle East is a real challenge, because the oil and gas industry is so productive, and it throws off so much income that it becomes difficult for other industries to compete with that.”
Khalid Al Khater discussed what the GCC countries have done to meet the goals of diversification, saying, “We must reform private and public sectors to create an incentive for human capital-building.”
Al Khater focused on the various sectors that need to be addressed, including youth unemployment, public sector employment, migrant workers, labor market, and the pressure this puts on infrastructure and building human capital.
Hatem Al Shanfari discussed better management of water and renewable energy sources, saying that water is a scarce source and there are many opportunities in this.
He said, “There are many opportunities that can be created within the oil and gas industry. To help the country and the oil and gas sector, we need to better link up to the global supply chain.”
Nader Kabbani discussed the issue of peak demand, saying, “We might soon see structural shifts in the energy sectors. Renewable energy sector is moving faster than natural gas. Big changes in how energy is stored will have huge impacts on the energy sector.”