Gulf Cooperation Council States Are in a Virtuous Circle of Growth

摘要

Oil at $130-plus a barrel is certain to focus attention on the Middle East, and particularly on the six states of the Gulf Cooperation Council (GCC) as their economies continue in an upward trajectory. Annual growth rates in most GCC states are now averaging at least 7 percent, and the value of GCC projects currently under way runs into the trillions of dollars. However, Walid Shihabi, chief economist of Shuaa Capital, an investment bank in Dubai, warns against exaggerating oil's contribution to the current boom. "The price of oil as a driver of the Gulf Cooperation Council (GCC) economies is overestimated,"he says. "It was the key element in the start of growth over the past five years, but the rise in commodity prices alone is not enough to spur development, and the growth of their economies in general is not tied to oil." Shihabi believes the real drivers are the activation of the private sector, a better business infrastructure, growth in consumption capacity and rising population numbers. "Companies do not monitor oil prices on a day-to-day basis; they are driven by the real economy," he says. "We are in a virtuous circle of growth, and will be for some time to come."