GCC in the Midst of Global Changes: Responding to a New Economic Order
FromDec 08, 2019 To Dec 09, 2019
Muscat, Sultanate of Oman
Since the early 1970s, successive economic development plans in each of the six members of the Gulf Cooperating Council have emphasized economic diversification as the major path towards achieving long-term sustainable growth. Oil revenues were used to realize investments in infrastructure, provision of services and in particular education and health as well as to build up savings in sovereign wealth funds and other external saving instruments. The oil revenues were also used to provide for transfers and jobs to nationals in the public sector with relatively higher wages and benefits than is offered in the private sector. Thus, growth in the GCC economies became increasingly driven by public spending which, in turn, tilted the production structure towards non-tradable goods and services at the expense of tradables. Importantly, no GCC country has managed to create the required human capital to generate sophisticated exports and drive economic diversification forward.
The decline in oil prices that began in 2014, combined with increasing demands on governments’ purses led the GCC economies to shift their attention to structural reforms designed to promote productivity and encourage the private sector to assume a larger role in the economy. Efforts at structural reforms should focus on: Building a robust human capital base and develop the institutional capacity for effectively deploying it in order to affect the orientation toward the knowledge economy; Following a “rules-based” economic policy framework rather than “discretionary” processes; Steering the structure of incentives in the economy towards skill- intensive tradable sectors that could also provide attractive jobs for nationals; and, Engineering a much more sophisticated industrial policy that encourages productivity growth.
The above suggested development strategy entails undertaking a coherent set of institutional and policy reforms at both the micro and macroeconomic levels as well as critical assessing the social consequences of the current and potential economic programs.
Conference Objectives
Subscribing to the above overview, the ERF and a consortium of GCC universities have recently launched the GCC Economic Research Initiative (GCCeRI), which is aimed at building a network for GCC researchers where they can interact with each other and the wider ERF research community to share ideas and collaborate on policy-oriented research. In this context, the GCCeRI would provide a platform for GCC researchers and policy makers to discuss research and policy issues as well as regional and global developments; and, disseminate research outcomes to the public through means of publications, newsletters, conferences and workshops. This conference is designed to be the major inaugural event of the GCCeRI.
The conference will start with a keynote speech that discusses the Oman experience in diversification and the new economic vision Oman 2040. It will also discuss the opportunities and challenges facing the GCC economics. It will look at how the GCC countries are adjusting to the low oil price environment, the role of oil in macroeconomic stability, the speed of fiscal adjustment, and the challenges of sustainability. In addition, it will discuss the role of Islamic Finance in terms of macroeconomic stability.
Conference Organization
The conference is organized jointly by the Economic Research Forum and the College of Economics and Political Science at the Sultan Qaboos University. It will convene around 70 researchers from the region and outside it and will last for two days.
Draft Conference Agenda (Last updated: 27 November, 2019)
Sunday, December 8, 2019
Opening and Plenary Session: GCC in the midst of Global Changes: Responding to New Economic Order
Chairperson: Dr. Fatima Al Shamsi, Economic Research Forum
Welcome Remarks: Dr. Sherine Ghoneim, Economic Research Forum
Opening Remarks: Dr. Khamis Al-Yahyaee, College of Economics and Political Science
Keynote Speaker: H.E. Yahya Al-Jabri, Chairman of Special Economic Zone Authority of Duqm
Oman has recently introduced a number of new laws that are intended to promote investment in non-oil sectors as a mean to diversify its economy. Also, the government has been working hard to create a business friendly environment for the private sector to grow and contribute more effectively to the diversification drive in Oman. In spite of the current macroeconomic challenges, due to the drop in oil prices in the past few years, the country has made important progress in attracting foreign investment and look forward to do more in the future. The government in partnership with all its stakeholders in the country has prepared a new economic vision Oman 2040 that will be implemented starting in 2021.
Plenary Session: GCC in the midst of Global Changes: Responding to New Economic Order
The session will provide an overview of the challenges and opportunities facing the GCC nations. It will feature speakers and policy makers who are currently or have previously been in academic and policy leadership positions.
Panelists:
- H.E. Sheikh Abdullah Al-Salmi, Executive President of Capital Market Authority
- H.E. Abdulsalam Al-Murshidi, Executive President of the State General Reserve Fund
- H.E. Tahir Al-Amri, Executive President of the Central Bank of Oman
- Dr. Majid Al-Moneif, King Abdullah Petroleum Studies and Research Center and ERF
Moderator: Professor Saeed Al-Muharrami, College of Economics and Political Science
Session 2: Oil, Fiscal Policy and the Macroeconomy
Session Chair: Dr. Hatem Al-Shanfari, SQU
Speakers:
- Ibtisam Al Abri, Gülcan Önel, and Kelly A. Grogan, Oil Price Shocks and Macroeconomic Instability in an Oil-Dependent Economy
- Assil El Mahmah and Magda Kandil, Fiscal Policy in the GCC: Challenges of sustainability
- Moez Ben Tahar, Mohamed Ali Houfi, and Sarra Ben Slimane, Fiscal Multipliers And Prospects For Consolidation: Evidence From GCC Countries
- Essahbi Essaadi and Rafik Jbir, The recent dynamic relationship between oil price shocks and global economy: the case of MENA Countries
- Kassim Dakhlallah, Economic Growth and Total Factor Productivity for a Resource-Rich Economy Under Uncertainty: The Case of the United Arab Emirates (UAE)
This panel looks at how the MENA region and the GCC countries in particular are adjusting to the low oil price environment, the role of oil in macroeconomic stability, the speed of fiscal adjustment, and the challenges of sustainability.
Session 3: Climate Change and Environment
Session Chair: Dr. Reza Agdam, SQU
Speakers:
- Sufian Abdel-Gadir, Energy Consumption, CO2 Emissions and Economic Growth Nexus in Oman: Evidence from ARDL Approach to Cointegration and Causality Analysis
- Assil El Mahmah and Amine Amar, Food Security in the GCC: Is it a climate issue
The Middle East and North Africa (MENA) region is very vulnerable to climate change, more so than other regions, mainly due to their existing climate and their limited ability to adapt. It is facing several environmental challenges, such water scarcity, drought, and low precipitation, which in turn has implications for economic growth and food security.
The December 2015 Paris Agreement represents an important milestone for the international community’s coordination efforts in reducing greenhouse gases and controlling the global average temperature to less than 2ºC above pre-industrial levels. Consequently, MENA countries need to act proactively by identifying the related risks to be able to design proper climate policies in a way to be incorporated into their development strategies and fiscal planning in general.
Monday, December 9, 2019
Session 4: Labour Panel
Session Chair: Dr. Usamah Al Farhan, SQU
Speakers:
- Wasseem Mina, Second-Generation Labor Market Policies and FDI Flows to GCC Countries
- Nader Kabbani and Nejla Ben Mimoune, The Determinants of Entrepreneurship Intentions and Activity Among Qatari Nationals
- Abdelghani Echchabi, Mohammed Mispah Said Omar, and Abdullah Mohammed Ayedh, Entrepreneurial intention among female university students in Oman
In spite of their wealth and advanced governance structures, countries of the GCC continue to face a number of socio-economic challenges, such as improving educational outcomes, diversifying their economies, and enhancing the institutions responsible for social support. This panel examines human capital development, labor dynamics and entrepreneurial intentions and activity in the GCC. It also examines human development and social outcomes, including poverty and inequality. The panel includes a strong policy element focusing on labor market, social development, and private sector development policies.
Session 5: Inclusive Growth and Economic Integration
Session Chair: Dr. Azmat Gani, SQU
- Hassan Hakimian, Converting Oil Rents to Inclusive Growth: Lessons for the GCC Region
- Russell Kruger, Erwin Nierop, and Raja AlMarzoqi, Economic Integration in the GCC
- Usamah Alfarhan, What Makes the Difference: Decomposition of Tourist Expenditures in Oman
This panel will focus on whether the GCC countries’ growth experience has been ‘inclusive’ in the sense of benefitting the widest social and economic sections of the population. This overarching question is formulated and examined in the wider, comparative, context of both oil- and non-oil exporting countries in the MENA region as well as over different time periods in the first decade and a half of the 2000s.
We will also discuss the GCC’s objective of economic integration. Moving progressively through increasing stages of integration involves various preconditions and requirements. But what would a formal blueprint for regional integration look like?
Session 6: Finance, Risk, and Inclusiveness
Session Chair: Dr. Syed Mujahid Hussain, SQU
- Fatma Mohamed Mabrouk and Noreha Halid, Inequality and Inclusive Finance In Saudi Arabia
- Mughees Shaukat, Islamic Finance, in the Light of Institutional and Regulatory Framework, for Marco-Economic Resilience and Multi-Polar Economic World
- Khamis Al-Yahyaee, Syed Jawad Shahzad, Walid Mensi, and Seong-Min Yoon, Is there a systemic risk between Sharia, Sukuk, and GCC stock markets? A CoVaR risk metric-based copula approach
This panel discusses the role of Islamic Finance (which has grown unprecedentedly) in terms of macroeconomic stability, it examines the relationship between income inequality and financial inclusion, and discusses the upside and downside risk spillovers between the GCC and related Dow Jones Sukuk and Sharia stock markets in extreme market conditions.
Closing Session and Next Steps
Conference papers will be shortly available as part of the ERF Working Papers Series.