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Gulf Economic Capabilities Are Growing, Impacting the Global Arena

The Gulf economies are among the ten largest in the world. (AFP)
The Gulf economies are among the ten largest in the world. (AFP)
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Gulf Economic Capabilities Are Growing, Impacting the Global Arena

The Gulf economies are among the ten largest in the world. (AFP)
The Gulf economies are among the ten largest in the world. (AFP)

The visits by Indian, Japanese, and Turkish leaders to the Gulf within a week reflected the region's outstanding role on the global economic scene.

They reflect the importance of economic relations between the Gulf countries and the three countries that signed financial agreements and memorandums of understanding in various sectors and fields.

Top 10 global economies

The combined GDP of the growing Gulf economies are projected to reach $ $6 trillion by 2050, according to World Bank estimates, which places them among the top ten economies in the world.

The world is led by the US with a GDP of $25 trillion, followed by China, Japan, and Germany, then India, the UK, France, Canada, and Russia, while Italy stands in the tenth place with a GDP of $1.9 trillion.

According to the World Bank, if the GCC countries implemented a green growth strategy that would help and accelerate their economic diversification, GDP could grow to over $13 trillion by 2050.

Sustainability

President of the Federation of GCC Chambers Hassan al-Huwaizi said the Gulf countries have benefited from several factors creating sustainability for the Gulf economy.

They followed the latest modern technologies in the oil and gas industry, harnessing the financial revenues of the sector to support other economic and industrial sectors to achieve added value to the Gulf economy.

They aim to establish a sustainable Gulf economy, said Huwaizi.

He indicated that the GCC countries have worked to qualify their human forces, especially their national cadres, to contribute to economic development, which helped in creating a sustainable economy.

In the past few years, the Gulf countries have implemented structural economic reforms by modernizing and developing legislation and regulations to provide more facilities and incentives supporting their economies and attracting foreign capital to non-oil sectors to reduce oil dependency.

Huwaizi stressed that the GCC countries tended to diversify the sources of domestic products by relying on other sectors such as petrochemicals, industry, travel, tourism, the entertainment sector, artificial intelligence, and the digital revolution.

He explained that the development and sustainability of the oil industry and the qualification of national cadres, attracting foreign investment, and diversifying sources of GDP had a role in creating sustainability for the Gulf economy.

Impacting the global scene

The expert addressed the impact of the Gulf economy on the global economy, saying it stands among the top economies because of its domestic solid product.

Petrochemicals, aviation, ports, industry, and the financial sectors ensured the stability of the global economy, said Huwaizi, noting that Gulf leaders are keen to achieve regional political and security stability, which boosts international peace.

He also referred to the efforts of the GCC states to build strategic partnerships with global economic blocs, including the US-Gulf Summit in Jeddah in July 2022 and the Riyadh Arab-China Summit for Cooperation and Development, affirming the Gulf states' endeavor to boost strategic partnerships.

Strengths

Huwaizi identified the strengths of the Gulf economy by benefiting from the technical and information revolution, supporting the growth and development of all sectors.

The GCC countries supported the oil and gas industry sector and harnessed advanced modern technologies, starting with exploration and production, refining, and distribution operations, which provided the budgets of the Gulf states with huge financial revenues.

The Gulf states possess an advanced financial and banking sector with substantial financial assets, capital, and investments, said Huwaizi.

He added that the GCC countries had made great strides towards achieving economic unity by adopting the customs union system, Gulf rail and electrical linkages, and implementing the Gulf common market.

The developments increased intra-regional trade between the Gulf states to approximately $102.8 billion in 2021.

The cumulative number of licenses granted to GCC citizens who carry out economic activities in other member states has also increased to more than 60,000 until the end of 2021.

Non-oil sectors

Huwaizi noted that the GCC countries were keen to diversify their economy by supporting and developing other sectors besides oil and gas.

The Gulf states believe the petrochemical sector is among the most important for construction and development, he said, adding that the Gulf industry sector's contribution to the GDP exceeded more than 11.5 percent.

The Gulf private sector, represented by the Federation of GCC Chambers, will play an essential role in defining the investment opportunities available in the region, said Huwaizi.

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Business

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.

Business

Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
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Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat

Saudi Minister of Finance Mohammed Aljadaan stressed Sunday that the world economy is going through a “profound transition,” saying emerging markets and developing economies now account for nearly 60 percent of the global Gross Domestic Product (GDP) in purchasing power terms and over 70 percent of global growth.

In his opening remarks at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla, the minister said these economies have become an increasingly important driver of global growth with their share of global economy more than doubling since 2010.

“Today, the 10 emerging economies in the G20 alone account for more than half of the world growth. Yet, they face a more complex and fragmented environment, elevated debt levels, slower trade growth and increasing exposure to geopolitical shocks.”

“Unfortunately, more than half of low income countries are either in or at the risk of debt distress. At the same time global trade growth has slowed at around half of what it was pre the pandemic,” Aljadaan added.

The Finance Minister stressed that the Saudi experience over the past decade has reinforced three lessons that may be relevant to the discussions at the two-day conference, which brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics.

“First, macroeconomic stability is not the enemy of growth. It is actually the foundation,” he said.

“Structural reforms deliver results only when institutions deliver. So there is no point of reforming ... if the institutions are unable to deliver,” he stated.

Finally, he said that “international cooperation matters more, not less, in a fragmented world.”

Business

Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
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Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said Sunday that world growth still lacks pre-pandemic levels, expressing concern as she expected more shocks amid high spending and rising debt levels in many countries.

Georgieva spoke at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla.

The two-day conference brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics to deliberate on policies to global stability, prosperity, and multilateral collaboration.

Georgieva said that the conference was launched last year in recognition of the growing role of emerging market economies in a world of sweeping transformations.

“I came out of this gathering .... With a sense of hope for the pragmatic attitude and determination to pursue good policies and build strong institutions,” she said.

Georgieva stressed that “good policies pay off,” and said that growth rates across emerging economies reached four percent this year, exceeding by a large margin those of advanced economies that are around 1.5 percent.