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GCC Nations Poised to Supercharge Region’s GDP by $2.5 Trillion in a Decade

GCC Countries Poised to Propel Region’s GDP by $2.5 Trillion in the Next Decade

A recent study has shed light on the potential for significant economic growth within the GCC countries, unveiling the possibility of adding over $2.5 trillion to the region’s GDP over the next decade through enhancements in productivity performance.

GCC countries
GCC countries

 

With current growth rates hovering at 3.8%, projections suggest a substantial leap to 5.4% within the span of 10 years. This optimistic outlook hinges on the strategic improvement of productivity performance, leveraging the Productivity Potential Index (PPI) to identify and address key determinants of productivity effectively. The study, titled ‘In search of productivity: The next $50 trillion global economy,’ conducted by the World Governments Summit in collaboration with Strategy& Middle East, underscores the critical importance of such enhancements.

According to the findings, the GCC’s economic trajectory could be profoundly altered by a more nuanced understanding of productivity determinants. Chadi Moujaes, a partner with Strategy&, highlighted the transformative potential of acting upon these insights, emphasizing the substantial improvement in the quality of life for residents across the region.

Dima Sayess, partner and Ideation Center lead at Strategy&, stressed the significance of adopting comprehensive metrics for measuring economic progress, integrating considerations such as environmental sustainability and social capital. This holistic approach, exemplified by the newly introduced PPI, fills a crucial void in conventional productivity measures.

Further bolstering the case for sustainable growth, the Gulf Investment Report 2023, published by Century International Holdings, outlines a vision wherein the GCC emerges as a global economic powerhouse. The report suggests that by embracing a green growth strategy, the combined GDP of the six GCC countries could double to $13 trillion by 2050, up from the projected $6 trillion. Investment in green and sustainable projects, as highlighted in the Gulf Investment Report, could serve as a catalyst for this transformative economic journey.

The key findings of the Strategy& report underscore the need for a paradigm shift in measuring productivity, moving beyond conventional metrics to encompass broader considerations such as social and natural capital. The introduction of the Productivity Potential Index represents a forward-looking approach, offering policymakers and stakeholders a robust framework to evaluate and enhance productivity across diverse criteria.

Central to this framework is an online policy simulator, enabling users to assess comparative productivity across 25 countries based on 19 criteria grouped into six categories. By estimating a country’s potential productivity given its endowments, the index provides valuable insights into avenues for improvement and optimization.

As the GCC countries navigate the complexities of economic growth and sustainability, the findings of these studies offer a roadmap for unlocking untapped potential and charting a course towards a prosperous and resilient future. Through strategic investments in productivity enhancements and a commitment to sustainable development, the GCC stands poised to realize its ambitions of becoming a global economic powerhouse in the years to come.

By introducing a forward-thinking methodology that incorporates social capital, natural capital, and institutional quality alongside conventional measures like labor and human capital, physical capital, innovation, and intangible capital, the report pioneers a more comprehensive approach to productivity assessment. This holistic perspective not only captures the multifaceted nature of economic performance but also aligns with broader sustainability objectives and societal well-being.

The Productivity Potential Index emerges as a pivotal tool within this framework, offering policymakers and stakeholders a nuanced understanding of a country’s productivity landscape. Complemented by an online policy simulator, this index empowers users to evaluate comparative productivity across diverse criteria and identify strategic interventions for optimization.

As the GCC countries embrace this transformative agenda, they stand poised to not only catalyze economic growth but also pioneer innovative solutions to pressing global challenges. By harnessing the insights gleaned from these studies and leveraging strategic investments in productivity enhancement and sustainable development, the GCC can chart a course towards a future characterized by prosperity, resilience, and inclusive growth.

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