Expert Speak Young Voices
Published on Jan 06, 2020
Prospects of knowledge economies in the Gulf

In November 2019, the United Arab Emirates hosted the sixth annual knowledge Summit under the title Knowledge: The Path to Sustainable Development. It is an event which aims to provide a forum to world level experts and policy makers to discuss the best practices to be adopted for addressing the challenges of the future, such as security, skill based education, innovations and entrepreneurships and also aspects such as climate change and sustainable development. The event promoted new ideas and innovative solutions that it brought to the attention of the audience. Apart from this, there are also other nations in the Gulf region taking steps to embark on a journey of economic diversification and sustainable development, due to the multitude of changes that they are witnessing domestically and internationally.

It is not unusual for the Gulf nations to become cognizant of the need to bring a paradigm shift in their economic structure, given the vicissitudes in the aspirations and the changing socio-economic demands that we are witnessing in the present generation. A country which was once the dominant player in the oil trade market can no longer boast of its resources, largely due to the technological advancements that has been achieved globally and the initiatives which are being taken by oil dependent nations to reduce their dependence on oil imports for economic growth leading to substantial decline in demands. It is pertinent for the survival of every nation to make adjustments as per the changes in time, and open doors for new initiatives to sustain themselves and their people.

Realizing the urgency of the matter, the Gulf countries accelerated the pace of their economic diversification programmes and formulated their respective plans as per their own needs and requirements to give effect to their vision. This was christened as Knowledge Based Economy, which would stand on the pillars of innovations, research and development in science and technology, entrepreneurship and investments and also education and training for job generation and economic growth. These initiatives would then push for an open and participative economy by making a large chunk of the youth population to use the opportunities being provided to them by the structural changes and infrastructure developments that have been undertaken. Saudi Arabia has formed their Saudi Vision 2030 and Bahrain’s initiative is called Vision 2030, while Kuwait has its vision planned out as the Sate vision of Kuwait 2035. The nations have drafted these plans as per their own needs, keeping in mind the political and economic components in their own country. Then other Gulf Cooperation Council (GCC) nations have their respective initiatives for the same. The successes of the programmes are usually measured by making an annual assessment of the earnings being generated by each country from the non-oil sector. Gulf countries have also aimed for bringing changes in the education and skill training for their youth, something where they have been lacking as yet. Recently in his keynote address at the Euromoney Saudi Arabia Conference, finance minister Mohammad-Al Jadan said that Saudi Arabia is committed to working with other nations towards achieving ‘global economic prosperity’. He also outlined the initiatives being taken by his kingdom to bring changes in the labour market, education and skill training and also to create a vibrant investments and banking sector. The knowledge summit in UAE was also about the steps to be taken in skills and education industry to empower the youth. The founder CEO of Eduro Learning said “We are focusing on how to redefine knowledge in the knowledge economy because the idea of knowledge has changed”. Today knowledge is no more about degrees, but of practical training and the ability to think innovatively, which requires substantial exposure.

Even though the roadmap has been drawn for achieving this dream, the Gulf countries have a long way to go. The region is still pre-occupied with political instability and proxy wars creating uncertainities across the board. There seems to be minimal yearning for reconciliation, and political agreement amongst these recalcitrant nations is a long lost dream. Saudi Arabia and Iran are still engaged in a proxy war in Yemen (Iran is said to be supporting the Houthis which Saudi Arabia is fighting) to obstruct one another from becoming the dominant players in the region, and even the GCC is divided among political lines and lack of trust in one another. Moreover, recent developments have seen the breakout of protests against the ruling dispensation due to rising corruption and economic downturn. The unrest in the region is further worsening the situation with the spread of radicalization and the presence of terror groups such as ISIS. The above mentioned statement by the Saudi finance minister would totally be redundant in the backdrop of events such as the Aramco bombings which panicked major oil importers such as India. These problems in the region stand imposingly in front of long-term economic plans of the region. Military theatrics have pushed the Gulf nations to spend more on arms and missiles, rather than jobs and training. The education system of many countries in the GCC falls short of creating a vibrant modern day workforce. Moreover, the excessive state control of economy (mainly oil business) by the political and business elites also marginalize a large chunk of the population from instituionalised participation and entrepreneurship. This nexus has to be broken if the region really wants to become the store-house of research and innovation.

To prepare itself for the Great Leap Forward of the 21st century, the Gulf needs to bring the required economic adjustments necessary for its own survival and security. The war-weary ambitious youths of the region need a stable and peaceful ecosystem devoid of jingoism and threats. This can only come by building close relations among the nations both inside and outside the GCC. The initiative for diversifying the economy would play a crucial role in bringing them closer to one another. Opening trade barriers and also multiplying exports of both goods and services would make them a prominent player in the non-oil market. This would also lead to greater connectivity and assimilation of the people both at the cultural and economic level. It can be achieved when the ruling fraternity would reduce state control over the economy (oil business in particular) and create an ambience for business and entrepreneurship within their country. Diversifications of economic activities do have the ability to bring substantial changes in the social and economic structure of a society, as has been proven many a times in history. The leadership of the region should realize that there is no alternative for their survival but cutting their dependence on oil. It might have fed them for years but now in an age of climate concern and ‘Globotics’ upheaval, time has been calling for long overdue change.

The author is a Research Intern, Observer Research Foundation, Delhi
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