Riyadh-Transforming the Gulf Cooperation Council into a single, unified market could boost the economy by $36bn by 2030, according to a new report by global consultancy, Ernst and Young (EY).
“If it is able to keep growing at an annual average of 3.2 per cent for the next 15 years, it could become the sixth largest economy in the world by 2030, hovering just below Japan,” EY said in its report titled ‘Strength in unity: Making the GCC the sixth largest economy in the world’.
The United Arab Emirates, Saudi Arabia, Bahrain and Oman were cited as having the most to gain from such a union with increases in GDP between 3.5 percent and 4.1 per cent in the four countries, the report claimed.
Commenting on the report, the financial and economic expert Dr Khalid Al-Yahya, told Asharq Al-Awsat that GCC states will work on expanding their investment ring in the region, raise their intra trade volume and prepare their markets for the whole world.
Dr Khalid stated that if the GCC states implemented the unified Gulf market, then the volume of region’s economy might increase by three percent annually.
Moreover, EY Middle East and North Africa (MENA) Advisory Leader Gerard Gallagher said: “We realized a couple of years ago that there needs to be a more robust debate about how to create growth in the GCC.”
“We believe that by further creating unity in the GCC there is a substantial opportunity for growth among all six GCC countries. If the GCC were to undertake these recommendations, the prize would be substantial.”
EY MENA transactions leader Phil Gandier said: “There are immediate steps that the GCC could take that would optimize the existing levels of cooperation, bringing significant economic gains to each of the member countries, while allowing them to focus separately on creating the incentives that will make them
most attractive as investment locations. Pinpointing and resolving these barriers might not sound like integration, but it would be a major step forward to leveraging the GCC’s common strengths to the benefits of each country.”
“The first step to integration is by removing non-tariff barriers; we’re not talking about a fiscal union or one currency. A lot of investors look at it as six different countries rather than one huge country.”
“The GCC must continue to push towards developing a single market with consistent regulations to attract foreign investment,” he added.
“There are many investors who want to invest in the region as a whole, but there’s no one model to invest in because in one country they can only own 35 percent of the business, in another it can be 100 percent.”
He added: “The GCC must also develop more autonomous institutions that are competitive and are reducing the existing models today.”
Gandier however ruled out the need for more political integration between the six members.