Socioeconomic insights

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Services Provided

1. Academic Consultancy

This website provides a gateway for academic consultancy services focusing on the oil-rich economies of the Middle East.

Key services include:

Design & delivery of credit-bearing university UG & PG courses;

Academic editing and proof reading services;

Guidance on the following software applications:

2. Research & Analysis

In terms of the economic research and analysis provided, we focus on applied research and in particular, the economic reform policies that are designed to develop further and diversify these economies. Projects typically undertaken include those concentrating on the region’s oil-dependency, diversification strategies and enquiry into labour market dynamics. Work has been undertaken for the following entities and organisations:


i This is the website of Dr Emilie J. Rutledge. An academic with over a decade’s worth of experience in designing, managing and delivering economics courses at both undergraduate and post-graduate levels (see: Courses). In addition to providing consultancy services Emilie is currently lecturing at The Open University. She has published over a dozen peer-reviewed papers (see: Publications) and is the author of “Monetary Union in the Gulf”. Her current research interests include the Arabian Gulf’s economic diversification and labour market reform agendas. Emilie also provides academic consultancy services — specialising in the developing of interactive university-level courses — alongside analytical and research expertise focusing on the economies of the oil-rich Arabian Gulf.
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The Arabian Gulf

Since the late 1990s, the Gulf Co-operation Council (GCC), which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (often referred to as the Arabian Gulf), has undergone rapid demographic, economic and social changes. Since 1998, the region’s real GDP has expanded by an annual average of over 5 per cent. Over the same period, the population has risen from just over 28 million to an estimated 41 million in 2020.

Four of the six countries—Kuwait, Qatar, Saudi Arabia and the UAE—have significant revenues from oil and gas and, have some of the world’s highest per capita incomes (especially so if delineated along national/non-national lines). With the exception of Saudi Arabia, all have very small national populations and, as a consequence rely heavily on a large number of expatriate “guest” workers. In Qatar and the UAE, nationals only make up a small fraction of their respective workforces.

The unprecedented economic boom for much of the first decade of this century (then brief bust, followed by ripples of the “Arab Spring” and now, a return to strong growth) has focused world attention on the region’s economies—no longer are the viewed solely as exporters of oil and gas, but increasingly as a destination for investment, with major infrastructural projects underway, a booming tourism sector and, a number of financial hubs.

Profile of the Arabian Gulf (GCC)


Bahrain
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Growth continues to moderate as aggregate demand remains weak and fiscal deficits accumulate. The current account stayed in deficit and international reserves continue to decline, putting further pressure on the exchange rate peg. Despite austerity measures, Bahrain remains the most vulnerable GCC country in the face of low oil and bauxite prices due to its limited savings and high debt levels, leaving it exposed to financing risks.

Bahrain’s economy continued to be negatively affected by the lower hydrocarbon prices. Bahrain maintained an expansionary fiscal stance since 2009 resulting in general government deficits. However, the situation worsened in 2016 with a decline in oil revenues by 10 percent and an overall fiscal deficit estimated at 13 percent of GDP (up from 12.8 percent in 2015). The deficit spending helped maintain economic growth at 3 percent, but brought reserves down to a concerning low level at 1.2 months of imports and increased public debt to 65 percent of GDP.

Read more about Bahrain.


Kuwait
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OPEC related oil production cuts have weighed down growth. However, output should gradually recover supported by still buoyant non-oil activity and infrastructure spending, and as oil output is ramped up. Pressure on fiscal and current account balances is easing. Key challenges include hydrocarbon dependence and parliamentary opposition to deep structural reforms.
OPEC-related oil production cuts have weighed on growth, with GDP anticipated to decline by one per cent in 2017, following a 3.6 percent increase in 2016. Hydrocarbons account for nearly half of GDP, and the OPEC’s June decision to extend production cuts until the first quarter of 2018 has weighed on oil output and exports. Outside the oil sector, activity has remained supported by the implementation of the five-year Development Plan (2015/16-2019/20) which contains several large infrastructure, transport and refinery projects. In January, the government released the New Kuwait 2035 Strategic Plan, which aims to transform the country into a regional, financial and commercial hub as part of long-term economic diversification efforts.

Incoming data suggest that non-oil activity is continuing to expand. Consumer confidence rose in July to its highest level in almost two years, although it remains well below 2014 levels prior to the fall in global oil prices. Consumer spending, as reflected in point-of-sale transactions, strengthened in Q2, rising 9 percent y/y. The correction in property markets over the past two years appears to have run its course: real estate prices have stabilized in recent months, and residential sector sales rose by a robust 43 percent y/y in July. While the banking sector remains well capitalised and generally healthy, bank lending to both firms and households has slowed over the past year. However, growth in lending to “productive” business sectors (this excludes real estate and securities lending) remained resilient at 8.4 percent y/y in July.

Read more about Kuwait.


Oman

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Compounded by participating in OPEC oil production cuts in 2017, protracted low oil prices and fiscal austerity continue to weigh on Oman’s economy. Fiscal and current account deficits remain large, and with Oman increasingly resorting to external borrowing to finance its deficits, public debt is rising rapidly. However, growth is expected to pick up over the medium term following a boost in oil and gas, and from expected gains in the non-oil sector resulting from the government’s economic diversification plan.

Growth in Oman continues to be held back this year by lower oil production and weaker consumption and investment. Real GDP growth is projected to slow down to 0.1 percent in 2017 from 2.8 percent in 2016. Record high oil production levels (1 million bd) drove overall growth in both 2015 and 2016. In 2017, Oman joined most OPEC non-members in participating in oil production cuts, leading to a contraction of the hydrocarbon sector by 2.8 percent. Non-hydrocarbon GDP growth is estimated to continue to slow down to 2.5 percent in 2017 from 3.4 percent in 2016 as public spending declines with knock-on effects on consumption and investment. According to the national consumer confidence survey, the confidence index slowed to 78.8 percent in 2016 from 95.3 percent in 2015. The current account deficit is estimated to slightly improve to 15.7 percent in 2017 from 17.4 percent of GDP in 2016 on the back of higher oil prices.

Read more about Oman.


Qatar
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Growth prospects have weakened due to the diplomatic rift with GCC neighbours. However large financial buffers are anchoring confidence in the economy, and good infrastructure has provided space to blunt the impact of sanctions. In the medium term, growth will be supported by rising gas output and continued spending on the 2022 FIFA World Cup. Reforms protecting foreign household workers and introducing permanent residency rights for expats will help with longer-term diversification efforts.

Growth in 2017 is anticipated to slow to 2 per cent from 2.2 per cent in 2016, on weaker activity and sentiment in the non-hydrocarbon sector, reflecting the severing of diplomatic and trade ties by several Arab countries, including the Kingdom of Saudi Arabia, Bahrain, UAE and Egypt. These countries constitute a small share of destination markets for Qatar’s exports and a relatively small proportion of financial and FDI flows. Nevertheless, the boycott and the disruption of economic ties led initially to a sharp drop in imports, requiring a (costly) diversion of merchandise and services trade and financial flows through other neighbouring countries. It has also dampened investor sentiment, reflected in the stock market being down 11 per cent at the end of August relative to early June levels. In August, Fitch became the third major credit rating agency to downgrade the country’s debt one notch to AA- (on par with Belgium and South Korea) due to the uncertain economic outlook.

Read more about Qatar.


Saudi Arabia
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The mediocre oil price outlook invigorated the Vision 2030 reform agenda. In 2017, the authorities showed commitment to last year’s OPEC deal by restricting oil production and introduced major reform initiatives. With unfolding fiscal consolidation efforts, improvements in medium fiscal outlook were achieved at the expense of growth, which closely relies on public spending.

The Saudi Arabian economy grew at a more moderate rate of 1.7 percent in 2016 as oil prices continued to remain below USD$50 for almost the entire year. The data for the first half of 2017 suggests that GDP in the first quarter deteriorated, registering a 0.5 percent contraction on a year-over-year basis. The crude oil production index declined by 4.4 percent due to the OPEC agreement on curbing production. However, non-oil GDP grew by around 0.7 percent in the same period. Though official GDP data for the second quarter of 2017 has not been released, other indicators suggest continued subdued economic activity.

Read more about Saudi Arabia.


The United Arab Emirates

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Non-oil growth is estimated to remain resilient in 2017 while OPEC-mandated oil production cuts limit oil growth. However, in the medium term firmer oil prices, a rebound in global trade and easing of fiscal consolidation are expected to strengthen economic activity, especially as investments ramp up ahead of Dubai’s Expo 2020. This rebound is faced with several downside risks including lower oil prices and tighter global financial conditions.

Overall real GDP growth is estimated to further moderate to 1.4 percent in 2017, down from 3 percent in 2016. Hydrocarbon GDP growth is estimated to contract by 2.9 percent in 2017 from 3.8 percent in 2016 in compliance with the OPEC agreement to cut supply. The non-oil sector is estimated to grow by 3.3 percent in 2017 reflecting higher public investment and a pickup in global trade. The average rate of inflation increased slightly to 2.2 percent in 2017 from 1.6 percent in 2016 partly reflecting utility and gasoline price adjustments, and higher imported inflation, in addition to an uptick in activity. The current account surplus is expected to improve to 2.6 percent of GDP this year mainly owing to rising non-oil exports.

Read more about the United Arab Emirates.


Note: Country profile information is compiled, unless otherwise stated, from the following sources: