The GCC in 2020: Resources for the future

 The member countries of the Gulf Co-operation Council (GCC, consisting of Qatar, the UAE, Kuwait, Bahrain, Saudi Arabia and Oman) are expected to post robust growth over the next decade both in terms of population and GDP. By 2020 the GCC population is forecast to reach 53.5m, a 30% increase over the level in 2000. Over the same period, the region’s real GDP is expected to grow by 56%. Nominal GDP, which was US$341.6bn in 2000, is forecast to soar to over US$1trn in 2010 and US$2trn in 2020.Although the economic forecast is positive, it carries a risk: that unmanaged growth will bring negative side-effects such as power shortages and soaring prices, in particular for food. Some GCC states are already experiencing sporadic shortages of electricity and gas, while water supplies are already strained and food shortages loom as risks for an import-dependent region. A key challenge for the Gulf in the next decade therefore will be to manage energy, water and food resources to ensure both high living standards and sustainable growth in the long term. Aware of these challenges, Gulf Arab states are undertaking a variety of measures to ensure longterm sustainable growth. These include:

• l introducing energy-efficiency measures;
• l investing in clean fuel and renewable energy supplies;
• l improving water efficiency;
• l investing in new water desalination capacity; and
• l buying or leasing agricultural land abroad.

Although governments have recognised the challenges involved in boosting resource supply security in the long term, much remains to be done to ensure the success of policy initiatives. For example, public attitudes towards energy and water conservation—including curtailment of subsidies—remain resistant to change. New infrastructure to produce water and electricity require massive additional investment. Political controversies arising from investment in farmland abroad require continued management. Despite these challenges, however, the GCC states have a positive outlook for long-term security of key resources, as their young populations and significant capital resources create good conditions for implementing the necessary changes...Read the full report.