During a seminar on the Economies of GCC States in the Post-Oil Era 

The Gulf Organization for Industrial Consulting (GOIC) took part in a seminar on “The Economies of GCC States in the Post-Oil Era: Horizons and Solutions” organised by the Federation of GCC Chambers (FGCCC) at the Grand Millennium Hotel in Muscat, Oman. 

Dr. Laila Diab Shrair, Strategic Planning Consultant at GOIC, delivered a working paper on the “GCC industrial map, knowledge-based economies, and their central role in stimulating development”. Dr. Shrair talked about the “big expansion of the GCC industrial base in terms of factories and investments over the last five years.” “The figures present an indicator of the importance of the manufacturing industry that will largely contribute to economic diversification in the region”, said Dr. Shrair.

According to GOIC’s paper, approximately 17000 factories operate in the GCC today, a CAGR growth of about 5% over the last five years. As to the size of the labour force, it reached about 1.6 million workers, a CAGR of approximately 6.5% in five years, while the cumulative investments were valued at 394 billion USD, with around 5% increase in the last of years. Furthermore, the paper revealed that SMEs form more than 90% of the total industries in the region. Moreover, the manufacturing and knowledge-based industries’ share of the GCC GDP is currently between 9 and 14%. It is expected to reach 25% in some states by 2025. Dr. Shrair explained that according to the industrial map, Saudi Arabia and the UAE are leading in terms of investments in manufacturing and relevant industries. 

In addition to that, GOIC’s paper showed that the GCC industrial map highlighted a number of missing industries, notably: producing and preserving poultry meat, producing and preserving fish, oils, dairy concentrates, raw sugar and ready-made dishes. In the manufacture of basic metals, the manufacture of cold-rolled bars and rods of steel was missing. As to the manufacture of non-metallic mineral products, the industrial map highlighted the absence of the manufacture of copper products and copper alloys, zinc products and zinc alloys, magnesium products and magnesium alloys, the manufacture of powders, the manufacture of copper ores (copper smelting) and metal forming products. As for the missing industries in the sector of aluminium, they are: non-ferrous aluminium and extrusion products, cold-rolled sheets, aluminum foil, aluminum tubes and aluminum castings. Among the missing industries in the GCC we also list: the manufacture of polymers and synthetic rubber, especially engineering plastic, polybutylene terephthalate (PBT), and polyoxyethylene. In the chemicals industry, GOIC recorded the absence of catalysts, the production of acrylates, the production of aluminum chemicals, the production of water treatment chemicals, activated carbon and building chemicals.

Dr. Shrair stated that since the launch of the industrial map in 2012, GOIC has deployed relentless efforts to implement its recommendations. The Organization uses the results of the industrial map regarding missing industries to introduce several industrial investment opportunities in the GCC in collaboration with the FGCCC and chambers of commerce and industry in member states, such as the chambers of Abu Dhabi, Al-Sharqiya, Jeddah, Oman, Riyadh and Qatar. In addition, GOIC introduced these opportunities in investment conferences like “Invest in Bahrain” and “Invest in Qatar”. 

As to the key industrial investment opportunities introduced by GOIC, we mention: aluminum alloy tubes, flexible steel tubes, aluminum chloride, steel gelatin capsules, high density polyethylene capsules, polystyrene, solar panels, soybean protein concentrates, iron-coated steel pipes, sulfur concrete, margarine, steel ingots, gelatin powder, food energy, polybutadiene rubber, polycarbonate resins, polyethylene terephthalate, iron castings, steel ropes, thin aluminum foil, aluminum alloy - car parts, aluminum blocks, Polyoxy Oxide, aluminum powder mill, valve manufacturing and acrylic acid.

On prospects and visions to develop knowledge-based industry and economy, Dr. Shrair said “GCC states need a knowledge-based industries policy, especially that this sector has several implications on policies, as it is difficult to protect knowledge assets and knowledge generators have no incentives to continuously generate knowledge. Therefore, markets generally tend to invest in production or application of knowledge assets. However, general policies can stimulate knowledge production, including government investments in technical infrastructure and direct and indirect research and development through R&D subsidies and tax exemptions.” Dr. Shrair added: “Government policies can establish appropriate frameworks to protect intellectual property which encourages the production and sharing of knowledge between all stakeholders. Technical infrastructure and innovation are necessary, but they are not sufficient to prove the vitality of knowledge-based economy and industries, as they need suitable legal and commercial ecosystems where business can flourish and markets are open and competitive. General policies play a major role in determining these conditions.”

Dr. Shrair concluded by inviting Gulf governments and industrial investors to take into account knowledge-based economic and industrial strategies based on competitive advantages of GCC countries. In addition to that, governments need to increase their efforts to provide knowledge networks and public-private partnerships to promote initiatives in the area of knowledge-based economies and industries, giving priority to SMEs and highlighting the importance of specialization.”

The Gulf Organization for Industrial Consulting (GOIC) had prepared a GCC industrial map study as tasked by the Secretariat-General of the Gulf Cooperation Council and ministers of industry in GCC countries. The results of the industrial map were announced in 2012.