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Spreading the Good Fortune: An Analysis of Diversification and Complexity across Economic Sectors in Gulf Countries over 2000-2020.

Andres Castano Zuluaga

CMU-Q Point of Contact

Over the last 60 years, GCC countries have heavily depended on oil and natural gas as their primary source of exports and fiscal revenues. However, recent economic downturns caused by the 2017 economic blockade, the coronavirus pandemic, and the cyclical and limited nature of oil and gas production have reinvigorated the discussion on the need for economic diversification. To what degree GCC countries are progressing towards economic diversification and what are the main sectors driving it is an open question. Using Input-Output tables from Eora and economic indicators from multiple international organizations, I study the effectiveness of the diversification efforts through the lenses of trade diversification (exporting more or better products) and domestic production diversification (increasing the share of non-oil and non-gas sectors in the GDP). Furthermore, using an Input-Output linkages analysis and Structural Path Analysis, I explore the evolution of the linkages across GCC countries’ productive sectors to understand whether there are sectors leading the diversification efforts and the production bottlenecks that could be slowing down such efforts. Results from the project can provide insights into the efficacy of diversification policies along the trade and domestic production structure dimensions and highlight the economic sectors in specific Gulf countries leading the diversification efforts, which can be helpful to guide future policy efforts in the region.

Project

SEED-59701

Year

2024

Status

Open

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