A research report suggests that the Gulf Cooperation Council (GCC) region could emerge as a global economic powerhouse if it embraces a green growth strategy.
The combined GDP of the six GCC countries, which has already reached $2 trillion, could potentially double to $13 trillion by 2050, up from a projected $6 trillion, with investments in green and sustainable projects.
Investment in Sustainable Initiatives:
The report, titled the Gulf Investment Report 2023 and published by Century International Holdings, emphasizes the transformative potential of investments in green and sustainable projects.
The UAE is highlighted as a leading example, having invested over $40 billion in clean energy over the past 15 years, with programs to invest an additional $163.5 billion in clean and renewable energy sources over the next 3 decades to achieve net-zero emissions.
Foreign Direct Investment (FDI) Trends:
Total FDI flow into the GCC region declined by 17.91% to $37.12 billion in 2022, down from $45.22 billion in 2021, despite the UAE recording a 10% increase in FDI from $20.66 billion in 2021 to $22.73 billion in 2022.
The GCC’s inward FDI stock rose to $529.78 billion at the end of 2022, amid a 12% decline in global FDI flow to $1.3 trillion in 2022.
The UAE attracts investment, accounting for 61.24% of the total FDI inflow in the GCC in 2022, with a strong focus on greenfield investment projects.
It ranks fourth globally in greenfield investment projects, with 997 projects in 2023, according to the World Investment Report 2023.
Potential for Foreign Investment:
A report by Strategy& suggests that GCC countries could realize up to $300 billion in foreign direct investment by becoming centers for Global Value Chains (GVC) in resilient and sustainable industries.
Positive Economic Outlook in the GCC:
The World Bank highlights the GCC’s impressive economic growth, with an average growth rate exceeding 7.0% in 2022, driven by Saudi Arabia, the fastest-growing large economy globally.
With a green growth strategy, the region’s GDP is on track to reach over $13 trillion by 2050.
Forex.com analysts note a positive economic outlook for the GCC, particularly in the non-oil sector, with thriving industries such as hospitality, retail, travel and tourism, real estate, financial services, technology, and healthcare.
The UAE and Saudi Arabia are expected to experience robust growth, with a non-oil sector expansion of 4.8% each in the second half of 2023.
Leaders’ Perspective:
The Secretary-General of the GCC, Jassem Mohamed Albudaiwi, acknowledged the GCC’s substantial GDP growth and successful economic resilience, even amid challenges.
He highlighted the region’s growth, which reached 7.3% in 2022. Albudaiwi’s comments were made during a meeting with the President of the World Bank Group, Ajay Banga.
