Regional Integration, the Private Sector and Diversification in the GCC Countries

Abstract

This chapter aims to examine the role of economic integration arrangements such as the customs union and common markets on economic diversification in the GCC countries. This study seeks to evaluate the efforts made by GCC governments to enhance their regional integration and economic diversification strategies and the levels of support given to the private sector and SMEs in particular, which form the basis of their national visions and economic diversification strategies. This chapter argues that economic integration has played an essential role in facilitating economic diversification in the GCC, while providing incentives and motivations to SMEs to internationalise their activities in the GCC regional market. While most of private sector activities are in trading, retails and services, the chapter stresses the importance of diversifying the manufacturing sector, if they are to compete internationally.