Massive investments in the non-hydrocarbon sector by Dubai and ongoing reforms in Abu Dhabi have turned the UAE into the most diversified economy in the oil-rich Gulf, an official Arab report said on Sunday.
The report by the Saudi-based Arab Petroleum Investment Corp (Apicorp) based its findings on three main categories—the oil sector’s contribution to gross domestic product (GDP), its share of total exports and share of government fiscal revenue.
The report found that the UAE is the most diversified economy in the six-nation Gulf Cooperation Council (GCC) while Saudi Arabia’s economy is the least diversified.
Measuring reliance of the economy on the oil sector by those categories, the study found that the UAE has the lowest ratio of 0.52 points.
Bahrain emerged with the second diversified economy, with 0.54 points followed by Oman with 0.69 point, Qatar with 0.73 points, Kuwait with 0.76 points and Saudi Arabia with 0.77 points, according to Apicorp, an affiliate of the Kuwaiti-based Organization of Arab Petroleum Exporting Countries (OAPEC).
“Saudi Arabia appears to be the least diversified economy within the region….as in the relationship between mass and inertia, it seems that the more an economy relies on oil, the more difficult progress becomes,” it said.
“However, the UAE provides an exception to this rule, since it emerges as the relatively most diversified country. Part of the reason stems from the ever-enterprising Dubai and from Abu Dhabi’s relatively steady structural transformation.”
[Image via Shutterstock]