Short-term bliss? GCC economies 'resilient' despite dip in oil prices

Published September 19th, 2014 - 02:06 GMT

Brent November crude slipped 8 cents to settle at $98.97 a barrel, recovering from an intraday low of $98.51 on Wednesday in London.Brent November crude slipped 8 cents to settle at $98.97 a barrel, recovering from an intraday low of $98.51 on Wednesday in London.
Brent November crude slipped 8 cents to settle at $98.97 a barrel, recovering from an intraday low of $98.51 on Wednesday in London.Brent November crude slipped 8 cents to settle at $98.97 a barrel, recovering from an intraday low of $98.51 on Wednesday in London.

Prince Abdulaziz Bin Salman Bin Abdulaziz, Assistant Minister of Petroleum and Mineral Resources for Petroleum Affairs, dismissed arguments that lower oil prices will cause the collapse of GCC economies.

In a speech delivered Wednesday at “The Conference of the Arabian Gulf and Regional Challenges” organized by the Institute of Diplomatic Studies in cooperation with the Gulf Research Centre, Prince Abdulaziz Bin Salman said such thoughts “are misguided to say the least, and ignore the increased resilience of GCC economies.”

Brent November crude slipped 8 cents to settle at $98.97 a barrel, recovering from an intraday low of $98.51 on Wednesday in London. US October crude fell 46 cents to settle at $94.42, falling intraday to $93.74.

Stressing his point, Prince Abdulaziz Bin Salman said GCC is also an important consumer market. In 2013, GCC imports of goods and services amounted to $711 billion, almost triple from the 2000-2008 average of $240.8 billion. In terms of food alone, aggregate spending on food imports is to double from its current level, reaching $53.1 billion by 2020. 

Moreover, he said GCC's greater integration into the global economic system through trade, investment, and financial links, has allowed the region to play a key role in the rebalancing of the global economy. “Higher export earnings mean more spending on foreign goods and services, more investment in foreign assets, and more investment in our domestic economies, which will provide massive opportunities for foreign investors and international partners,” the Prince underscored.

As a further manifestation of the GCC economies’ strength, he said at times when Western governments are imposing austerity measures and reconfiguring their foreign policies, leaving a huge vacuum in the region in the process, the GCC has intensified its political initiatives and increased its economic assistance and financial support for their ailing strategic partners in the region.

For that matter, the GCC will not lose its international and regional prominence and will continue to play a key role in the global political, economic and energy scenes.

As global economic activity and energy flows continue to be redirected away from traditional centers of consumption in the OECD toward emerging economies, he pointed out that “GCC countries are in a very strong position to benefit from these shifts in economic growth and wealth. Many efforts and initiatives – be it in diversifying the economy through horizontal and vertical integration, improving energy efficiency, diversifying the use of energy, improving business and investment environment – open the economy for foreign investment, and are being implemented to consolidate GCC’s position in the global economy and make the region more prosperous.”

He added a more prosperous GCC contributes positively to the world economy and provides many economic opportunities for partners, saying that “a stable and secure GCC is a prerequisite for the stability of energy markets, the global economy, and for the security of our international and regional allies.” 


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