Chapter :7

5: Agriculture, Industrialization, Trade and Tourism

There are similarities of Natural Characteristics of the

ArabianGulf and weather conditions , the climate in the
Gulfstates is hot desert, high temperature in summer and low in
winter, high humidity in summer and little rain, it is very light in
the Arabian Gulf area.
1- Agriculture:
Plant can be divided into two main kinds;

= Yearly plants growing after rainfall (shrubs, claptraps,

procure)
=Perennial aridity, resistant plants (tamarisk, date trees)

The date palm, capable of survival even in the midst of the

most inhospitable dunes, rivals the camel in its adaptation co life
in one of the severest climates in the world.
The date palm can tolerate very high salinity and thrives in
intense hear.
As a cultivated fruit tree, the date palm is propagated from side
shoots which grow out from the base of a mature trunk.

Today is also used to grow plants. The young saplings need to

be watered regularly. In the desert, water is carried from the well
by leather bagful.
The inhabitants of the Arabian Peninsula consider themselves
to have been doubly blessed with both the cameland the date
palm.
Prosperity reduced dependence on dates, but in recent year’s
modern technology (Sprinkler Irrigation System) and (Drip
Irrigation System)intensive planting(There are now over 59
million date palm in the UAE) have transformed the
subsistence nature of date palm cultivation into a major
agricultural industry serving export and domestic markets.

To study theevolutionoftheproductionin the agricultural

sectoroftheUnitedArabEmirates(GDP)for the
periodof1992-2006seengrowing, fromabout$35billionin
1992 toabout$164billionin
2006,anannualaverageduringthis periodatarateofabout$
70 billion.

By studying landareaplantedwithfruitit has

increasedfrom29thousandhectaresin 1994to
about222thousand hectaresin2006.
The fruitincreased theproductionof272
thousandtonsin1994 to782thousand tons in2006.

Asgrain productionduringtheperiodof1992-
2006increasedfrom232thousand tonsto2566tonsandis
expected to reach3248thousand tons in2009.
2- Industrialization
The cumulative industrial capital of the country at the beginning
Of2008 was around Dh72 billion, with Dh38.9 billion of that
Total accounted for by Abu Dhabi Dh17.1 billion by Dubai;
Dh6.4 billion by Fujairah; Dh4.03 billion by Sharjah;
Dh4.2billion by Ra’s al-Khaimah; Dh1.49 billion by Ajman;
andDh483 million by Umm al-Qaiwain.

By early 2008 almost 44 per cent (i.e. around Dh32.1 billion) of

thetotal manufacturing capital of the UAE was in food,
beverages andtobacco.

Other sectors in order of size were chemicals, mineralproducts,

metal products, equipment, paper products, textiles and
garments, and wood products.

Abu Dhabi’s industrial base is dominatedby a few large-scale

projects, in contrast to some other emirates wherethere aremany
smaller enterprises.

Mineral products emerged as thelargest job provider,

employing nearly 54,000 people; followed bychemical projects
with nearly 36,800 employees, textile and garmentswith 31,700
and food and beverage with 29,130.

Thisindustry lays the pillar for heavy industries as well as the

base for manufacturing.
In addition, this industry creates a sort of front and back
intersectional relationship between the different industrial and
economic sectors.
Being so, this iron and steel industry has become today an
important model for identifying the progress and development
levels of societies to the extent that the average of individual
consumption of iron and steel is considered amongst the
important indicators of measuring the degree of countries'
development.

GCC member states exerted great efforts to develop iron and

steel industry since the setup of the first factory to produce iron
bars in Jeddah, KSAin 1966.

This industry witnessed many developments especially during

the last few years.

The number of working factories in GCC member states

reached 45 producing basic iron and steel products covering iron
bars, flats, special shapes, angles and casting.

Half of those factories are located in KSA, while others are

distributed on other GCC member states.

The investment value of those factories reaches some USD 2.8

million, and over 11.6 workmen.

The growth of manufactured metal products also leaped.

This industry depends, one way or another, on iron and steel
basic or intermediate products in manufacturing.

It includes a number of industrial activities; most important are: metal

furniture, construction, spare parts, heating and cooling machines, cars
frames and supplies, etc.
The number of products manufactured from steel and iron in
GCC member states reached some 125 in2005.
Their investment cost was over USD 6.5 billion, and 136,000
workmen.

Dubai Aluminum Company Limited (Dubal), the world’s

seventhlargest producer of high quality primary aluminum,
achieved a majorproduction milestone, having produced its ten
millionth cumulativetone of hot metal in mid-July 2008.

The company, which celebratesits thirtieth anniversary in 2009,

began operating with three potlines offering an initial production
capacity of 135,000 metric tons per year at its inception in 1979.

Dubal produced approximately890,000 tons of molten

aluminum in 2007, representing a 12.6per cent increase on the
2006 figures.
The company is planning toproduce 970,000 tons in 2009.

Dubal’s ambitious vision is tobecome the world’s fifth largest

producer of primary aluminum by2015, by producing 2.5
million tons of the metal per year.

GCC member states currently witness a rapid movement to

develop iron and steel industry.

There are many expansion projects currently taking place.

Furthermore, governments adopted ambitious plans to setup

new ventures to meet the rapid growth in the constructions
sector, the establishment of huge infrastructure projects, as well
as large residential, commercial and tourism complexes.
It is expected that the GCC member states become one of the
important world centers for producing iron and steel in the
region within the few coming years, despite the limited
contribution of this industry in the global production as it only
constitutes about 1%.

Despite this fact, the GCC member states are considered among
the most consuming groups of iron and steel products at the
individual level reaching over 378 kg of steel per person
annually, while the individual consumption per person at the
world level is 182 kg.

In addition, it is expected that the local market continues the

revival state as well as the increase in iron and steel products'
demand as a result of the huge constructional projects; as such
this requires the GCC member states to exert more efforts to
reinforce its position in this important industry, whether at local
market level or to compete at external markets.

Doing so will create a motivation to direct the private sector as

well as the financing banks and funds towardsmore local and
foreign investment in this industry; as the cost of the planned
projects in iron and steel industry is estimated to over US D 5
million in the coming three years.

The mentioned tendencies are promoted by two major factors:

first, the increase in demand on basic iron and steel products
which are expected to increase from 15 million tons in 2005 to
around 19.7 million tons in 2008; and
Secondcomes the escalation of investment in this strategic
industry with its diversified usages.
3- Trade
The UAE was the second largest trading nation in the Arab
world in2007.
Trade for the year totaled Dh1.01 trillion (US$275.1 billion)
in2007, accounting for 22.2 per cent of the total Arab
commercialExchange of US$1.234 trillion, despite the fact that
its populationaccounts for just 1.4 per cent of the total Arab
population.

Economists attributed the surge in trade to an increase in crude

oil and gasexports, higher non-oil exports by free zones and
other areas, and asharp rise in imports as a result of strong
domestic demand and asteady increase in re-export.

The GCC economies are small open economies that have relied
on the rest of the world to sell their major source of income, Oil,
and buy in return almost all their needs of consumer
goods,capital goods, and labor services.

Thus trade liberalization has a number of advantages that can, in

the proper economic policy setting, lead to a sustainable
economic development of the region.

One advantage includes providing the GCC countries with a

market outlet for oil and oil related industries in which they have
a comparative advantage and of exposing domestic industries to
competition.
The latter, in turn improves their productivity and efficiency,
and provides them with access to improve and modern capital
goods thus improving both the efficiency of their process and
the quality of their products (World bank,1999/2000: 52).

There is no doubt that the openness of these economies has

provided them with a market outlet for their crude oil and hence
the foreign exchange needed to import all their needs from the
rest of the world.

As such, trade was crucial in the countries’ economic growth

that began with the quadrupling of oil prices in the early 1970s.
The share of the oil sector in the GCCregion is about one-
third of GDP and three-fourths of annual government
revenue and export receipts (Fasano and Iqbal, 2002).

Yet, the GCC’s economic growth is still not self-sustaining for

two important and related reasons.

First, one characterizes their growth by high terms of trade

volatility due to the international fluctuations in oil prices.
Over the last thirty years, the volatility of real GDP growth in
the GCC and other oil producing countries has been twice the
average of that in the non-oil producing MENA countries.
 These countries’ share of the international oil market fell by
more than 50%over the last two decades.
(Abed and Davoodi, 2003: 3).

Second, the GCC countries failed to achieve any diversification

in their exports toward manufactured goods, as did other
developing countries.

For example, as a group, East Asian countries increased their

share in world exports from 8%in 1965 to 13% in 1980 and to
18%in 1990.
The major source of this growth was manufactured exports.
So, what explains this disparity in the impact of trade on the
development of the two regions?

Whydid trade result in the diversification of the economic

structures in the East Asian economies, leading to a more stable
and sustainable economic growth while the same did not take
place in the oil-rich GCC economies?

Isit the unique cultural and geographical circumstances of the

East Asian Economies?

Is it because the GCC countries do not earn their wealth through

productive work (Zakaria, 2003:73-76)?

In the view of many observers, the success of the East Asian

economies is attributed to a combination of open trade and
government expenditures geared toward human and physical
infrastructure and heavy imports of capital and
technology(World Bank, 1995: 52).

A number of theoretical and empirical studies on the

relationship between trade policies and economic growth
confirm this view, which points to two main conclusions.

Firstis that no country has ever developed by simply adopting

free trade regimes.

Instead, success stories such as East Asia have been a result of

opportunities offered by world trade and domestic investment
and institution building strategy (Rodriguez et al, 2001).
The other conclusion(Second)is that a more liberal trade
improves resource allocation by relocating factors of production
from less productive to uses that are more productive.

In the short run, however, a more liberal trade could have

some adverse consequences on the economy, which include the
rise in the number of unemployed, the exacerbation of poverty,
and the fall in government revenues (winters, 2000: 43-49).

The implication is that a more liberal trade should be done in a

gradual manner to minimize these costs and safety nets should
accompany to mitigate its adverse effects.

Indeed this is the approach that the East Asian countries

adopted (Stieglitz, 2002: 60).

4- Tourism:
Tourism industry in the UAE is not only one of the fastest
growing sectors in the economy, it is also one of the greatest
success stories in the region.

Dubai has spearheaded tourism development, leading to the

phenomenal rise of the country as a major tourist destination.

Remarkably, the UAE tourism industry managed to register a

positive growth in 2001 onwards.
A report by BMI in September 2008 stated that the growth rate
inVisitors to the UAE in 2007 were a relatively strong 7.5 per
cent year-onyear,equating to some 8.5 million arrivals.
Europe accounted for the largest group of tourists visiting
Dubai in 2007 (32 per cent of the total), followed by Asia(23
per cent).
The study predicted a possible steadying of demand from the
United States and key European economies that together
accounted for 40 per cent of total arrivals to the UAE in
20076.95 million Guests stayed in Dubai hotels, an increase of
8 per cent year-on-year.
Guest nights were up a buoyant16.7 per cent to 20.5 million
nights.
Dubai hotels also recorded an impressive average occupancy
rate (beds) of 81.4 per cent in 2007.
At the end of 2007, Dubai had 319 operating hotels, up nearly 6
per cent year-on-year, while the number of hotel rooms
increased by a similar rate, bringing the total room capacity to
around 32,600.
The primary source of the UAE’s rapidly growing tourism
sector is the Dubai Emirate, which hosts the world’s
tallest hotel.
It has seen dramatic growth in hotel revenue (a 42
percent increase from 2003 to 2004) and reports hotel
occupancy rates over 80 percent.
The emirate hosted 5.5 million visitors from India,
Pakistan, Iran, Lebanon, the Philippines,
Europe,Australia, and South Africa in 2004, two-thirds
of whom were traveling for business purposes.
The main attractions for tourists are beaches, nightlife,
shopping, and luxurious accommodations.
Dubai has grandiose plans for the future, the building of
four man-made island structures off the coast (valued
atUS$3 billion each) that will house more than 100 new
hotels, as well as residential villas and apartments.
 Chapter: 8
Environmental Issues in the Gulf Countries

GCCstates face many environmental challenges.

Some are traditional, linked to water

scarcity,landdegradation and desertification, and
pollution related to oil and gas industry.

There are emerging challenges such as

increaseddemand for energy, conservation and
diversification, climate change, construction and debris.

Despite the progress thatGCC states have made towards

meeting Millennium Development Goals(MDGs), more
effort is needed.

In fact, the 1992Rio De Janiro Conference accelerated

the setting up and strengthening of environment
ministries and authorities in GCC states, the adoption of
national action plans and strategies, mobilization of
financial resources and developing environmental
policies.

There has been great progress in formulating and

executing Environmental Policies in the GCC.

However, Environmental Governance in general still

lacks many dimensions.
In addition, there is always a connection between
environmental policy and governance.

Environmental Policy is the main component of

Environmental Governance.

Simply put, Environmental Governance means;

"A collective design and execution of environmental

policies and actions towards achieving environmental
goals with proper allocation of power of authorities".

To achieve good Environmental Governance, there

is a need for community participation in drafting policies.

Besides, proper allocation of authority needs to be

enhanced and environmental institutions must be
empowered.

Strengthening the role of various stakeholders;

(NGOs, the private sector, local communities etc.)
Would improve execution, monitoring, reporting and
contribute towards achieving the collective goals as well
as increasing the cooperation at national and regional
levels.

This would also lead to better implementation of

environmental policies.
Reducing impact of climate change

Water policies in the region must focus on supply

development, aiming to overcome shortages through
technical solutions including desalination and allocation of
financial resources for some countries making good
progress towards meeting the MDG water supply and
sanitation targets, especially in urban areas.

National action plans to combat land degradation and

desertification should be integrated with sustainable use
of natural resources, synergized with biodiversity
conservation and plans to reduce the impact of climate
change.

Despite rich renewable resources in GCC states, the

energy sector is still characterized by a heavy reliance on
fossil fuels leading to an adverse impact on the
environment and high carbon intensity.

Policy development to promote energy efficiency,

renewable energy and mitigate climate change is
evolving.

It is worth mentioning here the pioneering initiative of

AbuDhabi, which came up with Masdar City, the first
carbon-free city in the world.

Add to that the implementation of green building codes in

the UAE, Qatar and Kuwait.
The GCC states are witnessing strong coastal
development plans.

These countries should confirm their commitment to

protect the coastal and marine ecosystem through
regional cooperation, and application of integrated
coastal zone management.

In this regards,Qatar completed a detailed coastal

inventory using fine scale, airborne image analysis.

And the excellent project of inventory and mapping of

coral reefs of Abu Dhabi and eastern Qatar.

Environmental institutions have been accorded higher

priority and status in all GCCstates.

Accordingly different institutions have been established to

implement policies, enforce laws and set standards and
norms.

However, the public participation in the major groups in

Environmental Governanceremains weak.

There is no clear policy for integration of these groups

into the Environmental Governance process, either
at national or at regional levels.

Environmental Policies in the GCC rely mainly upon

Command And Control (CAC) mechanisms rather than
on economic instruments.

Recently, there have been various initiatives to include

economic instruments mechanism to alter incentives and
change behavior, such as the water cost recovery options
adopted in places such asDubaiand Abu Dhabi, and the
road toll system in Dubai.

In addition, GCC states depend on the persuasive

mechanism alongside the other two mechanisms.

It addresses the moral aspects of environmental

responsibility, including religious and social aspects.

This approach can take the form of education, risk

communication, provision of information and knowledge
as well as capacity-building.

There is a general lack of coherent Environmental

Information and information tools in the region.

There is a need to collect, process, analyze, produce

anddisseminate Environmental Information in a
systematic way.

Exchange of Environmental Information and

cooperation is lacking between institutions in one country
and between GCC states.

In this regard, the excellent initiative in the UAE, the

AbuDhabi Global Environmental Data Initiative is
praiseworthy.

Trends show the need to make use of additional

instruments to improve the enforcement and compliance
processes.

In addition, there is a significant need for regular

environmental reporting in all GCC states as well as
increasing the public and private participation in
monitoring.

The level of response and compliance for regional

environmental ministries is generally higher than for
global environmental ministries.

For example, national action plans have been developed

by all eight signatories (GCC states, Iraq and Iran) to the
Kuwait Regional Convention.

In short, the way to overcome all the above

environmental challenges is good Environmental
Governance.

In general, GCCstates have made considerable progress

in environmental governance.

However the trends show the need to make use of

additional policy tools, and engage the various
stakeholders in the governance process.
 Chapter: 9
Socio-Economic Development in the GCC
Countries

Comprehensive development Strategy

for the GCC States 2010-2025

Situations and challenges

The establishment of the Cooperation Council for the

Arab States of the GCC in May 1981 came as a
culmination of the serious efforts imbued with faith in its
objectives and conscientious of its need at all levels of
intellectual and political activity since the second half of
the 1970s.

Thus, the Council came as a realization of the great dream

of the peoples of the Arab states of the Gulf, embodied in
the collective efforts aimed at achieving economic, social
and political integration GCC.

The GCC unity entail all historical, cultural, human, and

material factors required to face the challenges
threatening its civilization process, to ward-off the various
threats emerging against its existence or against any of its
members at the local, regional and international levels.
By reviewing and assessing the Joint Action process
of the GCC states, it becomes clear that the process was
able to face the challenges encompassing establishment
of the Council.

Those challenges were embodied in a group of threats.

The Joint Action was able to position itself against
those challenges and threats by ensuring the
effectiveness of the cultural and social presence of its
people in the world arena throughout the period of its
existence.

While facing those challenges, all the member states have

exerted maximum efforts in order to achieve the objectives
laid down in the GCC Charter and the auxiliary
agreements and strategies, which originated from the
successive sessions of the Supreme Council as well as
the major organizations and institutions which evolved
under auspices of the GCC Secretariat General.

As far as the review and evaluation are concerned, it can

be concluded that the GCC states have stepped
tremendous strides in all fields of development work.

Indeed, many of the challenges surrounding the

development efforts have been surmounted by national as
well as integrated policies pursued side by side at the
same time.
However, the latest international, regional, and local
developments have brought forth changes over the past
years.
These changes are likely to have dangerous impacts not
only on the development process in the member states
that seeks to achieve economic and social progress—
GCC States being among them – but also on the future of
the peoples of those countries, the continuity of their
existence, and their role in the process of global
civilization in the 21st century.

There is no doubt that dealing with these new

developments will constitute one of the major challenges
in any development effort in the future stages.

Mechanisms for Implementing the Strategy:

Indeed, the most important institutional mechanism to
implement the proposed strategy falls within the
GCCSecretariat and the bodies and committee thereof specially
the Unified Economic Agreement and the resolutions taken
at the Supreme Council.

The following are additional mechanisms for the

implementation of the strategy:
1-Recognizing the Planning Agencies in the GCC states as the
main mechanisms for activating the fields of joint and
development efforts and follow-up of these efforts.
2-Creating non-conventionalinstitutional mechanisms to deal
with long term development issues, mainly issues of
technological development, transfer of technology, and
alternative uses of oil, management of the water balance,
information and human resources.
3-Establishing and modernizing sartorial strategies to be
computable with the latest development.
4-Adopting modern development in administrativepractices,
information systems and the means of communication.
5-Creating media inter-link between the GCC states and
concentrating in all the GCC States.
6-Enhancing legislations, laws and regulations, which are
incompatible with efforts aimed at achieving the strategic
objectives over the next phase.
7-The GCC states shall take those aspects of this strategy,
which suit their priorities, capacities and needs in a manner that
it serves the process of joint action between them.

8-The Secretariat General shall, in cooperation with the

concerned entities, hold workshops, scientific seminarsand
symposia with a view to achieving objectives of this strategy. It
shall also consult and coordinate with regard to drawing up
policies and programs necessary for implementing the
provisions of this strategy.
9-The Planning and Development Committee shall review this
strategy on a regular basis to ensure that it copes with the local,
regional and international developments.
Expected Developments in the Gulf Countries
In order to conduct an overview of expected developments in the
Gulf Countries over the next Ten Years, it is necessary to
examine the countries’ education systems, the major challenges
facing it, and the future prospects for educational development.

The Gulf leaderships have articulated its vision regarding the

countries’ development towards a diversified, knowledge-based
economy through long-term plans being undertaken in the
countries.
The plan focuses on high value-added economic sectors, each of
which has its own sub-plan covering economic development;
1- Social Development,
2- Infrastructure,
3- Land and Environment,
4- Security, Justice and Safety,
5- And Excellence in Governance.
Ultimately, the leadership’s visions of the Gulf countries are to
create a country that encompasses a coherent society that
A- Preserves its Identity;
B-A high level education system;
C-A health system with global standards;
D- A competitive knowledge-based economy;
E-A secure community and fair judiciary;
F-A sustainable environment and integrated infrastructure;
G- And a distinctive global status.
In addition, it is important to recognize that the growth of any
knowledge-based economy requires;
Three Stages of Development
1- A Coherent Infrastructure:
Including public sector capital expenditures, transport,
education and healthcare.
2-Efficiency in Manufacturing:
Includes presenting opportunities for foreigner investment,
Industry, production and exports, facilitation of business
activities , and programs for the industrial sector.
3-Knowledge and creativity:
Includes applied research, development of talent, higher
education excellence, protecting intellectual property,
creativity and entrepreneurship development, concentrating
on value added services, and international partnership.