Tarek Coury
Associate, The Dubai Initiative
Contact:
Email: tarek.coury@dsg.ae
Experience
Tarek Coury is Assistant Professor of Public Policy at the Dubai School of Government. Dr Coury's current research is on the political economy and macroeconomics of the Gulf States. In addition to macroeconomic aspects of regional integration, Dr Coury is interested in the growth impact of sovereign wealth funds and natural resources revenue, and the development of financial markets in the region. Dr
Coury's other research interests are in macroeconomic theory, decision theory and game theory. Dr Coury was previously Economics Faculty at the University of Cambridge and later at the University of Oxford. He received his Economics PhD from Cornell University in 2003.
November, 2009
Oil, Labor Markets, and Economic Diversification in the GCC: An Empirical Assessment
Working Paper
By Tarek Coury, Associate, The Dubai Initiative and Chetan Dave
In a bid to reduce their dependency on oil and natural gas revenues, GCC governments have recently invested considerable resources to diversify their economies.This paper provides an empirical assessment of economic diversification in the GCC for the period 1980-2005. In particular we assess whether oil and natural gas revenues, government policies and foreign flows of labor have contributed to greater economic diversification, proxied by real growth in non-hydrocarbon GDP per worker. To our knowledge, this is the first paper that analyzes economic diversification in the Gulf using panel data techniques that explicitly treat the GCC as an economic block.
We find that lagged hydrocarbon revenue is the only variable consistently associated with subsequent economic diversification; this is in contrast to government expenditures whose impact on diversification is negative, large, and significant. We also find that population growth has little impact on either growth of overall GDP per worker or non-hydrocarbon GDP per worker; we present an economic growth model that takes into account features of the labor market structure in the Gulf to explain this finding. Finally, we present some empirical evidence consistent with claims of greater macroeconomic and financial integration within the GCC.
