Year

2020

Degree Name

Doctorate in Business Administration

Department

University of Wollongong in Dubai

Abstract

Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the UAE) are fragile to the fluctuation of the petroleum prices. Every time with the drop in oil prices, the country’s financials and budgets gets strained, projects gets delayed and many of the government’s spending stops. The GCC countries have sensed the need to diversify the economies and have created visions and strategies for diversification of the economy. However, their attempts to diversify their economies for the past decades have met with little success.

For these countries to be successful in diversification they need to have strong factors to support the efforts for economic diversification and development. Factors will serve the economy and the nation to build its capabilities and make sure the efforts for diversification is a success. In this study the “Wheel of Diversification and Development” was created as a framework that can be used by governments to diversify their economies. The model has identified factors that are essential to the diversification of the economy and without proper output of these factors a successful diversification would be difficult.

The model includes 9 factors divided into three wheels: outer wheel is represented by the factor “Natural Resources and Financial Funding”, which is necessary for economic growth. The middle wheel is represented by the three factors “Human Development”, “Policy, Institutions and Governance”, and “Infrastructure”. These factors are very necessary for building capability of the economy to develop and diversify. The inner wheel is represented by five factors, “Export Orientation”, “Innovation”, “Entrepreneurship”, “Private Sector” and “State-Owned Enterprises”. These factors are the ones that support the transfer of the capabilities from the factors of the outer wheels into products or services that can compete globally and maintain its competitive advantage and thus lead to the diversification of the economy. Secondary data from existing research and academic literature was used to create the model.

Using Singapore as a success of economic diversification, the model was applied on Singapore to evaluate how the factors needs to be applied to create successful diversification efforts. Subsequently, the model was used to evaluate the progress of Abu Dhabi’s economy on these factors and highlight the weaknesses that constrain Abu Dhabi from diversifying its economy. Similarly, the model was also used to evaluate the progress of GCC countries on their diversification efforts and identify the weaknesses present. Impact Evaluation methodology was used to assess the effect of each factor on the diversification and development of the economy in the cases of Singapore, Abu Dhabi and GCC.

The final analysis shows the shortfall that Abu Dhabi and GCC countries have on the factors and recommendations are provided about what strategies need to be improved for the development of the diversification model factors so that the goals of diversification and development of the economy can be achieved.

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Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily represent the views of the University of Wollongong.