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The drastic decline in oil prices beginning in 2014 has once again highlighted the need for broad-based economic diversification strategies to be implemented in the countries of the Gulf Cooperation Council. This is not something new. In fact, the GCC leaderships recognized the challenge posed by a high degree of reliance on oil revenues as part of their annual state budgets quite some time ago and consistently since. Four years prior to the unveiling of Saudi Arabia’s National Transformation Plan (NTP), for example, the former Minister of Energy, Industry and Mineral Resources, Ali Al-Nuami, argued in 2012 that Saudi Arabia cannot continue to forever rely on oil as a source of income and therefore it would be “best to diversify the economy, industrialize and eventually move to a knowledge society.” Similarly, Kuwait’s Prime Minister Shaikh Jabir al-Mubarak al-Sabah warned in October 2013 that “the current welfare state that Kuwaitis are used to is unsustainable.”[1] Such statements were made at a time when oil revenues stood at unprecedented levels – at 50% and 90% of total government revenues during 2012 and 2015 across the GCC countries[2] – and when there was little to indicate that a prolonged period of low oil prices was imminent.

In response to the awareness that broader economic reforms programs were necessary, all GCC states have issued what they referred to as “Vision” documents outlining their prioritization strategies in terms of how to achieve genuine diversification, enhance the capabilities and capacities of the private sector to lead overall economic growth, and promote employment mechanisms through which the heavy reliance on foreign workers could be lessened over time. The Sultanate of Oman was the first to release “Oman Vision 2020” in 1995, followed by Bahrain (The Economic Vision 2030) and Qatar (Qatar National Vision 2030) in 2008, Kuwait (Kuwait Vision 2035) and the UAE (UAE Vision 2021) in 2010, and finally Saudi Arabia with its Vision 2030 strategy issued in 2016.[3] Several of these documents have since been updated or released in new forms including Oman and Kuwait.[4] 

All documents feature similar medium- to long-term development plans that seek to keep up with the rapid advancement of globalization and the need for better more equipped competitive national economies. In the first wave of ‘Vision’ documents, the emphasis was on providing a general sense of direction alongside trying to assure the national populations that the government was indeed thinking ahead about the need for comprehensive broad-based economic reform program. Given that most these plans, except for the original Omani one from 1995, were developed in a high oil-price environment, the vision documents outlined a broad strategy of where national economies should be headed but there existed a little sense of urgency in seeing many of these plans implemented in the way they were laid out.

Subsequently, in what can be termed as the second wave of ‘Vision’ releases, there was a recognition that previously defined strategies needed to be laid out both more specifically but also realistically.

The Omani Vision of 1995 was thus replaced by first an Oman Vision 2020 strategy and then supplemented by a longer-term document entitled “Oman Vision 2040”. Overall, it became quickly clear many of the issued documents had fallen short of their objectives and thus their expectations. For example, while one goal of the Omani plan was to reduce the share of oil as part of Oman’s GDP from 41% in 1995 to 9% in 2020, no reduction has in fact been accomplished with the share having even increased to 47.2% as of 2014, before coming down to 33.9% in 2015 due to the lower oil revenues.[5] Overall, in all of the GCC states, the role of oil has remained predominant. Even in the UAE, where economic diversification efforts have been the most successful, the contribution of oil to the national economy still stands at 30%. Meanwhile, the UAE has announced targeting a zero-percentage contribution from oil to GDP in the next 50 years.[6]

Four main reasons can be cited as to why the results of the initial vision documents have been limited. For one, visions were generally not tied to specific measurable action plans. Many of the objectives were instead crouched in general and vague terms. Second, the documents were very similar in style and in terms of policy prescriptions even though individual GCC economies face different challenges. The one-size-fits-all strategy that was provided simply could not be applied across the board. Third, economic goals were laid out independently from the governance environment in which they were planned to be implemented. Many of the visions were put together from an economic but not a political economy perspective. And finally, the high oil price environment that existed for nearly 15 years from the start of the century simply took the urgency out of the need to enact widespread structural reforms. If it was not essential, action could be delayed.

Yet, this is not to say that the Vision documents do not fulfill important functions. On the broad level, they can rally the population behind a way forward and create a much-needed societal consensus about economic reform necessities. Equally, the visions do set targets even if these are not always specifically defined. When combined with regular reviews of meeting their objectives, as has been the case in the UAE, the ‘Visions’ can become indicators of having achieved significant milestones. That, in turn, sustains support for when the economic outlook shifts or turns less positive.

At a time when oil prices have once again underscored the absolute necessity for diversification efforts away from a high reliance on hydrocarbon income, combined with a general sense in the population that economic reforms are unavoidable, the window of opportunity exists under which more difficult measures can be pushed through. National ‘Visions” have paved the way for such reforms. Now it is a good time to review their relevance and adjust them to the current circumstances.