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The private sector has played a great role in the development of Gulf economies in the past century. It was the centre of gravity of regional economies in the pre-oil era thanks to its various activities and strong association with key sectors.
In the pre-oil stage, businessmen and trading establishments were known for their social activities and contributions to the drafting of regulations and laws that govern economic activities in the Gulf region either through chambers of commerce and industry, or through their individual efforts before the establishment of these chambers.
Therefore, all economic laws were in tune with the nature of economic activities that time, which in turn had led to the transformation of some Gulf cities into regional hubs.
However, the oil discovery led to the drift of the centre of the gravity from the private sector to the oil sector owned by the public sector, which gave priority to oil production and sidelined other economic activities, especially the commercial and financial sector, which earlier occupied a higher position.
Coinciding with this development, the role of the private sector in the legislative and legal system has weakened in the Gulf, which led to a rift between the ambition of the private sector and its social and legislative role.
Rise in capability
However, the investment capabilities of the private sector have tremendously increased in the past years.
So, the business community always stresses the need to increase the private sector's contribution to the development process. They also call for opening more investment opportunities before the private sector and its various activities to contribute effectively to the diversity of GCC economies away from oil.
Figures show that the GCC private sector has more than $1,000 billion invested abroad, which is a huge amount that can make a qualitative leap in GCC economies if 20 per cent of this amount is invested at home.
The question is how can we attract a portion of these investments to the GCC countries? This is possible if the private sector is allowed to take part in the legislative process, which matches its role in development.
Furthermore, opening up more investment opportunities before the private sector, such as investment in petrochemical industries in partnership with the public sector, can help. This suggestion was discussed by chambers of commerce and the Legislative Authority of the Gulf Cooperation Council, which underlined the importance of harmony between the private sector's contribution to the legislative structure and its growing economic role.
Meanwhile, this issue gains an additional importance in view of the Gulf Common Market, which enables the private sector to coordinate its activities, and set up new projects that would not have been possible before due to the difference between laws in GCC countries.
Enthusiasm
In fact, the private sector has welcomed the creation of the common market with enthusiasm, despite its weak contribution to the components of this promising market. But obstacles have blocked the implementation of the agreement terms as concerned authorities still abide by the old rules.
Consequently, there is a difference between signed agreements and ground realities when it comes to the private sector, which through its economic activities, is trying hard to benefit from opportunities offered by the common market.
The writer is a UAE economic expert.
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