“GCC States Urged to Diversify Economies”
In a September 30, 2009 article in Zawya, Booz & Company Partner Nabih Maroun (Middle East) said that the global economic downturn emphasized the need for further diversification in GCC (Gulf Cooperation Council) economies and highlighted the vulnerabilities in the financial system, driven primarily by high rates of leverage. “To benefit from the global recovery and build a foundation for sustainable growth, GCC policymakers will need to consider a number of key reforms to reshape their fiscal and economic management practices and governance,” Maroun said. Reinforcing his comments were the findings of a Booz & Company study that detailed steps GCC policymakers can take to accelerate the region’s recovery-and protect it from future crises. “The region seemed somewhat sheltered from the crisis, but by November 2008, it was clear that it would not ride out the storm entirely,” said Booz & Company Partner Richard Shediac (Middle East), citing a decline in the GCC stock market, falling oil prices and a dried-up credit market in the region. “Consequently, some states, including Dubai, Kuwait, and Bahrain were significantly affected by the crisis, as were certain non-oil sectors including financial services, real estate and tourism.”