Most defence contracts in the Middle East and North Africa are simple but are not appropriate for today’s more complex conditions. Instead, they need more advanced contracts that involve closer customer–supplier relationships. The three more advanced contracting models are: performance-based logistics contracts, availability-based contracts, and capability-based contracts.
Public sector thought leadership
The following articles were written by Strategy& partners and other senior professionals on key topics in the public sector.
GCC countries need to replace the prevalent linear economic model of “take, make, use, waste,” which has been to the detriment of the region economically, environmentally, and socially. Instead, GCC countries should adopt in a holistic manner the circular economy model, which optimizes the consumption of finite resources, maximizes product utilization, and recovers by-products and waste.
Armed forces in the Middle East and North Africa need a more realistic approach to defence readiness, putting aside the old system that exaggerates their preparedness. Instead, they need to set predictable readiness cycles that provide feasible and realistic readiness reporting, thereby allowing them to respond appropriately to a wide range of anticipated threats and challenges.
Governments in the Middle East and North Africa should focus on scale-ups, small- and medium-sized enterprises with proven business models that are undergoing a rapid growth phase. Policymakers should improve their scale-ups ecosystems across four growth pillars: business fundamentals, business propellers, demand creators, and country readiness.
GCC countries need to foster their research ecosystems to produce high-quality research that can lead to innovation and that can inform public policy. They must improve research capabilities and the quality of output, create national research frameworks, invest in building their local talent, fund research on a performance basis, encourage research in high-priority socioeconomic sectors through collaboration with enterprises, and establish an effective intellectual property framework.
GCC militaries need to concentrate on human capital development after over a decade of focusing on modernising equipment and doctrine. Governments need to reform military HR models so that they attract the most talented individuals, provide them with proper training, use them more efficiently, and support their post-retirement integration into society.
More reports and studies
Triggering change in the GCC through behavioral insights: An innovative approach to effective policymaking
GCC states can integrate behavioral interventions into their policymaking processes. Behavioral interventions involve tools such as framed communication, peer comparisons, default options, role models, games, and competitions to influence people to change how they think and act. When paired with conventional policy levers and a supporting infrastructure, these tools can help policymakers achieve key social, economic, and environmental objectives more effectively.
Reconsidering military ICT security: A risk-based approach to modernization and information superiority for GCC armed forces
GCC militaries must reconsider how they manage information. They should accept that sharing information comes with risk that they can actively manage. GCC militaries can thereby share and safeguard information at the same time, while handling information based on how likely it is to be lost and the effect of its loss.
Middle East governments need a way to keep track of their performance as they begin work on large-scale economic and national development plans. They should adopt outcome-based performance management, whose key aspects include the role and structure of a central performance management entity, key enablers in the areas of human capital, culture change, technology, and measurement; and flexibility in altering the approach as circumstances warrant.
GCC governments must spend more thoughtfully on defence to develop a more vibrant manufacturing sector in the region, with more jobs for GCC nationals. In the next decade, demand for local defence products and services could grow to approximately $30 billion annually from a current level that we estimate to be around $6 billion.
GCC family philanthropies could maximize the impact of their charitable giving and create a legacy of philanthropy around their family by adopting a more modern approach like leading global family-owned philanthropic institutions. To do so, they will need to institutionalize their philanthropic involvement, introduce innovative financing tools, and implement impact measurement.
GCC governments need to strengthen their consumer protection policies. The task is magnified by the rise of e-commerce and the sharing economy, which must be addressed alongside the typical consumer protection risks that have long existed. GCC governments should look at the relevant institutions, decide when to use prevention versus enforcement, involve better-informed consumers, and take a long-term view of consumer protection.
The state-led economic model is no longer appropriate to the GCC countries as it is undermined by oil dependence, a lack of workforce diversity and skills, a growing need for public services, and insufficient innovation. One effective response is private-sector participation through a comprehensive strategic program of public–private partnerships and privatization initiatives that covers all major sectors of the economy.
For quality learning to take place at the primary and secondary school levels, countries need to have robust protection frameworks for children.
How GCC companies can become global competitors: Adopting a capabilities-driven strategy to avoid growth traps
GCC companies must develop powerful capabilities through internal development, mergers and acquisitions, or partnerships if they want to maintain their growth and improve their positioning. As most large GCC companies are linked to the state, governments need to assist by upgrading corporate governance practices.
The GCC countries are in a fiscal crunch. All GCC governments have announced spending cuts, but conventional strategies, such as across-the-board or narrowly focused cuts, could do irreparable harm to GCC countries’ economic and social development. Instead, they need a more effective approach — one that enables them to cut costs and grow stronger simultaneously. This approach is called Fit for Service.
Surviving disaster: How to reemerge as a tourism destination after a period of political instability
Political stability and safety are prerequisites for tourism, which is why countries must make plans to recover their reputations after incidents of political unrest. Countries need crisis management and perception management. Once a negative event occurs, countries should incentivize tourism, whether from domestic or international sources. Countries should also develop crisis-immune tourism products.