Explain the factors that have led to rapid economic growth in the Gulf States?
When we speak of the Gulf States we instantly associate itself with their vast wealth in the oil sector. Through oil and gas the money generated, much of it is transferred into sovereign wealth funds to invest in projects around the world, which has increased the wealth of the Gulf States by having chunks of business and industry worldwide. This wealth has also given the states the capacity to invest in infrastructure such as airports where for example in Doha from 2008 where the airport had a ten million capacity to 2015 where there will be a 90 million capacity. Qatar, the UAE and Bahrain have invested the most into these projects to increase their global connections and become a knowledge ...view middle of the document...
The creation of free trade zones including the ‘Dubai Internet and Media cities’ and ‘Dubai Knowledge village’ have encouraged big TNC’s to set up businesses with the likes of Microsoft, IBM, and CNN all have offices set up in the Middle East. The government in Bahrain has used the F1 grand prix to gain international status and the 2010 round of WTO world trade talks took place in Doha, Qatar. Investment in infrastructure in Dubai such as the Burj Khalifa, these together have promoted the region globally and brought money into the area. The small Gulf States have been characterised by the investments in education and high quality research. Education is free from primary to higher levels and have created links between their own universities and those of the best institutions worldwide for example Masdar City in Abu Dhabi is supported by MIT. In the rest of the UAE, British and American Universities have outposts including Heriot-Watt, Harvard and NYU. In turn this investment in education has created a skilled and desired workforce again big TNC’s are attracted by this and as a result Foreign Direct Investment has risen sharply in most countries in the Gulf region.
The small Gulf states are large labour importers, with a small indigenous population they are heavily reliant on a imported labour. Thus the region has become a migration hot spot where they exploit the cheap force of south Asian workers from Pakistan and Bangladesh who are creating the Gulf’s dreams for the future a process made simpler through globalisation. The cheap workforce alone means nothing without the access to global markets, with US military intervention in the Gulf, an alliance has been forged which has in turn led to the gulf states having access to these markets leading to exponential economic growth.