Energy prices in the GCC countries are low by international standards. These low prices have co-existed with rapid economic development in the region over the past 50 years, but the costs of this policy have also risen in terms of very high energy usage per capita. Providing energy at low prices has also effectively absorbed resources that could otherwise have been invested in human and physical capital or saved for future generations. The implicit cost of low energy prices in the GCC, in terms of foregone revenue, is estimated to be around 5 percent of GDP (about 8 percent of non-oil GDP) this year. GCC countries have been embarking on energy price reform in recent years. The recent decision of the UAE to remove fuel subsidies is an important initiative. Nevertheless, energy prices are generally still below international levels and differ substantially across the GCC countries. In most countries, further steps are needed to raise energy prices to reduce the growth in energy consumption and to support the fiscal adjustment that is necessary in the current lower oil price environment. Evidence in this paper suggests the inflationary impact of higher energy prices in the GCC is likely to be small, and while there may be some adverse effect on growth in the near-term, over the longer-term the growth benefits should be positive. Given the low weight of energy products in the CPI, first round effects of higher energy prices should be limited, while well anchored inflation expectations should help prevent second-round effects. On growth, a gradual increase in energy prices should have a manageable impact on industrial activity, although energy intensive industries will be adversely affected and will need to adjust. In the longer-term energy price reforms could generate significant permanent real income gains for the economy as a whole. More broadly, international experiences suggest that the likelihood of success with energy price reforms increases if the reforms are:

growth in expenditure, GCC governments have started to implement significant fiscal consolidation measures, but more needs to be done. Rapid population growth and booming oil revenues led to large increases in government spending in the GCC in the decade to 2014, which now stands high by international standards. This expenditure is dominated by compensation of employees and other current spending which are large in percent of GDP compared to Emerging Market (EM) countries and other oil exporters. This keeps overall spending above levels consistent with long-term fiscal sustainability and intergenerational equity. The international experience with large fiscal adjustments provides some key lessons for GCC countries. This experience suggests that growth outcomes improve when fiscal adjustments are sustained as part of credible multi-year fiscal plans, rely on expenditure more than revenue adjustment, and lead to improvements in expenditure composition (away from current outlays to more productive spending) and the structure of revenue (away from direct to indirect taxation). Successful fiscal adjustments also tend to be part of wider structural reforms that support growth.

The Cooperation Council for the Arab States of the Gulf (GCC) has been at the epicenter of global energy markets because of its substantial endowment of hydrocarbons. Yet countries in the region have also stated their intent to be global leaders in renewable energy. This collection explores the drivers for the widespread adoption of renewable energy around the GCC, the need for renewable energy and the policy-economic factors that can create success. All six countries within the GCC have plans to include renewable energy power generation in their energy mix for various reasons including: a growing demand for electricity because of increasing populations, an increasing government fiscal deficit due to inefficient subsidies, the need to diversify the economy and global pressure to meet climate change requirements. However, the decision of when and by how much to introduce renewable energy is fraught with complications. In this book, a stellar cast of regional policy and academic experts explore the reasons behind these renewable energy plans and the potential impediments to success, whether it be the declining cost of producing energy from hydrocarbons, an infrastructure which needs to be updated, social acceptance, lack of financing and even harsh weather. Weighing up all these factors, the book considers the route forward for renewable energy in the Gulf region. The Economics of Renewable Energy in the Gulf offers an excellent examination of the adoption of renewable energy in the area. It will be of great interest to academic researchers and policy makers alike, particularly those working in the areas of energy economics, public policy and international relations.

The global and regional economic environment remains challenging. Global growth remains tepid, and although some pick-up is expected, risks are tilted to the downside. Recent volatility in financial markets is having a significant impact on some large emerging markets, highlighting the challenges that will be faced in unwinding the Federal Reserve’s quantitative easing policy. Geopolitical uncertainties in the Middle East are also high.

This book examines some of the driving forces of change in the Middle East and aims to provide a regional outlook. The political and social events of the past years have significantly affected the regional structure across the Middle East, evident in socio-economic systems, security framework and the balance of power across the area. Each chapter focuses on one of the driving forces of change, including the Iran Nuclear Deal, the role of external powers, energy and its political and economic role in the region, the regional balance of power struggle amongst the key regional players and the socio-economic challenges across the region.

This volume brings together outstanding contributions to the Gulf Conference on Sustainable Built Environment, held at the Marina Hotel Kuwait, near Kuwait City. The Proceedings collects 29 papers on a range of engineering and materials challenges, and best practices, addressing development of new sustainable building materials, performance improvement of structures and tall buildings, developing monitoring and analysis techniques and frameworks for existing infrastructure under environmental effects, development of long-term sustainability plans for building stock, and development of energy efficient buildings in the gulf region. The Conference was organized by the Kuwait Foundation for the Advancement of Sciences (KFAS), the Massachusetts Institute of Technology, the Kuwait Institute for Scientific Research, and Kuwait University.

The waste of oil and gas in the Gulf erodes economic resilience and increases security risks. This is the first report to offer practical recommendations that address the key challenges of governance, political commitment, and market incentives from the perspectives of member countries of the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE).