GRM 2010 GRM 2011

Abstract Details

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Private Sector and Public Services: What is the nexus in The GCC States?
Paper Proposal Text :
The region of the Arab States of the Gulf (i.e. the Gulf Cooperation Council; GCC) has vast reserves of petroleum that make it a vital source for the global economy. The reduction in oil prices since the summer of 2014, and, in general, their high volatility pose strong challenges to the GCC economies. Indeed, the decline in oil prices is having significant effects on production, consumption and public finance, thus creating an uncertain economic environment, thus reducing the capacity of the Gulf States to continue the provision of public services and especially mega-infrastructure projects. The first challenge in the Gulf States vision is to enable the private sector to play an essential role in achieving sustainable development. Innovation and entrepreneurship are key drivers to diversify and develop the GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates [UAE]).
Another point is that most developed western economies rely on a tax-based system, in which firms are taxed as they make turnover/profits, and any investments in innovation capacity and assets are tax deductible. On the contrary, GCC countries often rely on a ‘fee based system’ in which firms are taxed before they even start. Under this system the incentive to innovate and start a more complex business is deterred.
This study will discuss the potential public-private partnership model that would encourage economic growth in the Gulf countries and overcome these challenges.