Navigating the Energy Transition in the Gulf Cooperation Council (GCC) States: The Role of Industrial Policies in Fostering Sustainable Economic Competitiveness

Abstract

The Gulf Cooperation Council (GCC) states have relied on their abundant oil and gas resources, which have shaped their economic and social structures. The comparative advantage of the oil/gas sectors encouraged the development of those sectors, but other sectors (actual or potential) suffered from comparative disadvantage and shrank or did not develop. The potential of industrial strategy in driving the energy transition and promoting sustainable economic competitiveness in the region is explored. Shifting from a rentier state perspective to a more developmental and entrepreneurial approach, this paper examines the range of economic and industrial policies the GCC states could adopt to facilitate the energy transition. The energy transition requires the identification of potential industries and sectors that can provide the GCC states with competitive advantages. The industrial policy framework must prioritize local content development, skill enhancement, and knowledge transfer to ensure a successful transition.