Gulf Economic Update SPRING 2022 : Achieving Climate Change Pledges
The Gulf Cooperation Council (GCC) countries were characterized by a robust economic rebound from the pandemic in 2021 and the beginning of 2022 as well as a partial restoration of external and fiscal positions following deep plunges in 2020. The w...
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| Format: | Bief |
| Language: | English |
| Published: |
Washington, DC
2022
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| Online Access: | http://documents.worldbank.org/curated/en/099311005162231016/IDU0d2c7c1730fbdd04b560bdd5013e6eeea66ca http://hdl.handle.net/10986/37472 |
| Summary: | The Gulf Cooperation Council (GCC)
countries were characterized by a robust economic rebound
from the pandemic in 2021 and the beginning of 2022 as well
as a partial restoration of external and fiscal positions
following deep plunges in 2020. The war in Ukraine is
projected to provide a windfall for the GCC; it has also
placed energy security at the forefront of major importers’
agenda, which could accelerate the global green growth
transition. The faster and bolder efforts to decarbonize the
global economy, which the war in Ukraine is likely to speed
up, implies that it is critical to invest the windfall in
the GCC’s economic and environment transition. GCC countries
are facing limits to the oil economy on which they have
flourished for the last seventy years. GCC countries face
twin challenges of (i) how to move to a more sustainable
growth model that is less dependent on oil and downstream
petroleum sectors and that can provide valuable jobs for
their inhabitants while (ii) managing the transition to a
global low-carbon economic environment that could see oil
revenues greatly reduced within the next few decades. The
current situation has sometimes been portrayed as a threat
to the GCC or at the very least as a trade-off between
faster growth and climate sustainability. However, this
special focus section reframes the discussion by focusing on
the opportunities for the region to restructure energy
subsidies. to become renewable-energy powerhouses, and the
importance of getting prices right for an enabling
environment that can place the private sector at the
forefront of the new growth model. The section also
highlights the fiscal space that can be created by
re-thinking energy subsidies and provides a political
economy sensitive approach to addressing the concerns of
households and industry. Linking the expected savings to
investments in renewables and incentives for increased
entrepreneurship and innovative sectors could represent a
solution to one of the GCC’s greatest challenges, producing
high income jobs for its youth. |
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