DUBAI, 7 June 2003 — Gulf states must institute major diversification of their oil-dependent economies and open up to foreign investors to boost sustainable growth, the International Monetary Fund (IMF) said yesterday.
“For the Middle East and the Gulf economy more generally, this is certainly a difficult period but it seems that the region has weathered recent storms relatively well,” Managing Director Horst Koehler said in Dubai.
“We expect growth in the region to recover to about 45 percent in 2003. More is achievable and there is further need for structural change.”
Koehler called for “major diversification of the region’s economy and providing a strong basis for opening up to attract more investors and also more transparency. “The Middle East as a whole will benefit” from Iraq’s reconstruction, Koehler said, calling the region an “integral part of the world economy and a key player in the process of global cooperation.”
Koehler, who met Gulf Cooperation Council finance ministers and central bank governors in Qatar on Thursday and Arab Monetary Fund officials yesterday, said he was “impressed” by the commitment of the six GCC countries to regional cooperation. “The GCC countries really appreciate that strengthening economic cooperation and prolonged structural reforms are the best way to foster sustainable economic growth,” he said.
The GCC, which groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, launched a customs union on Jan. 1, but later agreed to delay the implementation of certain parts of the union for up to three years.