Social and Economic Trends in the Gulf
Robust growth is expected in the GCC economies 2013, though slower than 2011 and 2012. A growth of 3.7 per cent is expected in The Real Gross Domestic Product that is the GDP this year as compared to a growth of 5.5 percent in 2012. In the non-oil economies, growth is expected to remain strong at 5.5 percent. This will be due to monetary conditions that are accommodating, accompanied by a private sector that has picked a positive momentum. After three years of constant growth, oil GDP is expected to remain flat in 2013 due to weak global demand environment.
In recent years, fiscal policy has been highly expansionary though the government has slowed the pace of spending. Overall spending grew by 20 per cent in 2011 as the economies responded to the uncertain worldwide outlook, while taking advantage of increasing revenues from oil sales. Saudi Arabia posted about 25 per cent increase. The pace of spending growth of the economies is expected to ease in 2012 and 2013, hence the degree of fiscal stimulus. Given the need to meet social objectives and support non-oil growth, the expansionary fiscal stance can be regarded as appropriate. Also leading to an appropriate fiscal stance has been the build-up of the international reserves and the fiscal buffers, as well as the absence of signs of overheating(Timothy, 2013).
In line with the robust non-oil GDP growth, credit growth in the private sector in the GCC has gone up in the past year. The pace in the UAE and Kuwait, though, remains weak. If the slower regional growth is anything to go by, the economies are expecting a slow growth.
Inflation has remained moderate and it is expected to remain at 3.5 per cent in 2013. This is despite strong expansionary policies and growth in the recent years in the region. Rental prices and food have been subdued. These two are the inflation drivers in the GCC. Subsidies have held down food prices while a supply overhang is being experienced in the real estate market in some economies from the pre-2009 boom.
The population in the Gulf is among the youngest in the whole world. This implies that the future of the region largely depends on the ability of the respective governments to successfully educate this population and provide them with jobs.
The current generation is expressive and will go to length to express their thoughts. Whether it is in the form of graffiti, blogs, books, or social networking sites such as twitter, or Facebook. That means that to get the message, one has to know his right place. This as been greatly influenced by growth in technology the world over, not only in the GCC. Typing the words “ Saudi blog” into Google gets you more than one million results. Going through most of his blogs, one is struck by the zeal with which the bloggers write and comment about their day to day life as well as the state of their society. Most of them appear to be on a mission to discuss areas of change in the society while others concentrate on portraying the correct image of the Gulf to the Western world. Others just express their day to day life out there purely for consumption by the public.
Also graffiti has come up as another way of sending the message home by the youth. Cruising the streets of Jeddah, for instance, one finds a haven of graffiti. It has even reached a point where the authorities have established graffiti park so that the youths can go to express their creativity there instead of defacing the city.
Owing to profound social changes and demographics, GCC is set to grow as a trading and economic hub. The youth population is booming with better access to new technologies and education. Such social and demographic changes are expected to continue during the next decade raising serious questions concerning the immigration and labor policies, adequacy of infrastructure, the role of women and public services (Shaikh, 2012).
Also of interest is the rising of educated women to take up careers, and how it has reshaped the workforce. Reliance on expatriate labor, though, is set to continue.GCC population has been observed as one of the fastest growing in the world and is set to increase by one third by 2020. In most of the universities in the Gulf, women outnumber men. Pressure will be mounted on organizations so that child care needs are accommodated.