Saudi Arabia and the UAE have remained the dominant economies in the Arab region, accounting for nearly 46 percent of the total Arab GDP in 2023, according to an official report. The gross domestic product of Saudi Arabia, the world’s largest oil exporter, stood at nearly $1.069 trillion in current prices last year, accounting for 31.3 percent of the total Arab GDP. The UAE followed with a GDP of around $509.2 billion in 2023, representing 14.9 percent of the Arab GDP. The report was published by the Kuwaiti-based Inter-Arab Investment Guarantee Corporation (IAIGC), an affiliate of the Cairo-based Arab League.
The report also highlighted the efforts of Saudi Arabia and the UAE to diversify their economies amid the challenges posed by the COVID-19 pandemic. Both countries have implemented reforms to enhance their non-oil sectors, such as trade, tourism, technology, and renewable energy. Saudi Arabia launched its Vision 2030 plan in 2016, aiming to reduce its dependence on oil and transform its economy and society. The UAE also unveiled its Vision 2021 and its Centennial 2071 strategies, which focus on innovation, sustainability, and human capital development. The two Gulf countries have also invested heavily in digital transformation and smart solutions to cope with the changing needs of their populations and businesses.
The two Gulf countries rank high on the Global Economic Diversification Index
The economic diversification efforts of Saudi Arabia and the UAE have also been recognized by the Global Economic Diversification Index (EDI), a comprehensive policy tool that measures the degree of economic diversification of countries. The EDI was released by the Mohammed Bin Rashid School of Government (MBRSG) at the World Governments Summit (WGS) in Dubai earlier this week. The UAE achieved the highest EDI score among the GCC countries, at 95.7 in 2022, compared to 90.9 in 2020. Bahrain was a close second, scoring 93.7 in 2022, compared to 92.7 in 2020. Saudi Arabia and Oman showed the fastest pace of improvement, gaining more than 10 points between 2020 and 2022, compared to their score in 2000.
The two Gulf countries contribute to the growth of the Arab region
The report by IAIGC also showed that the Arab region as a whole witnessed a recovery in its economic performance in 2023, after a sharp contraction in 2020 due to the pandemic. The total Arab GDP increased by 4.1 percent in 2023, reaching $3.42 trillion, compared to a decline of 5.4 percent in 2020. The report attributed the recovery to the gradual easing of lockdown measures, the resumption of economic activities, and the rollout of vaccination campaigns. Saudi Arabia and the UAE played a key role in the recovery of the Arab region, as they accounted for 43.9 percent of the total Arab GDP growth in 2023.
