This paper looks at economic diversification attempts in the GCC countries from 1993 to 2003. The analysis focuses on studying the terms and composition of trade and changes to the GDP composition to determine if significant shifts are occurring in the countries’ economies. Major economic diversification and value-added activity is now taking place, and has been for years, within the oil and gas sectors of the GCC countries. In addition, major industrial activity is on and infrastructure has been established in the region with varying success. Nevertheless, these successes do not lessen the dependence on oil as the main determinant of the economic wellbeing of GCC states. Diversification attempts, although bearing fruit in some instances, have, by and large, remained insufficient to effect real change. The oil boom in the last few years has given the countries a second chance to develop their economies in a more diversified fashion. However, major reforms need to be undertaken in order to further diversify the GCC economies and make them less dependent on oil and gas.
