{
  "title": "Press Release: The IMF Middle East Center for Economics and Finance, Jointly with the Arab Fund for Economic and Social Development, held a Symposium that Discussed the Path to Economic Diversification in Kuwait and Other GCC Countries",
  "publication": "IMF News, May 16, 2016",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr16223",
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  "summary": "Press Release No. 16/223",
  "publishDate": "2016-05-16",
  "sections": [
    {
      "heading": "Event summary",
      "content": "- Press Release No. 16/223\n- Date: May 16, 2016\n- Organizers: The IMF Middle East Center for Economics and Finance (CEF) jointly with the Arab Fund for Economic and Social Development (AFESD)\n- Venue: Arab Fund’s Headquarters\n- Moderator: CEF Director Dr. Oussama Kanaan\n- Panelists: Professor Ha-Joon Chang (Cambridge University), Dr. Reda Cherif (IMF), Dr. Fuad Hasanov (IMF)"
    },
    {
      "heading": "Context and urgency",
      "content": "- Immediate policy impetus: decline in oil prices from above $100 to about $40 per barrel today.\n- Historical reference: risk of a return of the oil slump of the 1980s–1990s, which previously led to unemployment, falling living standards, and heavy indebtedness in affected oil-exporting countries.\n- Challenge emphasized: addressing low oil prices in the current context of high government spending and rising expectations about the provision of jobs and income transfers."
    },
    {
      "heading": "Findings from the panel discussion",
      "content": "- Core ingredients of successful economic diversification strategies:\n  - Infrastructure investments conducive to private sector growth.\n  - Human capital investments conducive to private sector growth.\n  - Development of sophisticated non-oil export industries.\n- Comparative experience:\n  - Past diversifiers cited: Brazil, Korea, Malaysia, Singapore.\n  - Lessons: countries must experiment and learn from others; incentives for firms and workers need realignment to develop technologically sophisticated export-oriented industries.\n- Nature of diversification:\n  - Diversification does not need to build on existing economic activities; new, often unrelated activities can emerge.\n  - When related to traditional industries, diversification requires products to become increasingly sophisticated and move to more advanced stages of manufacturing.\n  - Choice between service-sector versus manufacturing-led diversification depends on potential productivity gains.\n  - The frontier between services and manufacturing is fading; service sectors more strongly linked to manufacturing can yield greater productivity gains."
    },
    {
      "heading": "Policy recommendations and strategic guidance",
      "content": "- Fundamental change required: oil exporters must change the prevailing economic model toward becoming innovative economies.\n- Policy actions:\n  - Address government failures and market failures that hinder movement toward dynamic sectors.\n  - Realign incentives for firms and workers to move into more dynamic, technologically sophisticated sectors.\n  - Focus on developing dynamic export markets; diversification can begin with a limited set of industries.\n  - Facilitate entrepreneurship.\n  - Prioritize education and social development as central pillars of diversification.\n  - Implement a highly selective industrial policy tailored to the country’s particular economic and social conditions."
    },
    {
      "heading": "Discussion and participants",
      "content": "- Audience composition: participants from the public sector, the banking and business community, academia, and representatives from international and donor organizations.\n- The floor was opened for audience discussion, reflecting a broad range of interests.\n\nIMF Communications Department; Media Relations: E-mail: media@imf.org; Phone: 202-623-7100\n\n---\n\n Content in this bundle\n\n- Pr16223apdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Kuwait and the IMF\n- Kingdom of Bahrain and the IMF\n- Oman and the IMF\n- Qatar and the IMF\n- Saudi Arabia and the IMF\n- United Arab Emirates and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr16223"
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    "Published: May 16, 2016",
    "Press Release No. 16/223",
    "Date: May 16, 2016",
    "Organizers: The IMF Middle East Center for Economics and Finance (CEF) jointly with the Arab Fund for Economic and Social Development (AFESD)",
    "Venue: Arab Fund’s Headquarters",
    "Moderator: CEF Director Dr. Oussama Kanaan",
    "Panelists: Professor Ha-Joon Chang (Cambridge University), Dr. Reda Cherif (IMF), Dr. Fuad Hasanov (IMF)",
    "Immediate policy impetus: decline in oil prices from above $100 to about $40 per barrel today.",
    "Historical reference: risk of a return of the oil slump of the 1980s–1990s, which previously led to unemployment, falling living standards, and heavy indebtedness in affected oil-exporting countries.",
    "Challenge emphasized: addressing low oil prices in the current context of high government spending and rising expectations about the provision of jobs and income transfers.",
    "Core ingredients of successful economic diversification strategies:",
    "Comparative experience:",
    "Nature of diversification:",
    "Fundamental change required: oil exporters must change the prevailing economic model toward becoming innovative economies.",
    "Policy actions:",
    "Audience composition: participants from the public sector, the banking and business community, academia, and representatives from international and donor organizations.",
    "The floor was opened for audience discussion, reflecting a broad range of interests.",
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    "[Kuwait and the IMF](http://www.imf.org/external/country/KWT/index.htm)",
    "[Kingdom of Bahrain and the IMF](http://www.imf.org/external/country/BHR/index.htm)",
    "[Oman and the IMF](http://www.imf.org/external/country/OMN/index.htm)",
    "[Qatar and the IMF](http://www.imf.org/external/country/QAT/index.htm)",
    "[Saudi Arabia and the IMF](http://www.imf.org/external/country/SAU/index.htm)",
    "[United Arab Emirates and the IMF](http://www.imf.org/external/country/ARE/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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