Abstract

Middle East countries share a wide bundle of specific structural economic features and one of the latest is a high dependency of these economies on fossil fuels, which is quantitatively demonstrated through the share of oil and gas revenues in total export, but also in gross domestic product composition. This high economic dependency on natural resources on one hand has recently generated a material wealth of Middle Eastern countries which is demonstrated in a gross domestic product, but—on the other hand, contemporary global challenges such as price shocks on international commodity markets are calling for urgent diversification of national economies. This research aims to review key structural features of the economies of the six-member states of the Gulf Cooperation Council and changes in their macroeconomic structures between 1970-2018. It shows country-wise evidence, with respect to diversification of gross domestic product composition, identifying structural shifts between industry, service and agricultural sector. To provide more specific insight into the structure of national economies it examines time changes in oil rents (as a share of GDP), natural gas rents (as a share of GDP), fuel exports (share of merchandise exports). Finally, to verify the hypothesis that shifts in economic structure and GDP composition are accompanied by changes in sources of electricity production. Hence we additionally rely on data regarding sources of electricity production like coal, natural gas, oil, hydroelectric power plants (hydropower) and renewable sources (excluding hydroelectric but including geothermal, solar, tides, wind, biomass, and biofuels). Our methodological settings combine elementary descriptive statistics, time trends analysis, locally weighted polynomial smoothers for visual inspection of pair-wise correlations and panel regression models to capture statistical relationships between data examined. All macroeconomic data used in this research are exclusively extracted from World Development Indicators 2019.

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