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Volume :8 Issue : 32 1982      Add To Cart                                                                    Download

STRUCTURAL DEVELOPMENT OF BASIC NON-OIL INDUSTRIES IN THE ARAB GULF COUNTRIES

Auther : By: Dr. Ali Abdul Rahman Khalaf

The Arab Gulf countries in their drive to achieve overall economic development, are seeking earnestly to device appropriate policies for the effective diversification of their economies. Several advantages seem to favour this trend in growth. Chief amongst which is the abundance and cheapness of oil and natural; gas, whether used as sources of power generation, or as raw materials in some branches of petrochemical industries. The copiousness of funds and foreign exchange for the importation of machinery, raw materials and appropriate technologies, represent another favourable factor. In addition, the meager taxes imposed and the almost negligible custom tariffs have both contributed to added advantage to the establishment of varied manufacturing industries.

This paper aims at elucidating some of the basic concepts of industrial development policies and the structural framework of the basic non-oil manufacturing industries in the Arab Gulf region. After reviewing some of the salient features of economic development in the region, the paper assessed the natural endowments stressing the importance and preponderance of Hydrocarbon fuel and the narrowness of the range of raw materials available locally for industrial purposes. Notwithstanding the paucity of natural resources, several factors have contributed to rendering a favourable evolution of the manufacturing sector, namely:

  1. the marked increase in oil production coupled with rocketing prices.
  2. the huge gas surplus which could be utilized for power generation or otherwise wasted,
  3. the accumulation of capital surplus that may be exposed to decay through inflation and the hazards of overseas investment,
  4. avoiding the unhealthy dependence on the depleting oil as the sole source of revenue.

A number of statistical tables showing the development and the role played by basic industries in the overall industrial structures of the Arab Gulf countries, are included and commented upon in this paper, particularly as regards iron and steel, cement, chemical fertilizers and aluminium. Special attention is given to the analysis of production factors and controls influencing petrochemical industries, aluminium smelting and steel, in comparison with some of the developed countries such as the United States. In its concluding part, the paper deals with industrial development in a comprehensive perspective outlining several problems pertaining to scientific and technological development, marketing, financing and inter-state coordination and cooperation in the Gulf region.

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