An Assessment of the Benefits of Economic Integration for the Arabian Gulf States: The Effects of Increased Size
Abstract
The purpose of this paper is to assess the potential advantages of economic integration, and in particular of the resulting economies of scale, for the GCC members. What factors have contributed to limiting the size of individual country markets for industrial products? How important has economic size been in limiting the industrial diversification efforts of the member states? Which states would benefit the most from economic integration? The main finding of the study are that economic size, especially the small populations of these countries is increasingly limiting the opportunity for expanding industrial output. As a result, increased income has become a major stimulus for non-industrial activities-services/ distribution/ and construction, all of which do not appear to be particularly sensitive to economies of scale. Economic integration is particularly important also given the declining ability of an increasing share of domestic expenditures to stimulate industrial output, i.e., the scope for easy import substitution may be over for most of these countries.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1989
- Accession Number
- ADA529250
Entities
People
- Robert E. Looney
Organizations
- Naval Postgraduate School