The GCC will grow in importance as an economic and trading hub by 2020, thanks to profound demographic and social changes and a booming youth population with increasing access to education and newer technologies, said a new research.

The research report from the Economist Intelligence Unit, titled 'The GCC in 2020: The Gulf and its People,' discussed in detail the implications for the future of the Gulf. The research is sponsored by Qatar Financial Centre Authority (QFC).

The profound demographic and social changes that have transformed the six-nation GCC region will continue over the next decade, raising significant questions related to labour and immigration policies, the role of women, and the adequacy of infrastructure and public services, said the research.

'The GCC has one of the youngest populations in the world, and the future development of the region ultimately depends on the success of efforts to educate and employ these young people' noted Jane Kinninmont, the author of the report.

'We see dramatic changes underway in the structure of the workforce, with an increasing number of educated women now keen to have careers. However, dependence on expatriate labour is likely to continue in the long term,' she added.

According to the report, the GCC has one of the fastest-growing populations in the world, which by 2020 will increase by one-third, to 53 million people.

'The vast majority will be under 25 years of age. The rapid growth and the relative youth of the population present serious challenges as well as major opportunities,' the report said.

The GCC population will remain very young, at a time when populations in the US and Europe are increasingly aging, the study pointed out.

In 2020, about 24 per cent of the GCC population will be under 15 years, higher than everywhere else in the world apart from Africa.

'The large size of the young population, which has increasing access to education, the international media and new technologies, suggests that social attitudes and norms may change fast,' it added.

Women empowerment

Another important finding was that the number of women who work will continue to rise, reflecting increasing investment in education for women, changing social attitudes, and newly emerging role models.

'Women already outnumber men in many Gulf universities. Businesses are going to face pressure to adapt the working environment to accommodate childcare needs, but will not necessarily use the same models seen in the West,' the report said.

The report also pointed out that the nationals were likely to remain in the majority in the GCC, with net immigration projected to be slower than it was during the recent oil boom.

'Nonetheless, net immigration is forecast to remain strongly positive, as the private sector will remain heavily dependent on expatriate labour, despite some efforts to nationalise the workforce. The gaps of cost and of skills between nationals and expatriates will gradually narrow, but will not close within the next decade,' the research added.

Expats' contribution

The rising expatriate population, the Economist report said, will contribute to economic growth and an expanding pool of skilled professionals from overseas should help stimulate further economic diversification.

At the same time, GCC countries will face questions about how best to manage immigration, as they face competing pressures from groups that want to protect jobs for nationals and others that want more rights for immigrants.

The treatment of foreign workers will be an increasingly important aspect of foreign relations with source countries, the report pointed out.

This is the second report in a series that examines the likely themes in the development of the GCC economies to 2020.

The report takes a closer look at the population mix of the GCC and concludes that demographic trends, while presenting some major challenges, will support the region’s increasingly pivotal role in the global economy.

Future reports will consider the prospects for diversification into non-hydrocarbons industries, as well as food, water and power security in the region, Kinninmont added.-TradeArabia News Service