Gulf Exports: Quality & Quantity

  • 9 March 2006

Apart from oil, which constitutes around 90% of the GCC exports, the other exports from the region to international markets constitute re-exported goods, raw materials, or low-quality industrial products, which may not be in demand in the near future. If the high and medium quality products account for no more than 15% in Gulf state, this figure exceeds 75% in certain Asian countries. This unusual situation, which has made Gulf states a major consumer market, has been a natural outcome of many factors. According to available figures, these states lag behind other countries in their spending on scientific research and technological development. The total spending of the Gulf states on scientific research and technological development accounts only for 0.35% of the Gross Domestic Product, while the average spending per capita by these states on research and development does not exceed US$ 5.00. This is in stark contrast to the US$ 230 per capita spent by the rest of the world, which amounts to 2.5% of the gross world product on research and development.

This situation leads to another oddity. The annual report of the International Intellectual Property Organization, which is an organ the United Nations, indicates that the number of patent applications submitted from around the world last year totaled about 134,000. Out of this, the combined share of Gulf states came to less than 100 applications. The quality of the applications demonstrated more anomalies than these statistics.

This situation clearly reveals that Gulf states heavily depend on imported technological services, from simple to sophisticated, as they lack a clear understanding of the importance of research and development as part of the technological and scientific foundation required for Gulf industrial development. This problem is exacerbated by the lack of coordination among universities, institutes, industrial bodies and above all an absence of legislation for organizing and encouraging research and development. At the same time, these states draw criticism not just for poor spending on research and development activities, but also for lack of innovation and development among companies and establishments and lack of coordination and cooperation between the local research and technology centers.