GCC nations are at different points in the economic diversification with varying levels of success. This new normal is disincentivizing leaders from implementing reforms that will impact the current incentive structures in the economy.

Incentives for the private sector are missing. Measures to address incentive issues could include reorienting government spending, strengthening private sector competition, and providing guarantees for firms engaged in export activity. Also recommended: implementing labor market reforms to make nationals more competitive for private sector employment.

Work culture needs to change in GCC countries, while labor market reforms are sorely needed. Young people’s sense of entitlement on education as an unemployment benefit and lax work ethics are impediments to maintaining high-quality human resources.  This makes the private sector less globally competitive.

Leaders need to find ways to share wealth other than employing people in the public sector. Universal basic income or transitioning to a more conventional welfare state can be two models.