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How to manage change creatively: unravelling the conundrum of business-state relations

Avery, Helen LU (2019) Gulf Research Meeting 2019
Abstract
Numerous vulnerabilities have been noted in the current structures of the Gulf economies, including dependency on hydrocarbon exports, the need for fiscal reforms and alternative sources of state revenue, as well as limited incentives in the status-quo for initiative and productive activities. However, diversification, business development and transition away from hydrocarbon dependency require the capacity to make informed and strategic long-term choices, based on not only on existing strengths and competitive advantages within the current global landscape, but taking into account foreseeable needs and future developments. These include both regional or domestic developments and the likelihood of major shocks in global economic... (More)
Numerous vulnerabilities have been noted in the current structures of the Gulf economies, including dependency on hydrocarbon exports, the need for fiscal reforms and alternative sources of state revenue, as well as limited incentives in the status-quo for initiative and productive activities. However, diversification, business development and transition away from hydrocarbon dependency require the capacity to make informed and strategic long-term choices, based on not only on existing strengths and competitive advantages within the current global landscape, but taking into account foreseeable needs and future developments. These include both regional or domestic developments and the likelihood of major shocks in global economic landscapes. It has been observed that major restructuring of economies was made possible historically through state intervention (Wade, 2004). States clearly have a privileged position for enabling change, since they can provide necessary infrastructure and create a stable climate that supports investment, allowing businesses to operate with a minimum of risk. Clear and credible visions for the future are a vital condition for long term investments in the domestic economies, while excessive regulations, clientelism and the fear of political upheavals can act as deterrents. In the case of the Gulf states, the question is thus how to develop wise policies and mechanisms, by identifying critical points of leverage rather than using blanket measures.To avoid defensive reactions or flight of capital and capacity, visions for domestic development need to generate confidence and trust, giving sufficient attention to mechanisms of enabling change that simultaneously permit a smooth phasing out of dysfunctional structures. Major challenges observed today include the demographic profile of the countries, expectations as well as the mismatch between existing skills of the labour force and the capacity needed for restructuring the economies. Maintaining a social contract will therefore continue to depend on measures of distribution and ensuring employment for young people in the region, while at the same time orienting the economy towards new types of production.The paper will consider possible pathways towards economic sustainability in the Gulf states drawing on systems and transition theory (Geels, 2005; Twomey & Gaziulusoy, 2014). In the context of the Gulf, it has been argued that conventional distinctions between private and public sectors can be misleading, to the extent that public actors can be stakeholders in the economy. In the analysis, emphasis will therefore be on implications of policy choices for the real economy and future capacity, rather than on public versus private ownership. The analysis will further outline the heterogeneity of the economic fabric and discuss both synergies and conflicts of interest between different sectors and industries. (Less)
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author
organization
publishing date
type
Contribution to conference
publication status
in press
subject
keywords
business-state relationships, Gulf economies, hydrocarbons dependency, structural adjustment, infrastructures
conference name
Gulf Research Meeting 2019
conference location
Cambridge, United Kingdom
conference dates
2019-07-15 - 2019-07-18
language
English
LU publication?
yes
id
a5145ad5-24dd-4b3b-baec-65529905696e
date added to LUP
2019-03-27 16:40:58
date last changed
2019-03-28 14:16:32
@misc{a5145ad5-24dd-4b3b-baec-65529905696e,
  abstract     = {Numerous vulnerabilities have been noted in the current structures of the Gulf economies, including dependency on hydrocarbon exports, the need for fiscal reforms and alternative sources of state revenue, as well as limited incentives in the status-quo for initiative and productive activities.  However, diversification, business development and transition away from hydrocarbon dependency require the capacity to make informed and strategic long-term choices, based on not only on existing strengths and competitive advantages within the current global landscape, but taking into account foreseeable needs and future developments. These include both regional or domestic developments and the likelihood of major shocks in global economic landscapes. It has been observed that major restructuring of economies was made possible historically through state intervention (Wade, 2004). States clearly have a privileged position for enabling change, since they can provide necessary infrastructure and create a stable climate that supports investment, allowing businesses to operate with a minimum of risk. Clear and credible visions for the future are a vital condition for long term investments in the domestic economies, while excessive regulations, clientelism and the fear of political upheavals can act as deterrents. In the case of the Gulf states, the question is thus how to develop wise policies and mechanisms, by identifying critical points of leverage rather than using blanket measures.To avoid defensive reactions or flight of capital and capacity, visions for domestic development need to generate confidence and trust, giving sufficient attention to mechanisms of enabling change that simultaneously permit a smooth phasing out of dysfunctional structures. Major challenges observed today include the demographic profile of the countries, expectations as well as the mismatch between existing skills of the labour force and the capacity needed for restructuring the economies. Maintaining a social contract will therefore continue to depend on measures of distribution and ensuring employment for young people in the region, while at the same time orienting the economy towards new types of production.The paper will consider possible pathways towards economic sustainability in the Gulf states drawing on systems and transition theory (Geels, 2005; Twomey & Gaziulusoy, 2014). In the context of the Gulf, it has been argued that conventional distinctions between private and public sectors can be misleading, to the extent that public actors can be stakeholders in the economy. In the analysis, emphasis will therefore be on implications of policy choices for the real economy and future capacity, rather than on public versus private ownership. The analysis will further outline the heterogeneity of the economic fabric and discuss both synergies and conflicts of interest between different sectors and industries. },
  author       = {Avery, Helen},
  keyword      = {business-state relationships,Gulf economies,hydrocarbons dependency,structural adjustment,infrastructures},
  language     = {eng},
  location     = {Cambridge, United Kingdom},
  title        = {How to manage change creatively: unravelling the conundrum of business-state relations},
  year         = {2019},
}