Page 55 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

Think Again: Addressing Misconceptions about the GCC 39

3. The GCC customer “hates us”—global brands and
businesses cannot succeed.
4. Women don’t matter—female consumers, employees, and
decision makers are marginal to the economy.
5. The markets are entirely Arab—the Arab consumer is the
only target market in the Gulf.
Like most misconceptions, these five are the result of misinter-
pretations of the facts or incorrect generalizations based on anec-
dotal data. We address these misconceptions in detail, providing
a more comprehensive and accurate picture of the issues involved
in each.

Misconception 1: It’s all about oil—the region is relevant to
energy-related companies only.
Reality: Oil and gas drive wealth creation, but the range of
economic activity and growth includes far more than just
energy.

WEALTH CREATION THROUGH OIL
AND GAS
Without a doubt, the energy sector is the most important economic
engine in the GCC. For example, the six GCC countries control the
following proportions of the oil and gas markets:

● 40 percent of the world’s known oil reserves
● 22 percent of global oil supply
● 23 percent of global natural gas reserves 1

Global energy markets, therefore, rely heavily on the GCC
economies. Another remarkable statistic underscores how this
reliance is likely to continue as the demand for oil increases world-
2
wide: 90 percent of global spare oil capacity is in the GCC. This
means that the GCC is the single most important region in the
world with respect to oil production, having the greatest capacity to
meet the continually growing demand for oil.
Just as world energy markets rely on the GCC for oil and gas,
GCC governments—which control their nations’ natural
resources—rely largely on oil and gas for their fiscal stability and
for maintaining their high GDP. Energy income provides over