The growth of India and China is key to the growth of GCC economies, says Standard Chartered.
Asian tigers' growth key for GCC economies
GCC states should benefit from plans to diversify economies in China and India, says Standard Chartered's chief economist.
Both Asian tigers are likely to need to ramp up spending on oil and other commodities abroad to achieve their economic goals in the coming years.
"China's five to 12 year plan is probably the most significant event taking place in economic terms this year and has not received as much attention as it would have done because of other events," said Gerard Lyons, chief economist, of Standard Chartered in Dubai today.
"It aims to move China up the value curve and within it China is likely to continue to invest heavily overseas including China and North Africa as its demand for resources is intense."
Under India's recently announced budget, the country hopes to lift the size of its manufacturing sector to 25 per cent of its economy over the next decade. Manufacturing accounts for about 16 per cent of growth at the moment.
"If India starts to do that and open up, as I think it will, it will have a transformational impact on the Gulf region," said Dr Lyons.
India's emergence would have as big a benefit for the Gulf as China's economic reform did for East Asia in the past decade, he said.
Already among the biggest consumers of raw materials, the rapid recovery of China and India from the global financial crisis has helped to drive the recent commodities bull run.