RIYADH: The Gulf Cooperation Council region has the potential to grow its gross domestic product by 1.6 percentage points over the next 10 years by utilizing a new productivity index, a study showed.
The change from 3.8 percent to 5.4 percent over the a decade would add more than $2.5 trillion to the GDP of GCC countries, according to a report by Strategy& Middle East, part of the PwC network.
In its findings, the multinational consulting firm introduced a new way of measuring productivity that includes dimensions such as environmental impact, health, innovation, and the quality of institutions.
Accordingly, countries in the region can unlock their performance by leveraging the Productivity Potential Index to identify the weakest determinant, and then lifting that to the level of the best-in-class nations, the report suggested.
“At a time when the world is looking to become more sustainable, it is essential to have appropriate tools for measuring economic progress that take into account criteria such as the environment and biodiversity, along with a range of social capital measurements,” said Dima Sayess, partner and Ideation Center lead at Strategy&.
She added: “This new index fills an important gap.”
This index is considered crucial to elevate the economic forecast, as traditional measures of productivity have not included important dimensions such as climate change, biodiversity loss and social change as well as aging populations and other 21st-century challenges.
Moreover, the new system is expected to help countries easily identify the strongest and weakest aspects of their economic performance, and highlight the elements that can become the biggest game changers for productivity and growth.
Additionally, it will also allow policymakers with a practical view of how they can close gaps and leapfrog performance.
“The potential boost to GCC economic growth from a better understanding of the determinants of productivity is impressive and, if its findings are acted upon, this could substantially improve the lives of people in the region over the next decade,” said Chadi Moujaes, partner with Strategy&.
He added: “We hope our research will help governments everywhere identify more accurately where they can make a significant difference to their productivity and economic growth performance.”
