In the last 50 years, the Gulf has witnessed social and economic transformation at a pace and magnitude few regions in the world have experienced.

The journey has its roots in the 1930s, with the first discoveries of oil deposits in the region. As exploitation of hydrocarbons gathered pace in the 1950s and 1960s, the industry became a pivotal political and economic issue for countries already on the road to independence. Hydrocarbon revenues continue to underpin the economies of the Gulf, but the wealth of natural resources has brought its own challenges. Gulf economies needed to shift from the simple harvesting of royalties to a production- oriented economy. In recent years, the focus has shifted to economic diversification to reduce dependency on a commodity that has occasionally seen extreme price volatility.

Close historical ties, and a desire to work more closely together on common economic challenges, led to the establishment of the Gulf Cooperation Council (GCC) in 1981, by six Gulf States. The organisation groups the Kingdom of Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman.

Today, the Gulf States are harnessing revenues from hydrocarbons to create a sophisticated knowledge-based economy, while also storing value for local populations through long-term global investments conducted by their sovereign wealth funds. This process has increased the Gulf States connections to both the developed and developing markets, elevating the region s status as it becomes a major force in the global economy.

Strategic crossroads

The Gulf region has always been a strategic crossroad between Asia, Africa and Europe. The region began to blossom as a trading hub a little over 2,000 years ago, when a series

29T H E G U L F S TAT E S : A U N I Q U E E C O N O M Y