AI to play 'key role' in GCC economic prosperity, but experts warn of challenges

UAE could see GDP boost of up to 35% by 2030 from AI initiatives, report indicates

Increased interest and investment in AI could help bolster GCC economies in the years ahead, according to experts at a recent discussion hosted by the Arab Gulf States Institute in Washington. Khushnum Bhandari / The NationalShow less

Artificial intelligence will probably help Gulf Co-operation Council countries to increase efficiency, productivity and accelerate innovation, but risks remain from a possible AI-fuelled labour market disruption, experts said during a panel discussion at the Arab Gulf States Institute in Washington.

The panel, which focused on economic prospects and policy challenges in GCC countries for 2025, was based on a report by International Monetary Fund staff.

The report said that AI could help to boost gross domestic product by as much as 35 per cent in the UAE by 2030, and that the fast-developing technology could make up at least 12 per cent of Saudi Arabia's GDP.

Yet the road to AI prosperity might not be completely smooth, the report's authors warn, especially with AI's potential to disrupt the labour market.

The Arab Gulf States Institute forum on economic prospects and policy challenges, in Washington.

“There are also potential major challenges, especially the exposure of almost 40 per cent of global employment to AI,” the report said. "As such, it remains crucial to upgrade skills in the labour market, as well as to conduct careful risk assessment to ensure ethical and responsible AI practices and to regularly evaluate the effectiveness of implementation strategies."

Ken Miyajima, a senior economist for the IMF, said the the AI analysis for the recent report was based on research in relation to Qatar's labour market.

"Specifically for Qatar ... the way the jobs are distributed between expatriated workers and nationals, the upshot is that there's a lot of jobs with exposures [to AI] but also a lot of jobs with complementaries, so in such cases the overall impact of AI on labour market jobs and probably on economic activity will be positive," Mr Miyajima said.

"Similarly, these [GCC] countries are considered to be positioned well for future development in AI," he added.

Amine Mati, assistant director in the IMF's Middle East and Central Asia department, said that simply investing in AI would not necessarily guarantee any countries success.

"You need that human capital, you need the infrastructure to be there," Mr Mati said. "All these data centres are great but in the end to benefit everyone you need those prerequisites there."

Overall, the IMF research projected that the upside of AI would overshadow any negatives, and that countries such as the UAE had prepared to make the most of AI research and development.

“It's well positioned to become a hub for AI and digital innovation supported by the AI and digital economy strategies, the national programme for AI, and the establishment of both the Ministry of AI, the first in the GCC. and the UAE AI Council,” the report said.

Several years before AI was the technology topic of the day, prompting unprecedented investment and research, the UAE had sought to be a leader in artificial intelligence research.

In 2019, the country announced the Mohamed bin Zayed University of Artificial Intelligence, one of the world’s first dedicated AI educational institutes.

The country also recently became the first in the Arab world to join 54 other countries to become part of the Hiroshima AI Process Friends Group, which is dedicated to AI safety and security.

Sam Altman, founder and chief executive of OpenAI, whose ChatGPT helped AI to go mainstream, told the 2024 World Government Summit in Dubai that the UAE would be well positioned to lead discussions about a global AI watchdog system.

According to the Stanford Institute for Human-Centred AI, the UAE has been ranked fifth on the Global Vibrancy Tool 2024, indicating its position as a leader in artificial intelligence, behind India, the UK, China, India and the US.

As for the potential for labour disruption, according to online learning platform Coursera, the UAE, along with other countries in the Middle East and North Africa, have shown a sharp increase in upskilling, with more enrolments in AI-related courses to try to future-proof careers.