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Helen Avery

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How to manage change creatively: unravelling the conundrum of business-state relations


  • Helen Avery

Summary, in English

Numerous vulnerabilities have been noted in the current structures of the Gulf economies, including dependency on hydrocarbon exports, the need for fiscal reforms and alternative sources of state revenue, as well as limited incentives in the status-quo for initiative and productive activities. However, diversification, business development and transition away from hydrocarbon dependency require the capacity to make informed and strategic long-term choices, based on not only on existing strengths and competitive advantages within the current global landscape, but taking into account foreseeable needs and future developments. These include both regional or domestic developments and the likelihood of major shocks in global economic landscapes. It has been observed that major restructuring of economies was made possible historically through state intervention (Wade, 2004). States clearly have a privileged position for enabling change, since they can provide necessary infrastructure and create a stable climate that supports investment, allowing businesses to operate with a minimum of risk. Clear and credible visions for the future are a vital condition for long term investments in the domestic economies, while excessive regulations, clientelism and the fear of political upheavals can act as deterrents. In the case of the Gulf states, the question is thus how to develop wise policies and mechanisms, by identifying critical points of leverage rather than using blanket measures.To avoid defensive reactions or flight of capital and capacity, visions for domestic development need to generate confidence and trust, giving sufficient attention to mechanisms of enabling change that simultaneously permit a smooth phasing out of dysfunctional structures. Major challenges observed today include the demographic profile of the countries, expectations as well as the mismatch between existing skills of the labour force and the capacity needed for restructuring the economies. Maintaining a social contract will therefore continue to depend on measures of distribution and ensuring employment for young people in the region, while at the same time orienting the economy towards new types of production.The paper will consider possible pathways towards economic sustainability in the Gulf states drawing on systems and transition theory (Geels, 2005; Twomey & Gaziulusoy, 2014). In the context of the Gulf, it has been argued that conventional distinctions between private and public sectors can be misleading, to the extent that public actors can be stakeholders in the economy. In the analysis, emphasis will therefore be on implications of policy choices for the real economy and future capacity, rather than on public versus private ownership. The analysis will further outline the heterogeneity of the economic fabric and discuss both synergies and conflicts of interest between different sectors and industries.


  • Centre for Advanced Middle Eastern Studies
  • Middle Eastern Studies
  • MECW: The Middle East in the Contemporary World

Publishing year




Document type

Conference paper: abstract


  • Economics and Business
  • Environmental Sciences


  • business-state relationships
  • Gulf economies
  • hydrocarbons dependency
  • structural adjustment
  • infrastructures

Conference name

Gulf Research Meeting 2019

Conference date

2019-07-15 - 2019-07-18

Conference place

Cambridge, United Kingdom