Pathways to Economic Resilience: Assessing the Economic Diversification Efforts in the GCC Countries

Abstract

This study provides an examination of the economic diversification efforts in the Gulf Cooperation Council (GCC) countries, employing advanced multi-criteria decision-making (MCDM) techniques to offer a more nuanced understanding of these efforts. Utilizing the Global Economic Diversification Index (GEDI) data from 2000 to 2022, the study employs a CRITIC (Criteria Importance Through Intercriteria Correlation)–TOPSIS (Technique for Order of Preference by Similarity to Ideal Solution) modeling framework to statistically weight and rank diversification indicators across production, trade, and revenue dimensions. This combined approach allows for a comprehensive weighting and ranking of economic diversification indicators, ensuring a balanced and rigorous evaluation of each GCC country’s performance. The study uncovers significant disparities among the GCC countries, with Saudi Arabia and the UAE emerging as leaders in economic diversification due to their strategic investments in infrastructure, technology, and human capital. Bahrain, on the other hand, consistently ranks the lowest, highlighting substantial challenges in achieving meaningful diversification. The study contributes to the literature by integrating longitudinal MCDM modeling with a unified diversification index, offering practical insights for tailoring national policies. Implications for policymakers include the importance of coordinated investment in innovation ecosystems, governance reforms, and fiscal sustainability to support long-term structural transformation. These findings underscore the critical need for a multifaceted approach that incorporates technological innovation, infrastructure development, and robust governance frameworks.