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He added that the economic changes do not work in isolation from the political, social and cultural changes. Hence, there is a need for deep understanding of the economic issues on this basis, while new economic models should be developed in accordance with these perspectives.
He said that the GCC economies experience significant transformation towards diversification of the economy and new sources of income, stressing the importance of not tying the extent of strategic transformation with variable changes, as the region had experienced successive cycles of the drop and rise in oil prices. He added that the region’s economies in the past proved resilient and absorbed the shock.
The minister stressed the importance of adhering to international standards and adoption of best practices to achieve greater integration with the global economy. “But we believe it must come within the framework of in-depth understanding of economic and social structures in the region, and developing appropriate policies that promote competitiveness,” he added.
Legarde said, “This event is taking place at a pivotal moment not only for this region but for many other countries that have seen fiscal issues rise to the top of their policy agendas.”
She noted that oil exporting-countries are adapting to a new reality of low commodity prices. “Developing economies need more domestically generated revenue to achieve the new Sustainable Development Goals.”
The IMF Managing Director underlined that the importance of countries’ ability to generate robust government revenue. “This is, of course, the lifeblood of modern states. This is what allows governments to provide public goods that support strong and durable growth.” She said that more reliable sources of revenue would help avoid volatility in public expenditure and pro-cyclical fiscal policy.