Oil Resource Abundance in the Gulf Cooperation Council Countries: A Curse or a Blessing?

Abstract

The purpose of this research is to investigate whether oil abundance in the Gulf Cooperation Council (GCC) countries promotes or hinders their economic growth. Therefore, several variables were utilized to include: the gross domestic product (GDP), oil production, gross fixed capital formation, total population, electricity consumption, and inflation. The study covers 37 consecutive years from 1981 to 2017, and employs the autoregressive distributed lag (ARDL) model to estimate the oil-growth long-run relation-ship. The findings reveal that oil abundance in the GCC countries had both short-run and long-run growth-enhancing effect. In addition, the variables of total population, electricity consumption and gross fixed capital formation found to have significant positive coefficients in the long-run, suggesting that oil sector has given the opportunity to other factors of production to contribute to economic growth. Similarly, the results show a positive relationship between inflation and economic growth suggesting that higher rate of inflation is associated with faster economic growth. The study concludes that oil abundance on its own does not behave as a curse in the GCC coun-tries.