The Gulf states, attempting to diversify their economies, have focused largely on transforming their economies. Part of their transformation focus areas is the technology sector. FinTech is a generic term used for all financial technology developments, and has gained a lot of traction in the recent years. As Financial services is one of the main sources of GDP for the GCC states, the GCC governments have focused in promoting the FinTech entrepreneurship spirit, through different initiatives. In the chapter, the authors analyze the FinTech ecosystem development mode for all the GCC countries, focusing on understanding the reason that have made it one of the most successful FinTech ecosystems globally.
TopThe Traditional Economic Structure Of The Gulf Countries
The Gulf Cooperation Council (GCC) is a group of six oil exporting countries – namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. It was formed a regional intergovernmental political and economic union in 1981, with its ultimate aim to expand the economic ties between its members. In 2008 a common market was launched and discussions about the introduction of a single currency were started.
The six countries show similarities in terms of their economy and how they are governed. Specifically, their economies have largely been based in the Oil revenues. This was associated with large government expenditure, with particular focus in the construction and real estate industries. Following the Arab spring, these amounts of money were used to benefit the countries’ population, so again there was an increase in the public expenditure.
At the same time however, some of the economies, specifically the UAE and Qatar, have attempted to diversify their economies in more areas. They have done by adopting dedicated policies in specific areas. First of all they have attempted multinationals, in order for them to build their regional headquarters. Furthermore, they have tried to develop specific ‘’niches’’, in the aviation, tourism and education industries. As a result, Emirates contributes 10% of the UAE’s GDP, while at the same time tourism numbers have been growing with a steady pace the recent years. Concerning education, both the UAE and Qatar have formed partnerships with leading universities, attracting them to relocate to these emirates, while at the same time attracting very large numbers of international students.
In the recent years however, all of the GCC countries have tried to focus on their SME development. In order to do that they have developed long term plans and national policies with specific industry focus. As a result, there have been some SMEs that have been growing very rapidly in the recent years. A particular focus has been on technology and start ups. Specifically, there have been multiple attempts to engage in policies to promote education technology, aviation, oil and gas, and the finance industry, also known as fintech, as all of these industries have been the pillars of these economies. We analyze more in the fintech industry in the following part.