With the major share of 76% of the total GDP of $14 trillion coming from the services sector in the US GDP, GCC analysts call for diversification of business basket and implementation of Chinese experience, according to an expert.
Observers and financial analysts specialized in financial, trade and business affairs in the Gulf region and the world are following up the effects of the issuance of GDP reports in the US, China, and Japan – the top economies in the world. These reports resulted in new readings towards making realistic and potential changes in the world economic order in the light of the outcomes of these reports. The potential changes can be made within seven to ten years.
The latest GDP achieved in the US amounted to 14.6 trillion dollars, around 4 trillion dollars over the China’s record that hit 10.9 trillion dollars. Japan came behind the US with about 10 trillion dollars, and behind China with about 6 trillion dollars, as it recorded 4.31 trillion dollars. Data of the relevant tables shows overwhelming Asian supremacy because of the nature of the sectors involved in drawing the final image of the table, especially the service sector. This sector has taken new paths in the light of the retreat of other sectors in its favour in both the US and Japan, unlike China, which has worked to strengthen the industrial sector.
The Gulf Cooperation Council (GCC) member states were concerned with the issue. Observers said that resorting to the option of strengthening the industrial sector and taking it up to the level of competition, or rehabilitating it to be the first tool in the development process under current favorable conditions will help achieve the aspired-after economic stability on the ground that the industrial sector is the main tributary of the treasury in the post-oil process.
“The US turned its economic strategy from an industrial country to a country of services. Around 76 per cent of the GDP comes through services. Japan adopted the same approach, as it relies on about 73.8 per cent of the service sector. Despite the magnitude of these figures, it seems that the results do not depend on the improvement of the human being as an axis of life other than the industrial sector which is seen as the axis of life and its growth factor,” Omar Al Juraifani, economist and financial expert, said.
“The revenues of the service sector are quick and rewarding, but they are not stable, as they serve business. So, if business is absent the sector will be paralyzed. The ignorance of the industrial sector, which is the most important and job generating sector, causes disruption in the economic equation, and this has happened in the euro zone, and happens now in the US. China realized the secret of the economic equation some time ago. It distributed the GNP basket among the service sector and the industrial sector almost equally. Industry in China accounted for about 46.9 per cent of the GDP, while services accounted for about 43 per cent. Thus, sectors were offset and integration between them was boosted in order to go ahead with development in peace and prosperity,” Al Juraifani added.
The latest statistics showed that the US GDP is approximately 14.6 trillion dollars, with the industrial sector’s contribution in the GDP reached 22.1 per cent; the agricultural sector’s share hit 1.1 per cent; while the services sector had the lion’s share of 76.8 per cent of the GDP. The rate of unemployment in the US reached about 9.6 per cent.
On the other hand, the Chinese GDP recorded 10.9 trillion US dollars. The industrial sector’s share in the GDP amounted to 46.9 per cent; the agricultural sector’s share hit 10.2 per cent; and the services sector’s share reached 43 per cent. Japan was ranked the third – as it is ranked among the world economies – by recording about 4.31 trillion US dollars. The industrial sector’s share in the GDP hit 24.9 per cent; the agricultural sector’s share amounted to 1.4 per cent; and the services sector’s share hit 73.8 per cent.
Observers say that the GCC countries’ making use of China’s experience requires them to rearrange the map of investment to support the sectors that represent a value added to the national economy. This also requires the GCC countries to work hard to support the industrial sector and the national production, given the wealth they have. That wealth can be used in establishing companies to serve that sector and encourage investors to invest with the government, thus striking a balance in the sectors and overcoming future concern.