The Changing Pattern in International Trade and Capital Flows of the GCC Countries in Comparison with Other Oil-Exporting Countries

Journal of Knowledge Management, Economics and Information Technology, Vol. I, Issue 7, December 2011

29 Pages Posted: 12 May 2010 Last revised: 19 Dec 2011

Date Written: December 19, 2011

Abstract

During the past decade the GCC countries have achieved a remarkably high degree of trade and financial integration in the world economy. Before the global crisis began, they invested their abundant oil income which resulted from high energy prices and high world demand, in return abundantly abroad. Thanks to policies that are geared towards opening up borders, the GCC countries have imparted a significant stimulus to the world economy, to a much greater extent than other oil exporting countries in similar conditions. The development of the gross capital flows in view of the recent global crisis and their composition are the main focus of this study. It aims at providing a comprehensive overview of the pattern of the current and capital account of the balance of payments of the group of six GCC countries, and benchmarks this group with the other OPEC countries that have a comparable size of natural resources. Aspects of globalization, trade and financial integration, such as the dependence on oil, “Dutch disease”, regional integration, foreign direct investment and cross-border assets and loans are addressed. The impact of the crisis is found to have reverted international capital flows of the GCC, in particular cross-border bank loans and deposits.

Keywords: Oil-Exporting Countries, GCC, Trade, Financial, Integration, Capital Flows

JEL Classification: F15, F32, F41

Suggested Citation

Peeters, Marga, The Changing Pattern in International Trade and Capital Flows of the GCC Countries in Comparison with Other Oil-Exporting Countries (December 19, 2011). Journal of Knowledge Management, Economics and Information Technology, Vol. I, Issue 7, December 2011, Available at SSRN: https://ssrn.com/abstract=1605248 or http://dx.doi.org/10.2139/ssrn.1605248

Marga Peeters (Contact Author)

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

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