New GOIC alliance aimed at building capacity on trade, FDI & globalization measurement for GCC

Signing the MOU, was H.E. Dr. Ahmed Khalil Al Mutawa, GOIC Secretary General, and Ms. Jennifer M. Powell, ISTIA Executive Director.

This is a strategic partnership between GOIC and ISTIA. It is aimed at assisting the GCC countries towards building capacity to measure globalization data such as trade-in-services - crucial information for World Trade Organization (WTO) negotiations - as well as foreign direct investment (FDI), operations of FDI-related enterprises, cross-border joint-ventures (JV), and transfers of technology via FDI or strategic alliances. In the context of a more global and integrated world economy, such information is crucial for both GCC governments, as well as the private sector.

Developing such information database, will give the GCC countries the tools necessary to successfully measure, understand and plan strategically for requirements of a more global and integrated world economy. GCC governments require this new globalization dataset to better negotiate in the WTO under the General Agreement on Trade in Services (GATS), as well as in other bilateral trade and investment negotiations. Capacity building is needed by high-level government officials and policymakers of GCC member states to bridge the gap between the new globalisation data framework and their decision-making activities.

In the new millennium, services are instrumental components of industrial activities; previously, services and industrial business activities were viewed as distinct and separate. The modern global economy views services and industrial activity as symbiotic and integrated for two principal reasons. Firstly, because businesses require efficient services sectors such as transportation and communications for domestic or import/export commercial operations. Secondly, modern business models no longer view companies as strictly services-only or industrial-only.

In the 21st century, many companies which used to be famous for only selling goods, now also sell services as separate products; one example of this is Hewlett Packard, a former hardware-only firm which now sells consulting, business integration and other services as stand-alone products. Services also make up a significant share of the GDP for all countries in the world; developed country GDP is usually 70-85% services-driven, while developing country GDP figures are generally 35-70% services-based.

Foreign direct investment (FDI) is a part of the WTO GATS agreement, and in this light, measurement of FDI on a basis which allows sectoral and partner country identification is of crucial importance. Successful ISTIA collaboration seeks to facilitate the public and private sectors of GCC countries to operate in a manner most proactive and strategic in relation to globalization affairs.