The Service Sector in the GCC Countries

Macroeconomic Theory of Sectors

According to macroeconomic sector theory, the economy isء divided into three main sectors:

1. Primary Sector – Involves the extraction of raw materials, including mining, forestry, oil exploration, agriculture, and fishing.
2. Secondary Sector – Involves the production and sale of goods, such as automobiles, furniture, and clothing.
3. Tertiary Sector (Service Sector) – Focuses on providing intangible services, such as entertainment, healthcare, transportation, hospitality, and dining.

As nations develop, their economies shift toward the service sector. For example, in the United States, services account for 85% of the total economy.

Saudi Arabia

The service sector is a major contributor to Saudi Arabia’s economy, encompassing wholesale and retail trade, hospitality, transportation, financial services, business services, and government services. Key statistics include:

• Service sector contribution to GDP: 48.2%
• Wholesale, retail, hotels, and restaurants: 10.8% of GDP
• Transport, storage, and communications: 6.6% of GDP
• Financial services, insurance, real estate, and business services: 6.4% of GDP
• Social and personal services: 2.5% of GDP
• Government services: 21.9% of GDP

Qatar

• Wholesale and retail trade sector value: 50,083 million Qatari riyals
• Active wholesale and retail businesses: 11,139 establishments
• Employees in the sector: 213,954 workers
• Total worker compensation in wholesale and retail: 11.3 billion Qatari riyals
• Hotels and restaurants: 2,396 establishments with 78,194 workers
• Worker compensation in hospitality: 2.95 billion Qatari riyals
• Mobile phone subscribers (postpaid): 976,015 users
• Mobile phone subscribers (prepaid): 2,941,556 users
• Newly paved roads (last year): 2,224 km
• New driving licenses issued (last year): 242,923 licenses
• Worker compensation in transport and communications: 24.3 billion Qatari riyals
• Total insurance policies issued: 715,897 policies
• Business service establishments: 4,973 businesses
• Employees in business services: 215,285 workers
• Worker compensation in business services: 15.35 billion Qatari riyals
• Employees in private social and personal services: 80,569 workers
• Worker compensation in private social and personal services: 6.13 billion Qatari riyals

Kuwait

• Wholesale and retail trade GDP contribution: 1,644.3 million Kuwaiti dinars
• Hotel and restaurant sector contribution: 418.6 million Kuwaiti dinars
• Transport, storage, and communications contribution: 2,554.5 million Kuwaiti dinars
• Total paved road area: 91,340,068 m²

United Arab Emirates (UAE)

Wholesale, retail, and vehicle repair: 12.3% of GDP (172.3 billion AED)

Transport and storage: 5.9% of GDP (82.5 billion AED)

Accommodation and food services: 2.3% of GDP (32.4 billion AED)

Information and communications: 2.9% of GDP (41.3 billion AED)

Financial services and insurance: 9.6% of GDP (134.8 billion AED)

Total insurance policies issued: 7,584,607 policies

Wholesale and retail trade employment share: 13% of total workforce

Transport and storage employment share: 6.2%

Accommodation and food services employment share: 5%

Oman

• Total GDP: 29.3 billion Omani rials
• Wholesale and retail trade contribution: 7% of GDP (2.06 billion OMR)
• Hotel and restaurant sector contribution: 1.1% of GDP (308.6 million OMR)
• Transport, storage, and communications contribution: 5.9% of GDP (1.72 billion OMR)

These figures highlight the growing importance of the service sector in the economies of GCC countries, making it a promising area for investment and development.