Gulf Nations Must Develop Soft Infrastructure Sparkling office towers won’t draw business without the right policies. JULY 22, 2016 Author: MARK TOWNSEND Governments of the six-member Gulf Cooperation Council (GCC) are reacting to the collapse in oil prices in varying degrees, but none can return to the status quo ante of handouts and expensive state-backed subsidies. For years the GCC has lavished billions of dollars on projects, many of which turned out to be white elephants. Perhaps the most vivid example is the 59 mostly empty towers of King Abdullah Financial District in the Saudi Arabian capital, Riyadh. Reportedly costing $7.8 billion, with floor space of more than 3 million square meters, the project is bereft of the investment bankers it sought to attract. For many, the project symbolizes the latent disconnect between the Gulf’s tendency to spend billions on grandiose infrastructure yet overlook the equally important “soft” infrastructure of regulation, governance and human capital. There are, however, exceptions. The Dubai International Financial Centre, which Riyadh was trying to emulate, has managed to set itself apart from other regional competitors and is noted for the quality of its regulation and transparency embedded in a tax-free zone. Although GCC countries have begun…
