Oil, human capital and diversification: the challenge of transition in the UAE and the Arab Gulf States

This research studies the labour and human capital dimensions of diversification and structural change in oil economies, with a focus on the case of the UAE and the A rab G ulf S tates. It examines how oil‐driven development in the G ulf has resulted in entrenched patterns of employment and migration, which have forestalled efforts by these countries to transition into more sustainable, post‐oil economies. Utilising a mixed methods approach based on secondary data analysis and a survey conducted with 300 firms, it studies how these distortions have evolved as the region has embarked on a number of major diversification efforts over the past four decades. Oil wealth has provided G ulf economies with the capital to create competitive new sources of economic growth, but the challenge remains sustainability: reproducing the labour force in non‐oil industries locally.