The Middle East conflict has swiftly exposed economic vulnerability in the region

Posted on 9 March 2026 • Arts and social sciences, Society and politics

At the end of 2025, the Gulf states received high praise for their economic resilience. According to reports by the World Bank and the World Economic Forum, the region was stable, modern and reliable, says Emilie Rutledge, Senior Lecturer in Economics at The Open University.

Now the six countries of the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – are watching on nervously. The economic damage done by what has become a regional conflict, bringing an abrupt loss of stability, could be huge.

Aside from Saddam Hussein’s foray into Kuwait in 1991, these six countries have successfully steered clear of conflict on their home turf over a long period. They avoided the revolutionary upheavals which affected Egypt (1952), Iraq, Syria and Iran (1979). They steered clear of any spillover from the long-running Israel-Palestine conflict.

The group was mostly unaffected by the war between Iran and Iraq. And aside from a short-lived uprising in Bahrain in 2011, the GCC emerged largely unscathed from the regional turmoil of the Arab Spring in 2010 which spread from Tunisia and and Egypt and led to violent instability which continues to this day in Libya, Yemen and Syria.

The GCC’s comparative stability underpins its attractiveness as a global hub for money and modernity. Success in luxury tourism has filled places such as Dubai and Abu Dhabi with five (and even a seven) star hotels. Only France has more Michelin-starred restaurants than the United Arab Emirates (UAE). There is cutting-edge technology in Qatar’s energy sector, and a vast AI campus in the UAE.

It is these kinds of projects which led the World Bank and the World Economic Forum to publish glowing reports on the region recently. Both organisations agreed in late 2025 that oil wealth was being wisely invested for the future.

Read the full article on The Conversation

Picture credit Lara Jameson on Pexels