GCC countries should rethink social services models to ease pressure on governments

Doha: There is an opportunity for GCC governments to evolve their social services models in the long-term. GCC governments can work with not-for-profit organisations (NFPs) and private-sector companies to supplement government offerings, moving social development beyond merely the government as a provider, according to Strategy&.

Strategy&, part of the PwC network, said in its report good intentions notwithstanding, the current model is unsustainable financially and operationally. For decades, the region’s oil economy has paid for the provision of government-backed social services delivered by the public sector. However, an extended period of low oil prices has negatively affected state finances, and many governments simply cannot meet all the needs of all their constituents, stated the report.

Also, moving social development beyond the government will create more innovative products and services that improve the well-being of customers.

Sami Zaki, Principal with Strategy & Middle East

Commenting on the findings of the report, Fadi Adra, partner with Strategy& Middle East, said: “Given the current economic climate, it is apparent that the social services model we have in the GCC is not sustainable; it’s time for governments in the region to engage further with NPF organizations, as well as the private sector to be able to provide for its citizens without burdening the GDP. While this will need concerted effort and change in regulations, it is, in fact achievable.”

“Demographic trends compound the challenge. Populations in the GCC region are aging, due to improved healthcare and increased longevity, putting a strain on government-funded services. The unemployment rate among nationals of these countries is often high, as countries continue to rely on expatriates for most skilled labor in the short to medium term,” further added Fadi Adra.

Sami Zaki, principal with Strategy& Middle East, added: “This model has been used successfully in several western countries and can in fact be replicated in the Middle East. We believe that change can be affected by easing regulations as the current NFP ecosystem is vastly underdeveloped in the region. Today, any GCC country has around 1,000 to 2,000 NFPs – contrast that with, say, a country like the United States which has about 1.5 million nonprofits, and the disparity is apparent.”