| Abstract: | Abstract Our paper shows that the deficient educational system and the large share of unskilled foreign workers in the Gulf countries are serious impediments to a successful implementation of the strategies of these countries to reduce their dependence on foreign technologies and to restructure their economies in order to make them less dependent on oil exports. A novel element in our analysis is that we emphasise the role of the deficient educational system as an important problem, next to the well-documented quandary of a high incidence of unskilled foreign workers in the workforce. We use new survey data, both at an establishment level and economy-wide, to provide evidence on how the poor educational facilities lead to a poor provision of training, low skill levels, serious skills mismatch and deficient transfer of knowledge. These inadequate facilities and the lack of incentives to improve them also lead to low R&D efforts to promote local technologies and hamper a restructuring of the economy. |
