The economic and energy efficiencies of GCC states: A DEA approach

The six GCC states share similar economic, geographic and socio-cultural characteristics and also face with similar challenges in terms of energy perspective. This study plans to focus on the economic and energy efficiency of the six GCC states. In the process, the study ranks the GCC states in terms of their efficiency scores. These efficiencies are computed through Data Envelopment Analysis. The economic efficiency is calculated for all six GCC states. Capital and labor are the inputs and GDP is the output. In this survey, Saudi Arabia maintains the highest efficiency score of 0.94, closely followed by Qatar (0.92), Kuwait (0.89), Bahrain (0.83), Oman (0.81) and UAE (0.67). There is a huge gap between the economic efficiency scores of Saudi Arabia and UAE. The environmental efficiency scores are calculated using CO2 emissions as output and electric power consumption and energy as input. Again, the highest efficiency score is for Saudi Arabia (0.91) followed by Oman (0.87), Kuwait and Bahrain have a tie for the 3rd position with a score of 0.74. Finally, the laggards are UAE (0.65) and Qatar (0.62). Again, there is a huge gap between the best and the worst performers. The case of two countries is worth mentioning. Qatar is ranked second in terms of economic efficiency while it was ranked sixth in terms of economic efficiency. Oman was ranked fifth in terms of economic efficiency while it was ranked second in terms of environmental efficiency. Finally, an average of economic and environmental efficiency are taken to compute the composite index. Saudi Arabia has the first place followed by Oman, Kuwait, Bahrain, Qatar and UAE.