| Summary: | The economies of the Gulf Cooperation Council (GCC) grew several folds over the past decades, making impressive improvements in key development indicators, supported by massive investments in extractive industries. Real gross domestic product (GDP) annual growth reached 5.1 percent during the 2000-2012 period, with hydrocarbons accounting for almost 90 percent of revenues and 80 percent of exports during the same period. Economic growth has not translated into sufficient employment creation and optimal job outcomes for GCC nationals outside of the natural resources industry. Reforming public sector employment to increase the productivity and meritocracy of jobs for GCC citizens entails three key recommendations. First, while public sector pay should remain competitive to attract highly skilled workers, it needs to correspond with actual productivity levels. Second, introducing a meritocratic system and formal performance management tools in the public sector will increase competition among public sector employees and potentially increase productivity. Finally, in some of the larger GCC economies, rationalization of recruitment of citizens into the public sector may be necessary. This note elaborates on this line of reasoning and highlights how the World Bank can assist GCC governments in achieving their stated objectives of increasing citizens' access to more and productive employment and supporting the shift towards a knowledge-based economy
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