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The last few years have seen both the rise and the decline of oil prices in the GCC countries. Oil plays an essential role not only in the economic but also in the social development of these states. In such a setup, every facet of the economy appears overly reliant on oil prices. In the recent past, the declining oil prices have caused significant challenges such as stagnated economic growth and weak economies. On the other hand, high oil prices have also had numerous advantages, especially in the art industry. Before 2015, GCC countries had projected their economies to grow at the rate of 3.7 % annually (Hudson & Kirk, 2014). This growth would be attributed to the rise in the world’s oil prices. Additionally, it would significantly depend on economic diversification. It is exactly what has seen GCC countries shift their focus to other sectors such as art. Lately, the Middle East has witnessed a powerful boom in the art industry (Papadakis, 2016). In this aspect, the study focuses on how the increase of the oil prices changed the value of art in the GCC countries. Furthermore, the study looks at how the recent rise of the GCC market helped increase diversification and stabilisation of the local economies.
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Increase of the Oil Prices and the Change in the Value of Art
Economic performance in many GCC countries is dependent on oil. In this case, an increase in the oil prices affects almost every sector of the economy. Though 2014 and 2015 saw a huge drop in oil prices, 2016 and 2017, on the other hand, have witnessed a reverse of the same. The rebound has been characterised by a rise in oil prices. The increase in oil prices has also led to a significant change in the value of art. For a long time, art had not been considered a remarkable part of the economy in the GCC countries. However, economic diversification has seen many GCC states move their focus to other fields such as art. It, therefore, explains why art has gained considerable significance in 2016 and 2017. The diversification came at a time when GCC countries were looking for resilience strategies due to the unstable oil prices. In this regard, many states started working towards the strengthening of other sectors that had earlier been abandoned. One of these areas was art (Erskine et al., 2016). However, economic diversification was the result of the decline in oil prices and not the increase of the same.
Rise in the Interest of Investing in GCC Countries and the Post-Oil Economy
The recent years have witnessed an increased interest in investing in the Middle East by many European and Asian countries. This popularity has been evident specifically in the UAE and Saudi Arabia. These two countries have undergone a weighty economic transformation in the last two years. This change was caused by the continuous economic diversification in the region. The shift has also resulted from the high profits that these countries received from the sale of oil. Consequently, they have built massive economies that are attracting investors from all over the globe (Boughanmi, 2015).
Recently, many GCC countries, especially the UAE and Saudi Arabia, have made great progress in developing the creative art industry. This extensive advancement in the field has come at a time when oil prices have been on the rise. In this regard, the economic boost resulting from increased oil prices has facilitated economic diversification. On the other hand, the development of creative arts started when many GCC countries realised that depending on oil and gas alone was dangerous for the economy. These changes have mainly been evident in the areas of media and entertainment, design, fashion, luxury, and pure art. The GCC countries are investing a lot of cash in architecture, design, and interiors. These art projects have attracted not only internal investors but also the multinational ones. The art business is estimated to produce over 40 billion USD this year. With this kind of returns, the local businesses are likely to thrive considerably (Alkhareif & Barnett, 2014).
Many GCC countries have created strategic agendas in an attempt to develop and market artwork. For example, the UAE government has started various incentivised initiatives such as Dubai Design District, the Saadiyat Cultural District, Fashion Council, and Dubai Art Week among others (Papadakis, 2016). These efforts are aimed at promoting art as well as marketing it. Other countries, such as Saudi Arabia, have had similar art-marketing initiatives. These actions have opened the Middle East to numerous opportunities, especially from the international communities. With various art-focused initiatives put in place, many GCC countries have become the cornerstones of the Middle Eastern art community.
GCC Art Market
Contemporary art has become a common word in many GCC countries, which are considered to be the post-oil economies. In the recent years, the Middle East has seen numerous rising stars such as Hassan Hajajj, Aziz Al Mudhaf, and Margaux Alix Gardet among others (Erskine et al., 2016). The development of art in many GCC countries is attributed to globalisation and economic changes resulting from immense wealth accumulated from the sale of oil. Many governments are holding numerous exhibitions in a move aimed at allowing local artists to showcase their work (Papadakis, 2016). In this case, contemporary art trade has been on the rise in many GCC countries. The business involves many players such as artists themselves, brokers, and producers of the artwork. The use of new techniques and methods in contemporary art has increased the value of art materials in the Gulf countries. Today, art in many of such states is not motivated by the admiration of artwork but by investment opportunities that come along with it. Massive investments from Europe and Asia have been witnessed, especially in the UAE and Saudi Arabia. Art is becoming less of a cultural aspect and more of financial opportunity in the Gulf region. Countries such as the USA and the UK have developed auction houses for art materials from the Gulf countries. In this context, art has become a major business aspect in many GCC nations (Ramady, 2016).
Major Social and Economic Changes Resulting from the Recent Boom of the Art Market
The recent immense appreciation of artwork in the art market has seen a significant economic diversification in the Gulf Cooperation Council countries. The last few years have witnessed a major fluctuation of oil prices. As a result, many states have shifted their focus to alternative income generating activities, one of them being art. Oil price rise and demand fluctuation caused a considerable number of inhabitants of the GCC countries to lose their jobs (Boughanmi, 2015). In this context, art has been given priority in the economic, social, and political agenda. Consequently, many people have turned to art, thus making it a remarkable part of their social existence, as well as a reliable source of income.
The Demand for Middle Eastern Art and the Future of GCC economies
Artistic works from the Middle East have gained international recognition in the past several years. Besides oil, gold, and real estate investments, many people are now looking at art as the next big opportunity. The unique nature of the Middle Eastern art makes it more attractive than what many people are used to. The art from GCC countries is firmly rooted in the Muslim culture. It entails numerous art designs that attract investors across the globe. Additionally, the Middle Eastern artists are known for their creative background, which is the reason why art is appreciating year in year out. With this type of trend, there is the likelihood of creating a more diversified economy in many GCC countries. Their current status is considered to be the post-oil economy, given the significant shift from oil and gas monopoly (Faris, 2016).
Positive and Negative Implications
The current appreciation of art among the GCC countries has led to the realisation of economic diversification. This achievement has seen these states make significant strides in economic development, even when oil prices fluctuate. It has, furthermore, created jobs for many ordinary people. Additionally, art has exposed GCC countries to the outside world as it has facilitated numerous trading activities (Ramady, 2016). However, the adoption of art as an essential economic activity has exposed GCC countries to many anti-social evils that are unacceptable in many Muslim economies. Furthermore, the influx of artists and businesspeople has significantly diluted the Muslim culture. Finally, art has ceased to be an integral part of the community social setup and has become a commercial activity.
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Arab Uprisings and Globalisation of Arab Art
The numerous Arab uprisings in many GCC countries have played an essential role in globalising the Arab art market. These revolutions come as movements that seek change from the current ruling strategy. These uprisings have played a prominent role in creating democratic and accountable governments where dictatorship was previously the order of the day. This accountability and democracy have opened up many Middle Eastern countries for business. Additionally, this turmoil has created an enabling environment for multinational companies (Alkhareif & Barnett, 2014). This exposure has been significant in creating a globalised Arab market, where art has gained significance.
The value of art in the GCC countries has been appreciating in the past few years. This rise is partly connected to the increased oil prices and fluctuating oil demand. Consequently, GCC countries have become noteworthy business hubs for artwork. The adoption and recognition of art have also led to economic diversification in economies that have witnessed decades of oil monopoly. This change has hugely opened GCC countries for new investments, especially in the art sector. The globalisation of the art market has further been attributed to numerous Arab uprisings that have helped in the creation of accountable democratic governments. However, the globalisation of Arab art has also come with a considerable share of challenges.