Abstract:The main objective of this study is to investigate the causal relationship between tourism development and economic growth in Gulf Cooperation Council (GCC) countries in a multivariate model, using panel data for the period 1995-2012. The study adopts a panel Granger causality analysis approach to assess the contribution of tourism to economic growth in GCC countries as a whole, and in each individual country. In the case of GCC countries as a whole, the results show a one-way Granger causality, from economic growth to tourism growth. Furthermore, Kuwait, Saudi Arabia, Qatar, and the United Arab Emirates follow the path of economy-driven tourism growth, as hypothesized. The reverse hypothesis (i.e., tourism-led growth hypothesis) holds true for Bahrain, while there is no causal relationship between tourism and economic growth in the case of Oman.

Despite all the efforts by Saudi Arabia at all levels to promote balanced regional-economic development across national space, the apparent widening development gap at both inter-and-intra-regional levels still persists. The distribution of population, employment and socio-economic activities in few Saudi regions during the last forty years is also remarkable. The Saudi Arabia, however, realized that unless the trends in polarization of socio-economic opportunities in specific regions and interregional disparities are rectified, Saudi national development cannot be sustained. This research is set to investigate development disparities among regions in Saudi Arabia regarding economic structures and changes over the period of 1992 to 2010. Specifically, this research study attempts to identify the potentialities of economic development in each region of Saudi Arabia and their explicit and implicit competitive advantages to achieve balanced economic development among Saudi regions.