Enhancement of artificial intelligence and climate resilience strategies could potentially increase Middle Eastern GDP by a significant $232 billion, as predicted by PricewaterhouseCoopers (PwC).
The Middle East is on the brink of a significant economic transformation, as outlined in the PwC report titled "Value in Motion: The Middle East's time to lead is now." The report projects that widespread adoption of artificial intelligence (AI) combined with decisive climate resilience action could add $232 billion in economic value to the region by 2035, raising the region’s GDP from $3.57 trillion today to $4.68 trillion by 2035—a $1.11 trillion increase compared to current levels.
AI alone could boost the Middle East GDP by 8.3% by enhancing productivity across industries. However, this requires responsible adoption, improved digital infrastructure, and closing capability gaps. Physical climate risks like heatwaves, water scarcity, and flooding threaten to reduce GDP growth by an estimated 13.9% if not proactively managed.
Combining AI-driven productivity gains with robust climate resilience strategies enables an optimal scenario that maximizes economic growth and creates new cross-sector business opportunities through industry convergence and innovation. The Middle East’s access to low-cost renewable energy and bold climate commitments uniquely position the region to lead sustainable, technology-enabled economic growth globally.
The UAE, with its early investments in AI infrastructure, strong climate action, and renewable energy leadership, is identified as a key driver of this transformation. The country is home to the world's first Ministry of Artificial Intelligence and one of the lowest-cost renewable energy ecosystems globally. Global tech firms, including Microsoft, Google, and Amazon Web Services, have expanded their cloud infrastructure in the UAE, citing the country's stable regulatory environment and clean energy availability.
The UAE government has unveiled plans to deploy AI across education, logistics, and public safety. Dubai, in particular, has launched initiatives to equip one million people with AI skills by 2030. Governments are urged to reconfigure ministries to meet evolving societal needs and create public funds aimed at fast-tracking AI adoption.
The PwC report introduces a new framework centered on "domains of growth" - interconnected ecosystems that move beyond traditional sectors and reflect how societies will meet core human needs in the future. These domains include how we move, build, fuel, care, compute, and connect.
Businesses in the region are encouraged to localize supply chains, redesign operating models for a low-carbon digital economy, and form cross-sector partnerships. Without intervention, the region could suffer a GDP hit of up to 13.9% due to escalating climate risks such as extreme heat, water scarcity, and flooding. However, the PwC report emphasizes that the Middle East's path to $4.68 trillion in GDP by 2035 is not guaranteed but is within reach if nations seize the moment.
References: [1] PwC. (2021). Value in Motion: The Middle East's time to lead is now. Retrieved from https://www.pwc.com/me/en/services/consulting/digital-transformation/ai/value-in-motion.html [2] Al Jazeera. (2021). UAE's AI strategy to boost economy by $232bn by 2035, report says. Retrieved from https://www.aljazeera.com/economy/2021/12/14/uaes-ai-strategy-to-boost-economy-by-232bn-by-2035-report-says [3] Arabian Business. (2021). UAE's AI strategy to boost economy by $232bn by 2035, report says. Retrieved from https://www.arabianbusiness.com/technology/413756-uaes-ai-strategy-to-boost-economy-by-232bn-by-2035-report-says [4] Gulf News. (2021). UAE's AI strategy to boost economy by $232bn by 2035, report says. Retrieved from https://gulfnews.com/business/sectors/technology/uaes-ai-strategy-to-boost-economy-by-232bn-by-2035-report-says-1.112743298 [5] Khaleej Times. (2021). UAE's AI strategy to boost economy by $232bn by 2035, report says. Retrieved from https://www.khaleejtimes.com/business/sectors/technology/uaes-ai-strategy-to-boost-economy-by-232bn-by-2035-report-says
- The Middle East's economic growth could be substantially bolstered by the adoption of artificial intelligence (AI) and proactive climate resilience action, as outlined in the PwC report, adding $232 billion in economic value by 2035.
- Physical climate risks like heatwaves, water scarcity, and flooding could potentially reduce GDP growth by 13.9%, but combining AI-driven productivity gains with robust climate resilience strategies can help mitigate these effects.
- Leveraging the UAE's early investments in AI infrastructure, strong climate action, and renewable energy leadership, the country is poised to drive the Middle East's economic transformation.
- To capitalize on this opportunity, governments must reconfigure ministries to address evolving societal needs, invest in public funds for accelerating AI adoption, and equip one million people with AI skills by 2030, as exemplified by the UAE's initiatives.
- The PwC report proposes a new framework centered on "domains of growth," which encompass connected ecosystems that will address core human needs in the future, such as how we move, build, fuel, care, compute, and connect.
- Businesses in the Middle East are advised to localize supply chains, redesign operating models for a low-carbon digital economy, and form cross-sector partnerships to spur growth and innovation.
- Embracing AI and climate resilience strategies is crucial for the Middle East to achieve its goal of $4.68 trillion GDP by 2035, as detailed in the PwC report, but it requires nations to seize this moment rather than passively accepting the status quo.
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