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One of the most worrying questions in the GCC today is: "Will the current boom last? How can its benefits be sustained?"
These key questions vex policymakers and economists alike.
Since there are no definite answers, issues such as insulating the economy from wide oil price fluctuations and ensuring diversification have once again become core issues for oil exporting countries.
To tackle oil price volatility and the unpredictability of oil revenues, some oil exporting countries, such as Algeria, Oman and Qatar, have established special funds designed to stabilise budgetary revenue and thus, budgetary expenditure.
When oil revenues are high, some part of the earnings is put in a 'stabilisation fund,' which can be used later at times of shortfall.
However, it has been observed that the effectiveness of such funds depends on the transparency of their objectives, rules, management and operations as well as on the extent to which they are shielded from political manipulation, a questionable issue in Arab countries, notes the World Bank.
But for the time being, the current oil boom has been forecast to continue for the full first decade of the 21st century.
How well would the GCC react to such a sustained period of boom?
When the performance records for the GCC economies over the past three decades are compared to those for the economies of Asia and Latin America, the results are not very encouraging.
The GCC has already gone through two previous booms when pitfalls have overshadowed achievements.
This time over, along with the opportunities there are enough challenges. These challenges are not confined to the GCC alone; they extend to the wider Arab world.
For example, to provide employment opportunities for some 100 million new entrants to the labour force over the next 20 years, Arab economies will need to sustain its current performance and grow annually by six to seven per cent in real terms - double the rate observed for the past 15 years.
To meet this challenge and others, they need to move from oil-dominated to more diversified economies, to focus more on private sector-led development and convert their closed economies to more open ones.
"Even in boom times, the key challenge to GCC governments is to maintain the momentum of economic activities thereby creating additional job opportunities," says Central Bank of Bahrain governor Rasheed Al Maraj.
"This means encouraging economic diversity, and increasing the private sector's role in the economy. And hopefully, with increased diversity and a larger private sector, there will be less dependence on oil income as a catalyst for growth in the future.
"The way to achieve a more efficient and competitive private sector is not by protectionism but to increase competition and open up the domestic economies further," he says.
Bahrain is one country which had understood the importance of diversifying the economy and reducing dependence on oil as early as the 1970s.
Since then Bahrain adopted a number of significant initiatives to develop the financial sector which has made the kingdom the centre of choice for many international and regional financial institutions.
The country also undertook initiatives in other sectors focusing on trade liberalisation and less restriction to foreign investment.
Making such readjustments will require a new set of innovative fiscal, industrial, trade and labour policies.
The oil and gas sector will be central to the above adjustments because of its contribution to GDP, investment, external balances, and overall growth.
The estimated $183 billion in investments to be made in the oil and gas chains of Arab countries over the next five years, while adding to the growth of the oil and gas sector, should also contribute to the growth of other sectors, thus enhancing diversification.
