Stephen Anderson, chief strategy & technology officer, PwC Middle East, says governments in the region must adopt a coordinated policy that builds trust, reduces risk, and aligns with long-term national priorities.
He says efforts should include embedding AI responsibly across industries, accelerating climate adaptation and mitigation, investing in human capital, and fostering trust in both technology and institutions.
Read: The region is transforming and the world is watching
According to PwC’s latest report, ‘Value in Motion: The Middle East’s Time to Lead is Now’, there is a $232 billion gap between the region’s most optimistic and most constrained economic scenarios. What are the key differences between the ‘trust-based transformation’, ‘tense transition’, and ‘turbulent times’ futures outlined in the research?
The ‘Value in Motion’ report highlights three distinct futures for the Middle East, shaped by how the region, and the world, navigates AI adoption, climate action, and economic reinvention. In the trust-based transformation scenario, we see the highest growth potential — GDP reaching $4.68 trillion by 2035 — driven by effective collaboration, technology integration, and sustainability measures.
The tense transition scenario shows moderate progress, with GDP at $4.61 trillion, reflecting uneven advancements. Turbulent times is the most constrained future, where limited AI benefits and higher decarbonization costs bring GDP down to $4.45 trillion. The $232 billion gap between the best and worst case underscores how much is at stake.
To be clear, the benefits that could be derived from AI under the trust-based scenario amounts to a further 8.3 percent of GDP. The overall impact, however, is reduced as under a trust-based scenario decarbonization also leads to a 5.2 percent reduction in GDP due to certain stranded assets. As the lowest cost producer of solar power globally, there could be additional upside for the region in decarbonization.
Emerging opportunities in areas such as green fuels, green manufacturing, agritech, circular economy and renewable powered data centers are not fully captured in the model. A trust-based transformation represents a scenario where AI and climate solutions work in tandem — aligned with global interests — to drive widespread productivity growth and climate resilience. A tense transition implies that sustainability efforts are restrained, and technology adoption is more fragmented, less trusted.
Turbulent times assumes a fractured future — marked by polarizing technologies and suspended sustainability efforts. Rising geopolitical and economic instability could conspire to diminish trust in technology, limiting its economic benefits and accessibility. Heightened uncertainty also neglects sustainability measures at the cost of the future.
Which scenario does the region currently appear to be heading toward, and what signals support that trajectory?
The report doesn’t predict a fixed path but provides a framework to assess possible outcomes. What we’re seeing today — especially in areas like AI investment, renewable energy, and digital infrastructure — aligns with several elements of the trust-based transformation scenario. What actually happens in the future will depend on how effectively AI is harnessed and how well Middle Eastern economies navigate the energy transition and manage the economic costs of decarbonization.
Our research takes a ten-year view — recognizing that while today’s seismic geopolitical shifts are largely destabilizing, over time there is a potential for these disruptions to strengthen the momentum towards a more trust-based economic transition.
How realistic is achieving $4.68 trillion in GDP by 2035, and what are the critical enablers to get there?
Achieving $4.68 trillion is an ambitious but realistic goal — provided the region focuses on key enablers. That includes embedding AI responsibly across industries, accelerating climate adaptation and mitigation, investing in human capital, and fostering trust in both technology and institutions.
None of these elements work in isolation; it’s the interplay between them that creates the conditions for long-term, inclusive growth. AI’s economic potential is massive. And PwC estimates that if leveraged well, the Middle East would see an AI productivity boom amount to an additional 8.3 percentage points of growth between 2023 and 2035.
What role can AI play in enhancing resilience to climate challenges such as water scarcity and extreme heat? At the same time, what are the key risks tied to scaling AI infrastructure across the region?
AI offers enormous potential to improve climate resilience — from optimizing water management to enhancing early warning systems for extreme heat events. But scaling AI also brings challenges, particularly around energy consumption and the need to align technological expansion with decarbonization goals. The report reminds us that AI’s impact isn’t guaranteed; it depends on how well it’s integrated into broader strategies for sustainable growth.
Trust in AI among GCC CEOs is notably higher than the global average. How is this shaping the pace of innovation in the region, and what factors are driving the strong AI productivity gains? Additionally, how can these gains be scaled more broadly across sectors?
Trust in AI is a key differentiator for the region. Insights from PwC Middle East’s 28th annual CEO survey have indicated that half of GCC CEOs say they trust AI to a ‘large’ or ‘very large’ extent — ahead of just one-third of their global peers.
This confidence has translated into action. Over the past year alone, nearly 70 percent of regional CEOs who adopted GenAI reported increased time efficiency, and over half saw higher profitability — both significantly above global benchmarks. Looking ahead, over the next three years, AI — including GenAI — is set to become a core component of technology platforms, business processes and the development of new products and services in the region. This will create new opportunities to build, enhance and capture value.
What types of new institutions or governance models are needed to address emerging needs in areas like mobility, care, and AI regulation, and what policy incentives could further accelerate private sector investment in AI, clean energy, and resilient infrastructure?
Governments must adopt a coordinated policy approach that builds trust, reduces risk, and aligns with long-term national priorities. Establishing clear regulatory frameworks, particularly around the safe and ethical use of AI, can strengthen public confidence and lower the barriers to innovation.
Public–private partnerships play a critical role in scaling energy and digital infrastructure, enabling governments to de-risk major investments and fast-track delivery. Targeted incentives such as tax breaks, grants, and preferential procurement policies can further stimulate domestic innovation and infrastructure localization, particularly in high-impact areas like AI chips, data centers, and clean tech manufacturing.
To support this transformation, policies must also prioritize workforce development through investments in AI education, green skills, and digital literacy — ensuring a steady talent pipeline for future-ready industries. A trust-based, integrated approach to policy can unlock long-term growth, productivity, and climate resilience across the region.
If you could fast-forward to 2035, what indicators would you look for to determine whether the Middle East achieved the “trust-based transformation” scenario?
By 2035, we’d look for sustained productivity gains from AI, clear progress on climate and resilience metrics, diversified economic activity, and high levels of trust in both institutions and technology. Achieving the $4.68 trillion GDP milestone wouldn’t just be about the number — it would reflect the underlying transformation that made it possible.
