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The objective of the present paper is to explore the impact of the expansion in the foreign trade sector, which is dominated by oil, on the development of the GCC countries during the last fifteen years or so.

Specifically, the paper attempts to answer the following question; did the expansion in the oil sector lead to a structural transformation of the economies at? The main conclusions of the paper can be summarized as follows: there is no doubt that the expansion of the oil sector and the resulting increase in oil revenues was the cause of many economic and social developments in the region such as: high economic growth, establishment of the existing social and physical infrastructure, provision of social services, and the general increase in welfare. Yet, the economic structures of these countries are still distorted for the following reasons: First, the contribution of the manufacturing sector to the GDP of these countries is still insignificant. Second, oil is still the major determinant of all economic activities which subjects the development of the region to the adverse effects of the instability of oil revenues. Finally, the intra-regional trade of the GCC countries is still modest compared to other economic blocs. Consequently, the paper concludes with some policies that could strengthen the role of foreign trade as an engine of economic development in the GCC countries in the coming years.