A leading independent economist in the United Arab Emirates (UAE), said here Tuesday that the six oil-rich Gulf Cooperation Council (GCC) states need to improve governance and education for the youth.

Dr. Nasser Saidi, former chief economist of the Dubai International Financial Center, made the remarks while addressing the one-day Top CEO conference on the GCC challenges amid the oil slump.

He said the GCC countries have largely failed to diversify their sources of fiscal revenues despite it was high on the agenda "for decades."

"The GCC's biggest economy Saudi Arabia still derives 85 percent of its revenues from exporting oil. Only if the GCC states invest in human capital and alternatives, and sustainable industries they can manage the turnaround," said Saidi.

Earlier in the week, HSCB in Dubai said in a recent research that it expects the combined GCC fiscal deficit to reach 161 billion U.S. dollars by the end of the year, the highest since the union was founded in 1981, in case the price of oil will stay at around 40 dollars per barrel.

Every country can build roads and ports, but more important are human skills, he said, adding that younger generations in the GCC states need investment in education.

While the GCC has built up significant capacities in petrochemical production, Saidi said "these oil-related products did not manage to generate sufficient job opportunities for young local Gulf Arabs."

He commended efforts by the GCC and Saudi Arabia in particular to privatize state-owned companies, "but better governance must be on the agenda, property rights have to be protected to lure foreign investors who are willing to put their money into those state-owned firms," said Saidi.

Public private partnerships (PPPs) are also an efficient tool to manage the turnaround of the oil-dependent economies, "but so far only Dubai has the legal basis for PPPs. Kuwait passed a law on PPPs in 2014, but it has yet to be tested in the real economy," he noted.

On April 1, Saudi Deputy Crown Prince said the kingdom plans to set up a two-trillion dollar sovereign wealth fund to tackle the challenges of the post-oil era. "The region faces the biggest changes in 30 years," said Saidi.