Drying up Prosperity: How Freshwater Scarcity, Agricultural Land Use, and Urbanization Influence Sustainable Economic Performance in
GCC
Economies
Mohammad Ridwan, Zulfiquar Ali Antor, Afsana Akther, Samariddin Makhmudov, Md. Emran Hossain, Mohd Ziaur Rehman ABSTRACT
Freshwater scarcity poses a significant challenge to sustainable economic diversification in the arid Gulf Cooperation Council (GCC) countries. However, rigorous empirical evidence on its interplay with agricultural land use, urbanization, and long‐term growth remains limited. This study advances the literature by providing the first comprehensive assessment of how freshwater withdrawals, agricultural land use, energy consumption, population growth, trade openness, and urbanization jointly influence economic performance across the six GCC economies from 2000 to 2024. We employ second‐generation panel econometric techniques that explicitly account for cross‐sectional dependence and slope heterogeneity. The results demonstrate that freshwater withdrawals, energy consumption, trade openness, and urbanization robustly drive GDP per capita, while agricultural land expansion exerts a significant negative effect, reflecting persistent sectoral inefficiencies. Dumitrescu–Hurlin causality tests confirm unidirectional influences from freshwater withdrawals, agricultural land use, and urbanization toward growth, alongside asymmetric energy–growth linkages. These findings are robust across alternative estimators. The insights highlight the structural vulnerabilities of resource‐intensive development paths in water‐stressed settings and offer targeted policy guidance for improving water‐use efficiency, modernizing agriculture, and steering urbanization toward sustainable trajectories. These measures would strengthen long‐term economic resilience in the GCC and support the achievement of the Sustainable Development Goals (SDGs).