While the GCC region currently represents the most accomplished economic integration model in the Arab world, this region is still facing major challenges. Besides hydrocarbon dependence amid fluctuating global markets, GCC countries face the dilemma of the public/private sector dichotomy. The private sector remains underdeveloped despite significant progress in this field. Apart from occasional success stories in some Gulf countries, in particular the UAE and Bahrain, Gulf firms remain insignificant in export markets, with limited success in entering new markets or introducing new products. Not surprisingly, State-owned enterprises remain active in many strategic sectors, such as insurance and banking, petrochemicals, electricity, air transport, real estate, telecommunications, and postal services. While these companies are suggested to operate on the basis of commercial considerations, there is an apparent risk that they could deter foreign as well as local competition and investments. Such an assessment also should not neglect the emergence of new challenges coming along with the Covid-19 pandemic. The latter has demonstrated that even the most sophisticated companies and governments are extremely vulnerable to unanticipated shocks.