This research explores human resource development ‘HRD’ as a ‘nationalization strategy’ within developing contexts. A framework for managing nationalization challenges and issues is constructed based on a ‘development’ concept at a national level. The development concept researched in the study is examined and explored through HRD and capacity building. Nationalization as an HRD national strategy is of crucial importance in developing country contexts, and this is especially true for the Gulf Cooperation Council (GCC) countries in the Middle East. Nationalization strategies have been applied by GCC countries in the Middle East to increase national labour participation within the economy. Since the early 1980s, although nationalization strategies have been implemented through government authorities and ministries, the expatriate employment share remains at around 70 per cent with increasing national unemployment rates. The main aim of the research is to explore the role of nationalization programs within an HRD framework designed to build capacity from national human resources. Forces of resistance towards nationalization are addressed through a development framework that depends on human resource development and capacity building. Nationalization challenges are examined within developing contexts along with HRD theories presenting an intersection that positions ‘nationalization’ within HRD literature. Addressing nationalization issues through a ‘qualitative’ approach, distinct from quantitative measures such as quotas, proves to be a necessity for transitioning national labour towards a diversified economy in the GCC. The framework presented to address nationalization in the GCC was explored at the individual, organizational and national levels, hence presenting the nationalization challenges faced by the main executors of nationalization policies. The research findings reveal a strong correlation between the real practice of nationalization and HRD theories revealing the intersection between key concepts. The research findings demonstrate the significance of the intersection of nationalization and HRD, thus positioning nationalization within the HRD literature. The research findings reveal other ‘qualitative’ factors necessary to ensure long-term economic returns. The relevant areas include preparation of HRD professionals, coordination among entities, balancing supply and demand for labour, creating desired private sectors, education and culture. Considering retention strategies within nationalization indicates to be a crucial necessity to avoid lost investments in nationalization efforts. An examination of the role of career development in private sector organizations in Bahrain for managing and retaining local talents within nationalization initiatives reveals the importance of considering monetary rewards and creating suitable nationalized sectors that are attractive to nationals. The research examination of change management processes within nationalization in Bahrain provides strong evidence of the importance of considering qualitative approaches for developing economic sectors through national human resource interventions by embedding capacity building processes that can create long-term economic sustainable benefits within the economy. Therefore, the research findings provide a nationalization framework that takes a holistic approach by revealing findings at the individual, organizational and national levels that are essential to consider for increasing national human resources participation in developing economies such as the GCC countries where resistance towards nationalization persists.