By John Sfakianakis
Gaza, Iraq, Syria, Libya, Yemen, Egypt are all part of a region which has been consumed by anarchy, violence and destruction since 2011. But there is another part of the Middle East which is a striking contrast to all that: the Gulf. Many outsiders think it’s only a matter of time before the turmoil that has swept other Arab countries also overtakes the rulers of the Arab Gulf. They’ve been thinking that for close to a century.
The economies of the Gulf oil exporters are expanding. Over the last decade vast wealth has been accumulated which affords the Gulf countries a level of resilience that few in the emerging markets can match. Gulf currencies which are pegged to the greenback have offered additional stability. The elevated level of oil prices – at above $100 per barrel – is providing oil producing countries with a fiscal cushion. Thus, even as many other emerging markets try to find an equilibrium, Gulf countries will continue to do well and accumulate more reserves while sustaining high spending.
By Faisal Ghori, author of “The Final Frontier: The World’s Last Markets”
Saudi Arabia underwent a sea change last week, one largely unnoticed outside of the Gulf. The nation’s stock market regulator, the Capital Market Authority (CMA) announced that for the first time in the country’s history, foreign investors will be allowed to directly invest in its stock market as early as the “first half of 2015, God willing.”
In typically understated Saudi fashion, the announcement was made with no fanfare through the CMA’s website and the announcement, to date, is still available in Arabic only. But contrary to the announcement’s relative obscurity, its relevance and potential impact for global investors could not be larger.
Young Arabs are increasingly turning their backs on cushy public sector jobs in favour of working for private companies and starting their own businesses, a survey in 16 countries has found.
There has also been an erosion in optimism that the “Arab spring” uprisings in recent years against authoritarian governments across the region will translate into better lives for ordinary people, the survey found.
Transparency International’s latest report on emerging markets companies has slammed Chinese companies for their lax reporting standards, comparing them unfavourably with the relatively more open Indian corporate scene.
Faring little better than their Chinese counterparts were a handful of Middle Eastern companies included in the report.
Zamil Group, the family conglomerate headquartered in Al Khobar, the eastern province of Saudi Arabia, has seen it all, writes Camilla Hall.
Founded in the 1920s, its growth tells the tale of the big family businesses that dominate the otherwise government-led economy of Saudi Arabia.
Oil-rich Gulf countries have announced some of the world’s most ambitious renewable energy plans but analysts say the next year marks a big test to show whether these pledges will turn into contracts, writes Camilla Hall.
Both Saudi Arabia, which has announced a $109bn spending drive into solar energy, and Qatar, which aims to use a sustainable energy base to host the World Cup in 2022, have signalled they intend to launch tender contracts for solar energy projects.
Gulf states are intensifying their efforts to create jobs for nationals at the expense of expatriate workers as they face youth unemployment and pressure to prepare for a future less reliant on crude exports, writes Camilla Hall.
Kuwait has said it will reduce foreign workers by 100,000 a year, while hundreds of thousands of companies in Saudi Arabia faced a deadline last month to meet the proscribed quota of Saudi employees or risk having their licences removed.
Last year was supposed to represent the pivotal moment in which sukuk debt – Islamic versions of bonds – came into their own as a deep, mature and liquid source of funding.
Issuance data from January suggest the jury is still out.
Saudi Basic Industries Corp, Saudi Arabia’s biggest publicly-traded company, has a very non-Saudi problem: striking workers.
The Riyadh-based petrochemicals behemoth is facing the wrath of the labour unions – not at home in the kingdom where such groups are banned but at its Chemicals Geleen plant in the Netherlands.
Some might say it was a good day for Saudi Basic Industries Corp, the world’s biggest petrochemicals maker.
When it announced on Wednesday that third quarter net profits fell 23 per cent from a year ago its share price in Saudi Arabia rose 1.4 per cent. Clearly, the numbers weren’t as bad as had been expected in the light of plunging world prices for petrochemicals.
Hyundai Heavy Industries has won a $3.2bn contract from Saudi Electricity Company to build an oil-fired thermal power plant in Jeddah by 2017.
The turnkey project is important for both parties. Hyundai Heavy needs to make up for business lost in other sectors, notably shipping, and in other regions in the global economic downturn. And Saudi Arabia is using its oil revenues to boost the economy in an attempt to stave off any risk of the social unrest in surrounding Arab states.
“Don’t forget, revolutions are expensive”, says Dimitris Tsitsiragos. He should know: his responsibilities as a vice president at the International Finance Corporation include north Africa and the Middle East, not least the countries hit by the Arab Spring.
The IFC, the World Bank’s private sector arm, has, in the last five years, boosted its annual commitments to the region by nearly 50 per cent to over $2bn. But, Tsitsiragos says it’s not enough: without more private sector involvement, the region cannot generate the investments required to produce faster economic growth and more jobs.
After running into trouble with international sanctions in Iran, India’s top basmati rice exporter is focusing on Africa.
While Africa today consumes only small amounts of basmati, KRBL is seeing rapid growth – and it hopes to see much more in the coming years. As African consumers get richer, they are expected to develop a taste for more expensive imported foods.