GCC Economies Witnessing a Golden Age of Progress and Growth

Regional economies are present process a constructive cycle of enhancing competitiveness and progress amid greater oil revenues and financial reforms, Majid Jafar tells Davos  
Area’s digital financial system will attain $130 billion by finish of decade, whereas regional sovereign wealth funds are managing $4 trillion, a 3rd of the worldwide complete
International Direct Funding in GCC reaches 5% of GDP, highest of any area
Complete contract awards of US$205 billion in 2023
Majid Jafar: “We’re having fun with the fruits of visionary management and a long time of stability within the area.”

Gulf Cooperation Council (GCC) economies are experiencing a golden age of progress and improvement supported by a constructive cycle of reform, greater oil revenues, and falling rates of interest, Majid Jafar, CEO of Crescent Petroleum, informed an viewers of enterprise leaders, policymakers, and NGOs on the World Financial Discussion board in Davos. Lengthy-term infrastructure improvement and funding programmes, coupled with essential reforms throughout all financial sectors, have created fertile floor for wholesome, sustainable progress that’s being accelerated by enhancing financial situations, with regional GDP progress anticipated to be near 4% within the coming years.

“It is a golden age for the GCC because the area’s stability, infrastructure constructing, and funding flows increase its international affect and its financial system simply as a brand new era of well-educated, formidable younger individuals enters the workforce, promising to proceed on this path,” Jafar informed the viewers talking on a panel on the World Financial Discussion board annual assembly in Davos, Switzerland. “We’re having fun with the fruits of visionary management and a long time of stability within the area,” he added.

Jafar commented on the panel “Gulf Economies: All In”, which mentioned the financial outlook for GCC economies. Additionally talking on the panel had been H.E. Ahmed Jassim Al-Zaabi, Chairman of the Abu Dhabi Division of Financial Growth, H.E. Khalid Al-Falih, Minister of Funding of Saudi Arabia, H.E. Ali Ahmed Al-Kuwari, Minister of Finance of Qatar, H.E. Sheikh Salman bin Khalifa Al Khalifa, Minister of Finance and Nationwide Economic system of Bahrain, and Mrs. Henadi Al-Saleh, Chairman of the Board of Agility.

He stated that GCC economies are displaying sturdy and sustained progress regardless of international uncertainties and regional turmoil, having fun with relative stability as a result of structural reforms, fiscal accountability, and impressive financial diversification plans. 

Whereas the oil and gasoline sector proceed to make an vital contribution to the area’s financial system, rising non-oil sectors and exports will drive progress within the GCC in 2024, Jafar stated, supported primarily by continued funding in tourism and expertise sectors. Funding into AI and different cutting-edge expertise, mixed with supporting legal guidelines and insurance policies enhancing the enterprise atmosphere, has helped develop the digital financial system to $38 billion in 2023 and is predicted to succeed in greater than $140 billion by 2031. The area’s sovereign wealth funds at present handle $4 trillion, a 3rd of the worldwide complete and a rise of 70% over the previous 5 years.

Over the previous decade, funding in infrastructure has yielded nuclear energy era within the UAE and new rail, pipeline, and highway networks which might be shifting items extra effectively and promise to make the area a nexus of worldwide transport. Electrical grid interconnections amongst GCC states have diminished electrical energy prices and elevated reliability. Complete contract awards in 2023 reached US$205 billion, Jafar stated.

In the meantime, formidable reform agendas reminiscent of Imaginative and prescient 2030 in Saudi Arabia, “We the UAE 2031”, Oman Imaginative and prescient 2040, and the Qatar Nationwide Imaginative and prescient 2030 have made appreciable progress, significantly within the social and enterprise arenas, coupled with efforts to boost fiscal sustainability and resilience, strategic industries, and digital and inexperienced infrastructure.

In keeping with the IMF, GCC international locations have attracted extra FDI as a share of GDP than another area. Greater than $26 billion in FDI poured into the area in 2022, greater than 5% of GDP. This share has solely grown additional with regulatory reforms permitting 100 per cent international possession of onshore firms and adjustments to Public-Non-public Partnerships (PPP) laws to encourage extra in depth personal sector participation. Prior to now decade, GCC international locations have turn into extra central to the worldwide FDI community, pushed by the UAE, Saudi Arabia, and, to some extent, Kuwait.

In the meantime, distinguished examples of management of initiatives like COP28 and profitable area mission programmes have allowed the GCC to seize the worldwide creativeness, offering regional management at a difficult time for the remainder of the MENA area, Jafar stated.

Jafar stated that enabling, empowering, and enhancing the personal sector can be important to sustaining progress ranges and creating extra job alternatives for the younger workforce. Accelerating innovation in monetary regulation can even deepen capital markets, making the area a centre of improvement of blockchain and fintech.

Non-public sector job creation can also be important for guaranteeing younger individuals’s profession improvement and enabling a productive financial system. Current efforts and mandates for Emiratisation and Saudisation have considerably elevated the variety of younger residents, significantly girls, in personal firms. And a brand new era of formidable, well-educated younger women and men graduating from universities will play an vital function in driving progress.

“These are vital benefits, and as a area, we should additionally embrace new applied sciences whereas we put money into getting ready for a brand new period of labor and allow younger individuals to succeed in their full potential,” Jafar stated.

The World Financial Discussion board annual assembly takes place on 16-20 January 2024 in Davos, Switzerland. The Annual Assembly convenes leaders from authorities, enterprise, and civil society to deal with the state of the world and focus on priorities for the 12 months forward. It is going to present a platform to interact in constructive, forward-looking dialogues and assist discover options by means of public-private cooperation.