Bulent Gökay, Keele University elaborates on how Turkey tries to keep wheels of economy turning despite worsening coronavirus crisis. It, contrary to its neighbours, would not go down the same way. Read on to find out why.
Turkey confirmed its first case of the new coronavirus on March 11, but since then the speed of its infection rate has surpassed that of many other countries with cases doubling every two days. On April 2, Turkey had more than 15,000 confirmed cases and 277 deaths from complications related to the coronavirus, according to data collated by John Hopkins University.
The Turkish government has called for people to stay at home and self-isolate. Mass disinfection has been carried out in all public spaces in cities. To encourage residents to stay at home, all parks, picnic areas and shorelines are closed to pedestrians.
Some airports are closed and all international flights to and from Turkey were banned on March 27. All schools, universities, cafes, restaurants, and mass praying in mosques and other praying spaces has been suspended, and all sporting activities postponed indefinitely.
Manufacturing remains open
Many small businesses in the service sector are closed, and many companies in banking, insurance and R&D have switched to working from home. But in many industrial sectors, such as metal, textile, mining and construction, millions of workers are still forced to go to work or face losing their jobs. In Istanbul, where more than a quarter of Turkey’s GDP is produced, the public transport system still carries over a million people daily.
Recep Tayyip Erdoğan, Turkey’s president, has openly opposed a total lockdown, arguing a stay-at-home order would halt all economic activity. On March 30, he said continuing production and exports was the country’s top priority and that Turkey must keep its “wheels turning”.
But in the short term, many of Turkey’s export markets for minerals, textiles and food, such as Germany, China, Italy, Spain, Iran and Iraq, are already closed due to the virus. This has led to enormous surpluses piling up in warehouses. Even where there are overseas customers, getting the goods delivered has proven difficult. The process of sanitising and disinfecting the trucks and testing the drivers before they travel takes many extra hours, sometime days, after waiting in long lines.
Still, Erdogan’s statements give the impression that he sees this pandemic not only as a serious crisis, but also as an opportunity for Turkish manufacturers. The hope is that, after the Chinese shutdown, European producers which depend on Chinese companies for a range of semi-finished products may consider Turkey as an alternative supplier in the longer term. That’s why the government is still allowing millions of workers to go to factories, mines and construction sites despite the huge health risk.
A bruised economy
The Turkish government announced a 100 billion lira (£12 billion) stimulus package on March 18. It included tax postponement and subsidies directed at domestic consumption, such as reducing VAT on certain items and suspension of national insurance payments in many sectors for six months. But this is an insignificant sum for an economy as big as Turkey’s.
Most of the support will go to medium and large companies that were forced to close, and only a very tiny amount to individual workers. In order to benefit from the scheme, a person must have worked at least 600 days in the past three years (450 days for those in Ankara). Those with most need get the lowest level of help or no help from the state.
The tourism sector, which accounts for about 12% of the economy, has already been decimated. Some 2.5 million workers will not be able to work as they had been expecting to in the peak tourist months between April and September.
Limited room for manoeuvre
Even before the virus hit Turkey the economy was already weak, still trying to recover from the impacts of a 2016 coup attempt and a 2018 currency crisis, both of which caused severe stress to Turkey’s economic and financial systems.
In March, Turkey’s Central Bank reduced its benchmark interest rate by 1%, and several of the country’s largest private banks announced measures to support the economy, such as suspending loan repayments. As a result, the Turkish lira initially held up reasonably well, compared with other emerging market economies, but it fell to an 18-month low on April 1 as the coronavirus death rates accelerated. Official interest rates have fallen below 10%, providing some protection to those holding Turkish lira versus some foreign currencies.
Turkey’s financial options to limit the impact of the crisis are limited. Credit rating agency Moody’s revised its prediction for the country GDP from 3% growth in 2020 to a 1.4% contraction. Still, it may get a reprieve from the low oil price. Turkey imports almost all its energy needs, and with the recent fall in the price of oil and gas, this means Turkey could save about US$12 billion (£9.6 billion) in energy imports.
It is hard to see very far ahead. During the next few months, it’s expected that Turkey, alongside South Africa and Argentina, could be sliding toward insolvency and debt default. After that, everything depends on how this crisis progresses and how long it will take to end.
MENA sovereign wealth funds are set to yank billions from stock markets, with the cash needed back home reportedAlison Tahmizian Meuse in an article Gulf faces recession as oil deluge meets COVID-19 in an Asian Times article dated March 30, 2020. It is said elsewhere notably in the local media that these sovereign funds could shed something like $300 billion.
Middle East oil exporters are bracing for recession and the lowest growth rates since the 1990s, with economists warning that the “twin shocks” of Covid-19 and plummeting oil prices will have a knock-on effect across the region.
“Quarantines, disruption in supply chains, the crash in oil prices in light of the breakdown of OPEC+, travel restrictions, and business closings point to a recession in the MENA region, the first in three decades,” the Institute of International Finance warned this week.
Oil exporters in the Gulf and North Africa are projected to see growth levels drop to 0.8%, IIF said, based on an average price per barrel of $40. At the time of publication on Monday, crude was hovering at cents above $20 per barrel.
Petro-titans like Saudi Arabia, which have shifted major resources toward sovereign wealth funds in recent years, are expected to recall funds back home as their collective surplus of $65 billion is flipped inside out to a deficit of the same amount or more.
These sovereign wealth funds could shed up to $75 billion in stocks in the coming period, Reuters on Sunday quoted JPMorgan’s Nikolaos Panigirtzoglou as saying.
Saudi Arabia’s Public Investment Fund currently holds significant shares in everything from ride-hailing app Uber to Japan’s SoftBank.
Such funds have likely already offloaded as much as $150 billion-worth of stock in the month of March, said Panigirtzoglou.
How did we get here?
Saudi Arabia earlier this month launched an oil price war, flooding the market with crude in a game of chicken against Russia after the latter refused to collaborate on production cuts.
Moscow, which desired lower prices to compete with US shale, did not blink.
The result has been, Bloomberg reports, a “cascade” of oil surplus, with some landlocked producers literally paying buyers to relieve them of supplies they cannot store.
From Saudi Arabia to Algeria, MENA exporters are expected to see hydrocarbon earnings fall by nearly $200 billion this year, according to the Institute of International Finance report, resulting in a loss of more than 10% of GDP in this sector alone.
As the price war was launched, the novel coronavirus began spreading through the Gulf, shattering hopes of diversifying toward tourism in the near future.
Saudi Arabia, with approximately 1,300 confirmed cases as of Monday, has shuttered the gates of Mecca over fears it could become the new virus epicenter after Iran.
The religious pilgrimage to Islam’s holiest sites, mandatory for every Muslim, nets Saudi Arabia billions of dollars each year.
The financial troubles in the Gulf do not stop at the Persian Gulf, but are slated to have a painful knock-on effect across the Middle East region.
Young people from Lebanon, Jordan, and Egypt – with its population of 100 million, have for decades turned to the Gulf Arab states for jobs after graduation, doing everything from running restaurants in Riyadh to working in banks in Dubai.
Such positions have become even more crucial in a time of heightened visa restrictions in the United States and Europe.
A recession in the Gulf, thus spells an even worse outlook for already struggling economies in the Levant, which often look to the oil producers for help during hard times.
“A global recession will lead to a reduction in trade, foreign direct investment, tourism flows, and remittances to Egypt, Jordan, Morocco, and Lebanon,” IIF said.
Egypt, the report notes, is expected to see a “significant drop” in critical Suez Canal transit revenues, as global trade suffers.
The Egyptian government earlier this month revoked the press credentials of Guardian correspondent Ruth Michaelson after she reported on a researcher’s findings that Egypt was seeing a higher number of Covid-19 cases than reported.
Oman’s Ministry of Technology and Communications (MTC) has committed to a memorandum of cooperation (MoC) with BankDhofar at the Sas Center for the 4th Industrial Revolution (4IR), in order to manage a technology innovation lab at the center.
The MoC was reportedly signed by Dr Salim bin Sultan Al Ruzaiqi, CEO at MTC, and Abdul Hakeem Omar Al-Ojaili, CEO at BankDhofar.
The innovation lab has been established to help students and local Fintech startups, as they focus on developing innovative financial technology products and services.
“The Ministry has launched the SAS Center for the 4th Industrial Revolution to keep pace with the current developments in the ICT sector. Signing this MoC with BankDhofar reflects the significant role of the private sector in supporting this dynamic sector and the Omani youth initiatives in entrepreneurship.”
He added that through this cooperation, they aim to create an encouraging environment that can help develop useful Fintech solutions, which could become part of the 4th IR technologies.
He also said the project aims to encourage and support Oman’s private sector organizations to continue to empower the nation’s emerging technology fields.
“The innovative lab at Sas Centre for 4th Industrial Revolution serves our vision of contributing to such projects of national value, and it also contributes to the development of the Fintech field in general.”
“We are in the midst of the 4th Industrial Revolution where the banking sector has to seize the opportunity and take part, supporting the youth and encouraging them to become effective in a field which will positively contribute to the national economic growth in the future.”
MTC and BankDhofar will work cooperatively to establish, host, and manage the innovation lab. They will provide mentorship and training for Omani students, staff, local startups and Fintech firms.
In December 2019, Bank Muscat, the leading financial services provider in the Sultanate, revealed that the Central Bank of Oman had approved the institution’s request to establish a $100 million (appr. OMR38.5 million) nationwide, strategic Fintech investment program.
The investment program is reportedly part of Bank Muscat’s strategic growth initiative.Sponsored Links by DQ Promote
Souha S. Kanj | Professor of medicine, head of the Division of Infectious Diseases, chair of the Infection Control and Prevention Program at the American University of Beirut Medical Center
The events related to the coronavirus outbreak are evolving quickly around the world. The situation in the Middle East is probably more complex than elsewhere. The countries of the region are a mix of rich and poor states, with variable GDPs and health infrastructures, and are frequently characterized by political instability and tension. War and violent conflicts have weakened health infrastructure in many countries. The influx of migrants through borders has contributed to healthcare related challenges. The region also has geopolitical and economic ties to both China and Iran, which recently appeared as the epicenters for the COVID-19 outbreak in the region.
There is a striking variation in the number of reported cases by country in the Middle East. Underreporting is thought to be prevalent, whether due to an unwillingness, and sometimes a lack of preparedness, to perform accurate testing. Syria, for example, has not reported any cases, despite its close ties to Iran. Its fragile health system is likely incapable of detecting and responding to the epidemic. The same applies to Yemen.
Some countries in the Middle East have raised the alert level during the past week by imposing school closures and other measures of social distancing. The Saudi authorities have cancelled the Umrah pilgrimage and access to Mecca to nonresidents until further notice. Some Gulf countries are requiring visa applicants to produce a negative test for COVID-19. Other countries are still reporting few cases. In Iran, the response was slow, suggesting an unwillingness to report cases before the country’s elections. Mortality among infected patients in Iran seems to be among the highest after China.
There is little to suggest that Middle Eastern countries have joined efforts to address this global viral threat. The Arab League has remained silent. No meetings have been announced to discuss the evolving situation. Arab countries in the Middle East have so far missed an opportunity to overcome political divisions and closely collaborate to contain the spread of the virus in the region. It might not be too late to engage in coordination, especially from the wealthier states, to provide technical, material, and financial assistance to their neighbors.
Karl Marx once said that history repeats itself, first as tragedy, then as farce. Nothing illustrates this more than the series of baffling policy decisions by Iran’s leadership that have resulted in the largest outbreak of the novel coronavirus (COVID-19) in the region. Despite advances in the biomedical sciences and infectious disease control in the past century, the Iranian government’s response to the coronavirus outbreak has been hobbled by ideological, religious, and economic concerns.
Other countries in the Middle East have followed suit, often prioritizing their non-medical domestic and foreign policy interests in establishing travel bans, quarantines, and other forms of public health precautions. These religious, political, and economic determinants of infectious diseases hark back to the pre-World War I period in the region. Devotional visits to shrine cities and burials at holy sites played an important role in the dissemination of pandemic outbreaks in the Iranian and Ottoman Empires throughout the 19th and early 20th centuries. Similarly, political, economic, and religious interests often took precedence over public welfare in the way quarantines, travel bans, and disinfection policies were established within the empires and on their frontiers. This shows us that historic social and political forces continue to shape the impact of contagions on the peoples of the Middle East.
Basem al-Shabb | Former Lebanese parliamentarian, American Board in general and cardiothoracic surgery
The response to the COVID-19 epidemic in the Middle East has followed the usual script in the region for dealing with calamity. Whereas human suffering invites cooperation in other places, in the Middle East it seams to accentuate cultural and sectarian tensions. As reports of cases were trickling out of Iran, the authorities engaged in denial. Only recently did the Syrian Health Ministry confidently state that there were no known cases in Syria. In Lebanon, flights from Iran, the epicenter of the epidemic, continued unabated and screening at the airport was instituted rather late in the game. Throughout the region, there is an undercurrent of sectarianism. While Iran wrestles with a massive epidemic, Egypt has reported only a few cases and, interestingly, Turkey has reported none. There is hardly any cooperation or exchange of information on COVID-19 among the countries of the Levant.
The epidemic has also touched on religious sensitivities, with some churches in Lebanon insisting on pursuing communion using a single utensil. There is no doubt the coronavirus has brought out the usual regional reactions of denial, delayed responses, myth-mongering, sectarianism, as well as conspiracy theories.
Bader al-Saif | Nonresident fellow at the Carnegie Middle East Center in Beirut, where his research focuses on the Gulf and Arabian Peninsula
The coronavirus outbreak is a potent reminder that the Middle East is no different than the rest of the world. The outbreak has reinforced preexisting tendencies in the region, where it is no secret that systems are largely broken. It has further exposed governmental weakness, evidenced in ambiguous, inconsistent policies. Crisis management and transparency are largely lacking, and so is the faith of citizens in governments’ ability to protect them. Political considerations have triumphed over necessary health directives in various states, putting citizens at further risk, whether by allowing the continuation of flights from high risk areas, such as Iranians traveling to Lebanon, or deferring necessary testing, as in Egyptians traveling to Kuwait. There are notable exceptions, such as Saudi Arabia, where the state has managed the outbreak of the coronavirus and peoples’ reactions to it.
Responses have ranged from denial to fear. Some assume the virus is a conspiracy theory, while others are misinformed about its nature. The virus has also justified racist slurs. With most of the Middle East contracting the virus via Iran, the anti-Iran camp has condemned Iran’s irresponsibility and poor services (ignoring the impact of U.S. sanctions), with some even suggesting that the virus is a Shi‘a phenomenon aimed at infecting the Sunni-majority Middle East.
There has been a third, more measured response among less ideological people. These include business owners, who are concerned about the economic impact of the outbreak; expatriates barred from returning to their homes due to travel bans; families who do not want their children’s education affected by prolonged breaks; and sensible policymakers who have sought to jointly coordinate responses. The outbreak has reminded Middle Easterners of their shortcomings. They patiently are awaiting a breakthrough that would end the coronavirus outbreak, so they can redirect their efforts to addressing other problems long plaguing the region.
Posted on March 8, 2020, in The Arab Weekly, Six decades after independence, Middle East still looking for growth model by Rashmee Roshan Lall is an accurate survey of the region that faces, as we speak, prospects of harshest times. How is the Middle East still looking for a growth model? Investing in the human capital of children and young people as well as enhancing their prospects for productive employment and economic growth is little more complicated than relying on Crude Oil exports related revenues. These are the main if not the only source of earnings of the region now plummeting perhaps for good before even peaking. In effect, all petrodollar inspired and financed development that, put simply, was transposed from certain parts of the world, using not only imported materials but also management and all human resources can not result in anything different from that described in this article.
Though a large youthful population would normally be regarded an economic blessing, it’s become the bane of the MENA region.
It’s been 75 years since World War II ended and the idea of decolonising the Middle East and North Africa began to gain ground but, while formal colonisation ended about six decades ago, the region seems unable to find a clear path to growth.
Rather than an “Arab spring,” what may be needed is a temperate autumn, a season of mellow fruitfulness to tackle the region’s biggest problems. These include finding a way to use the demographic bulge to advantage, reducing inequality of opportunity and outcome and boosting local opportunity.
Here are some of the region’s key issues:
The MENA region’s population grew from around 100 million in 1950 to approximately 380 million in 2000, the Population Reference Bureau said. It is now about 420 million and half that population lives in four countries — Egypt, Sudan, Iraq and Yemen.
The 2016 Arab Human Development Report, which focused on youth, said most of the region’s population is under the age of 25.
The youth bulge is the result of declining mortality rates in the past 40 years as well as an average annual population growth rate of 1.8%, compared with 1% globally. The absolute number of young people is predicted to increase from 46 million in 2010 to 58 million in 2025.
Though a large youthful population would normally be regarded an economic blessing, it’s become the bane of the MENA region. The demographic trend suggests the region needs to create more than 300 million jobs by 2050, the World Bank said.
Jihad Azour, International Monetary Fund (IMF) director for the Middle East and Central Asia, said MENA countries’ growth rate “is lower that what is required to tackle unemployment. Youth unemployment in the region exceeds 25%-30%.” The average unemployment rate across the region is 11%, compared to 7% in other emerging and developing economies.
Unsurprisingly, said Harvard economist Ishac Diwan, a senior fellow at the Middle East Initiative, young Arabs are unhappier than their elders as well as their peers in countries at similar stages of development.
Last year’s Arab Youth Survey stated that 45% of young Arab respondents said they regard joblessness as one of the region’s main challenges, well ahead of the Syrian war (28%) and the threat of terrorism (26%).
The region’s population is expected to nearly double by 2030 and the IMF estimated that 27 million young Arabs will enter the labour market the next five years.
Poverty and inequality
Most Arab people do not live in oil-rich countries. Data from the UN Economic and Social Commission for Western Asia (ESCWA) stated that 116 million people across ten Arab countries (41% of the total population), are poor and another 25% were vulnerable to poverty. This translates to an estimated 250 million people who may be poor or vulnerable out of a population of 400 million.
The MENA region is also regarded as the most unequal in the world, with the top 10% of its people accounting for 64% of wealth, although the average masks enormous differences from one country to another.
The middle class in non-oil producing Arab countries has shrunk from 45% to 33% of the population, ESCWA economists said. In a report for the Carnegie Corporation last year, Palestinian-American author Rami G. Khouri described what he called “poverty’s new agony,” the fact that a poor family in the Middle East will remain poor for several generations.
Egypt is a case in point. In 2018, Cairo vowed to halve poverty by 2020 and eliminate it by 2030. However, Egypt’s national statistics agency released a report on household finances last year that said that 33% of Egypt’s 99 million people were classified as poor, up from 28% in 2015. The World Bank subsequently nearly doubled that figure, saying 60% of Egyptians were “either poor or vulnerable.”
Wealth gaps between countries are greater in the region than in others because it has some of the world’s richest economies as well as some of the poorest, such as Yemen.
Inequality is not the only problem in the region. Former World Bank economist Branko Milanovic said the uneven picture means that last year’s protests in Lebanon, Algeria, Sudan and Iraq cannot be explained by “a blanket story of inequality.”
Indeed, Algeria, a relatively egalitarian country, was roiled by protests, first against a long-serving president and then against the wider political system.
French economist Thomas Piketty, who wrote the bestselling book on income inequality, “Capital in the Twenty-First Century,” said Arab countries must come up with a way to share the region’s vast and unequally distributed wealth.
Lost decades of growth
In the decade from 2009, the region’s average economic growth was one-third slower than in the previous decade. The IMF said per capita incomes have been “near stagnant” and youth unemployment has “worsened significantly.”
The state is the largest employer in many Arab countries and over-regulation of the private sector left it underdeveloped and unable to overcome the significant barriers to trade and economic cooperation across regional borders. Meanwhile, inflexible labour laws stifled job creation and cronyism allowed inefficiency to stay unchallenged. In 2018, the average rank of Arab countries on the World Bank’s Doing Business survey was 115th out of 190 countries.
Along with structural factors, conflict has had a debilitating effect on economic growth. Three years ago, the World Bank noted that the Syrian war had killed approximately 500,000 people, displaced half the population — more than 10 million people — and reduced more than two-thirds of Syrians to poverty.
By 2017, conflict in Yemen and Libya had displaced more than 15% and 10% of their respective populations of 4 million and 6 million. Taken together, the Syrian, Yemen and Libyan civil wars have affected more than 60 million people, about one-fifth of the MENA population.
Infrastructural damage runs into the billions of dollars but it is the loss — or outright collapse, as in Yemen — of economic activity that has affected real GDP growth.
Countries in the region affected by conflict lost $614 billion cumulatively in GDP from 2010-15 — 6% of the regional GDP, ESCWA’s 2018 report on institutional development in post-conflict settings stated.
New thinking needed
This is the year when, for the first time, an Arab country holds the chairmanship of the Group of 20 of the world’s largest economies. It could be an opportunity to consider existing trends within the region, what needs to be changed and how.
In the words of Oxford development macroeconomist Adeel Malik, “the Arab developmental model… seems to have passed its expiration date.” In a 2014 paper for the Journal of International Affairs, Malik said “failure of the Arab state to deliver social justice is ultimately rooted in the failure of a development model based on heavy state intervention in the economy and increasingly unsustainable buyouts of local populations through generous welfare entitlements.”
It’s a good point, for the region’s richest countries just as much as its poorest. Oil-rich states are affected by dramatic changes in oil prices and the increasingly urgent suggestion that the world is at “peak oil.” An IMF report warned that, by 2034, declining oil demand could erode the $2 trillion in financial wealth amassed by Gulf Cooperation Council members. The IMF said “faster progress with economic diversification and private sector development will be critical to ensure sustainable growth.”
Creativity and courage will be needed if the Arab world is to meet the expectations of its youthful population and the challenges posed by its increasing inequality.
The following article titled Oliver Wyman: MENA youth’s perception of the private sector by Georgia Wilson – Leadership is worth reading to comprehend the peculiar situation of the MENA youth. In effect, the region despite having the highest youth population shares in the world, as well as the highest rates of youth unemployment, there seems to be still some sort of freedom of choice between private and public service employment.
Business Chief looks at Oliver Wyman, and INJAZ Al-Arab recently conducted research on the youth perception of the private sector.
Across the Middle East and North Africa (MENA) region, over 2,400 young people between the age of 16 and 36 were surveyed to gain insight into the youth perception of the private sector.
“It is critical to capture the perspective of the youth and assess what they require to bolster the private sector of the future. We see a healthy inclination towards entrepreneurship, and a clear idea of what factors can facilitate lifelong learning. These are both indicators of their perception of the private sector, which is key to sustainable economic growth of their countries and the region. The youth are a key driver in the realization of economic stability, and we are proud to support INJAZ Al-Arab in helping the youth to fulfill their economic potential,” commented Jeff Youssef, Partner at Oliver Wyman.
Key findings of the youth survey:
79% feel positive about the private sector’s contribution to the economy – a 41% increase from 2018
75% expect the private sector to grow in the next five years – an 11% decrease from 2018
55% are discouraged from working in the private sector due to lack of opportunities and lack of competitive benefits – an 8% increase from 2018
50% perceive the “who you know” favouritism within organisations, to be the primary obstacle when seeking private sector employment
78% see themselves working in the private sector in the near future
84% feel inspired to start their own entrepreneurial venture in the near future
53% see leadership, creativity and communication as the most important skills for the private sector
“For young people today, it is extremely important that they are well equipped with skills, knowledge, and sense of entrepreneurship to enter the workforce. INJAZ’s collaboration with Oliver Wyman will further allow us to tackle the issue of youth unemployment in MENA, as we are certain that the findings are of great benefit to multiple stakeholders and that our initiative reflects on their potential to impact policy reform, program creation, and educational institution transformation,” added Akef Aqrabawi, CEO at INJAZ Al-Arab.
HOTEL BUSINESS on February 17, 2020, informs that MENA to see $23B in Hotel Building by 2023, mostly in the Gulf region. A region that still knows a significant construction boom despite inevitable volatility in its primary revenue would be hosting crowds of visitors soon to two major international events. These are the International Exhibition of 2020 and the Football World Cup 2022 in Qatar. The other regions of the MENA, whether North African or of the Levant that mostly preoccupied with their respective geostrategic concerns, have smaller demand for hotels buildings.
INTERNATIONAL REPORT—The Arabian Hotel Investment Conference (AHIC) 2020 has released the third annual AHIC Hotel Investment Forecast, which reveals that more than $23 billion worth of hotel construction contracts are scheduled to be awarded in the Middle East and North Africa (MENA) between now and 2023.
According to research conducted by regional project tracking service MEED Projects in Q4 2019, the hotel development sector will be most active in Oman, Egypt, UAE and Saudi Arabia, making these the markets to watch in 2020.
“On the back of the more than 700 new hotels worth in excess of $53 billion having been built over the past seven years, the Middle East is rightly viewed as a high-growth region for tourism,” said Ed James, director of content and analysis, MEED Projects. “Growing economies, enhanced infrastructure and the opening up of the sector have acted as catalysts for development.”
He continued, “In terms of the hotel pipeline, Saudi Arabia is the leading future market with just under $9 billion worth of projects planned to be awarded over the next four years. This includes a minimum of 21,500 rooms, across 36 individual hotel, resorts and master-planned tourist destinations. The Kingdom has made tourism and the opening up of its cultural heritage and pristine Red Sea coastline key components of its 2030 Vision. Self-styled ‘gigaprojects’ like The Red Sea Project, Amaala, Neom and the Qiddiya entertainment hub are set to transform Saudi Arabia and the region over the next few years.”
The UAE is in second place, with $7.6 billion worth of hotel construction contracts on the four-year horizon. Oman has hotel developments worth more than $2 billion in the pipeline, while Egypt has some $1.9 billion worth of projects set to be awarded by 2023.
The levels of investment revealed by the AHIC Hotel Investment Forecast over the next four years are testament to an incredibly buoyant market, according to forecasters. “New hotel resorts like Jebel Sifah and the St. Regis Muscat in Oman, the Ritz-Carlton in Sharm el-Sheikh and the MGM Resort and Bellagio Hotel in Dubai are set to continue to make the Middle East one of the most vibrant and diverse tourism destinations in the world,” said James.
The regional hotel pipeline and the future outlook for hotel investment in the Middle East will be discussed in depth at the 16th edition of AHIC, which returns to Madinat Jumeirah in Dubai from April 14-16.
“The AHIC Hotel Investment Forecast is an incredibly valuable piece of research that clearly demonstrates that the Middle East still has so much to offer when it comes to future hotel expansion and investment,” said Jonathan Worsley, chairman, Bench Events, and founder, AHIC. “We’re especially excited to see markets such as Oman and Egypt, which offer incredibly rich and diverse tourism landscapes, return to the forefront of development in the region.”
Muscat: Enhancing skills and supporting job creation for locals is the new goal and vision 2020 for Knowledge Oman.
Speaking about the new plans, Tariq Hilal Al Barwanni, Knowledge Oman Founder said: “Supporting job creation by enhancing the necessary skills employers require from nationals to acquire is Knowledge Oman’s 2020 new goal and direction.”
This came as an announcement of the Sultanate’s multi-award winning knowledge-sharing platform’s strategic plan to make vision 2040 a reality. Knowledge Oman begins the new year with setting attainable goals, based on past achievements, which will support His Majesty Sultan Haitham bin Tarik in maintaining a prosperous and thriving country.
“Empowering the society with the necessary knowledge that is required to build a prosperous future is our key objective going forward. We will do this by aligning with vision 2040 and supporting His Majesty Sultan Haitham bin Tarik’s leadership,” he emphasised.
Since 2008, Knowledge Oman has managed within 12 years to solidify the vision of late His Majesty Sultan Qaboos bin Said bin Taimour of transforming Oman into a knowledge based society by impacting hundred of thousands of people with 74 initiatives in the form of projects, workshops, seminars that positively impacted students from college and universities, women, entrepreneurs and professionals from various industries.
Projects were supported by over 35 partners locally and internationally attracting over 80,000 registrations and 700 volunteers across the years.
Knowledge Oman received 4 awards that includes the Outstanding contribution to the cause of education from the World Human Resource Development (HRD) Congress.
Members of the platform consist of multinational group of both locals and expatriates living in the country with the passion of creating, sharing and exchanging knowledge.
“In planning our strategy for 2020, we are focusing on three key areas to support Oman towards a society which is rich in human, economic and natural resources that aligns with the 2040 vision. We are launching Knowledge Oman Talks, refining our Knowledge Oman Seminars and collaborating with like-minded partners to deliver initiatives that benefit the society” outlined Tariq.
Knowledge Oman Talks will manage and invite experienced professionals to schools, colleges, and universities to bridge the gap between academia & industry. Knowledge Oman Seminars will be enhanced to organise periodic events that discuss contemporary issues and offer suggestions for development to society. Moreover, Knowledge Oman will invite partners to collaborate on initiatives that benefit the society.
Knowledge Oman’s mission in the past was driven by the vision of late His Majesty Sultan Qaboos bin Said bin Taimour to create a knowledge-based society.
Optimistic about the year ahead and working under the leadership of His Majesty Sultan Haitham bin Tarik, Knowledge Oman will continue to build local and international partnerships and work towards providing people in Oman with the necessary knowledge and skills to meet the Oman Vision 2040.
“A multi-faceted investment strategy is needed to achieve the three objectives of income, growth and stability,” points out Willem Sels, chief market strategist, HSBC Private Banking.
The outlook for the Middle East and North Africa (Mena) region for the new decade is a “fascinating” one, full of continued economic reforms, transformation and market liberalisation, according to HSBC. “With these developments, opportunities are expected to be widespread, across multiple industries and across the region. The combination of supportive monetary policy and responsive central banks are a few of the additional supportive variables for the region,” it said in a release yesterday.
The new decade will not be as kind to investors as the last and this will mean a new path for investments, said HSBC Private Banking in its first quarter’s investment outlook. “We will most likely see a US recession at some point in the next ten years, and while central banks’ policies should remain accommodative, it is clear that the new decade will mean a new path for investments,” says HSBC Private Banking in its investment outlook for the first quarter of 2020. “A multi-faceted investment strategy is needed to achieve the three objectives of income, growth and stability,” pointed out Willem Sels, chief market strategist, HSBC Private Banking. In a low growth and low interest rate environment, returns are unlikely to be as high as they were in the past decade, and in an environment where broad-based market upside is lower than in the past, and political risks remain high, HSBC Private Banking believes diversifying risk exposures will be especially important. HSBC Private Banking says portfolios should avoid excessive cash balances as well as the lowest rated end of high yield. It favours dollar investment grade, emerging markets’ local and hard currency debt, complemented with dividend stocks, real estate and private debt instruments to generate further income. It also sees opportunities to boost the return potential of portfolios by focusing on quality companies with sustained earnings growth and, where appropriate, it believes some leverage can help boost the net income of portfolios. It can also make sense selectively to look to hedge funds and private equity to capture growth opportunities and private equity to look through short-term market volatility. “It’s a new path for investments, but sometimes, new paths lead you to the most interesting sights” Sels noted. In 2020-21, HSBC Private Banking says investors can expect interesting opportunities for long term growth in sectors, geographies or themes related to the ‘Fourth Industrial Revolution’ or ‘sustainability’. It is also optimistic that the ageing, urban, digital, mobile, sharing-based, knowledge-based, circular, fast-paced and increasingly Asian global economy provides companies and investors with plenty of opportunities.
DUBAI (Reuters) – Economic growth in the Gulf will pick up this year and next, helped by Saudi Arabia’s investment program and Expo 2020 in Dubai, although the region will continue to feel the impact of oil output cuts, a Reuters poll showed on Wednesday.
The above picture is a FILE PHOTO: A car drives past a construction site of Riyadh Metro and the King Abdullah Financial District in Riyadh, Saudi Arabia, November 12, 2017. REUTERS/Faisal Al Nasser
OPEC and non-OPEC allies agreed in December to deepen output cuts, coming in addition to previously agreed curbs of 1.2 million bpd, and will represent about 1.7% of global oil output.
Saudi Arabia’s economy grew 0.3% in 2019, and is expected to grow 2.0% in 2020 and 2.2% in 2021, the poll of 26 economists, conducted Jan. 7-21, projected. A similar poll three months ago gave the same forecasts for 2020 and 2021 but estimated 0.7% growth in 2019.
“Saudi Arabia’s third-quarter GDP data, showing a fall of 0.5% year-on-year, was broadly as expected, with OPEC+ cuts constraining the contribution of the oil sector to economic growth,” Oxford Economics wrote in a research note. But diversification efforts “show signs of feedthrough”, it said.
Monica Malik, chief economist at Abu Dhabi Commercial Bank, said a stronger non-oil sector would help Saudi Arabia.
“Real GDP growth in Saudi should benefit from stronger non-oil activity as the investment program gains momentum. The drag from the oil sector should moderate in 2020 following a sharp reduction in oil output in 2019,” she said.
Median forecasts for growth in Oman, a relatively small Gulf crude producer, were significantly slashed. Analysts saw 1.0% growth in 2019, 1.7% in 2020 and 2.3% in 2021. Three months ago, Oman’s GDP was seen growing 1.3% in 2019, 3.2% in 2020 and 3.0% in 2021.
Oman’s ruler of 50 years, Sultan Qaboos bin Said, died earlier this month.
Maya Senussi, senior economist at Oxford Economics, said deeper oil production cuts agreed by OPEC and allies in December, and prospects for non-oil activity remaining weak, have weighed on Oman’s outlook.
Analysts forecast growth of 1.7% in 2019 for the United Arab Emirates, down from 2.2% in the poll three months ago. Its 2020 and 2021 estimates were unchanged.
The governments of Dubai and Abu Dhabi, the country’s two main emirates, have boosted spending to provide stimulus to their economies.
Dubai, which will host Expo 2020 this year, announced a record budget of around $18 billion this year, a 17% increase year on year, while Abu Dhabi announced in 2018 a three-year package of $13.6 billion.
Kuwait, which said last week it expects a budget deficit of 9.2 billion dinars ($30.3 billion) in the fiscal year starting on April 1, was forecast to see 0.5% economic growth in 2019, down from the 1% expected three months ago.
Kuwait’s GDP growth was revised down to 1.9% in 2020 from 2.2% three months earlier. Expectations for its 2021 growth, however, have risen to 2.6% from 2.3%.
GDP growth for Qatar, the world’s largest exporter of liquefied natural gas, was revised down to 0.9% in 2019 from 2.0% three months ago. Its 2020 forecast was cut to 2.1% from 2.4%, while its 2021 estimate was lifted to 2.5% from 2.3%.
Polling by Md Manzer Hussain; Writing by Yousef Saba and Nafisa Eltahir; Editing by Susan FentonOur Standards:
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