GCC Economies Witnessing a Golden Age of Progress and Development

• Regional economies are present process a constructive cycle of enhancing competitiveness and development 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
• Overseas Direct Funding in GCC reaches 5% of GDP, highest of any area
• Whole contract awards of US$205 billion in 2023
• Majid Jafar: “We’re having fun with the fruits of visionary management and many years of stability within the area.”

Gulf Cooperation Council (GCC) economies are experiencing a golden age of development 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 development that’s being accelerated by enhancing financial situations, with regional GDP development 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 world affect and its financial system simply as a brand new technology of well-educated, bold 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 many years 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 mentioned that GCC economies are exhibiting sturdy and sustained development regardless of world uncertainties and regional turmoil, having fun with relative stability on account of structural reforms, fiscal accountability, and bold 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 development within the GCC in 2024, Jafar mentioned, 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 surroundings, has helped develop the digital financial system to $38 billion in 2023 and is anticipated 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 technology 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. Whole contract awards in 2023 reached US$205 billion, Jafar mentioned.

In the meantime, bold reform agendas similar to 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 reinforce fiscal sustainability and resilience, strategic industries, and digital and inexperienced infrastructure.

In accordance with the IMF, GCC nations have attracted extra FDI as a share of GDP than some other 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 overseas possession of onshore firms and modifications to Public-Personal Partnerships (PPP) laws to encourage extra in depth non-public sector participation. Prior to now decade, GCC nations have grow to be extra central to the worldwide FDI community, pushed by the UAE, Saudi Arabia, and, to some extent, Kuwait.

In the meantime, outstanding 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 mentioned.

Jafar mentioned that enabling, empowering, and enhancing the non-public sector will probably be vital to sustaining development ranges and creating extra job alternatives for the younger workforce. Accelerating innovation in monetary regulation may even deepen capital markets, making the area a centre of improvement of blockchain and fintech.

Personal sector job creation can be very important for making certain 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 non-public firms. And a brand new technology of bold, well-educated younger women and men graduating from universities will play an vital position in driving development.

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

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 talk about priorities for the 12 months forward. It’s going to present a platform to have interaction in constructive, forward-looking dialogues and assist discover options by way of public-private cooperation.