I just got back from the World Economic Forum is Jordan and would like to share some of the highlights from those days;
Main risks that could affect substantially negatively the Middle East:
1. Chinese economic hard landing
2. Global asset price collapse
3. Retrenchment from globalization
4. Geopolitical and geostrategic instability
Other risks highlighted:
1. Oil price shock/energy supply interruptions
2. US current account deficit/fall in US$
3. Climate change
4. Loss of freshwater services
Three different scenarios out to 2025 were identified by a research team from the WEF for the Middle East: "Oasis", "Sandstorm" and "The Fertile Gulf."
"Oasis" describes a scenario where regional stability continues to be a challenge for the GCC countries, which are nevertheless able to achieve substantial institutional reforms. The GCC countries develop strong identities and work together to coordinate diplomatic and economic policies. The GCC countries are an oasis of stability and prosperity in an otherwise troubled region.
"Sandstorm" describes a future where regional instability is a defining factor, affecting the ability of the GCC to carry out much needed institutional reforms. Caught in a shifting, violent environment, the GCC countries are blinded, unable to navigate their way out of the sandstorm and identify opportunities for prosperity for their populations.
"The Fertile Gulf" describes the rise of the GCC countries as innovation hubs in a global environment characterized by strong demand for energy an d increasing globalization. Regional stability gives the GCC countries the opportunity to focus on enhancing their human capital at all levels, investing heavily in education while proceeding carefully with political and institutional reform to support their growing economies and societies.
Political Issues:
Iran
All GCC participants openly expressed their strong worries about Iran's nuclear program. There are doubts that the Iranian nuclear program is purely for civilian use.
Iran representatives did not deny their interference in Irak, for which they were strongly criticized by Jordanian, Iraki and US officials.
The US representatives as well as the Irakis explained their high degree of frustration with Iran smugling weapons and bombs into Irak.
Philanthropy
Most government officials, including Queen Rania of Jordan, admitted that the government alone cannot help society and that the private sector has to play an active role. The private sector is increasingly doing so in the region.
New energies were often discussed and mentioned as an area where the GCC states should be investing more. The billionaire, Naguib Sawiris, owner of Orascom Telecom, Egypt said: "We should invest in renewable energy".
Impact of Oil Boom on the region ecomies
Over the last 5 years, GNP for the Gulf region has doubled, from $600 billion to $1.2 trillion.
In the last few years, $500 billion of wealth has been accumulated.
Conclusion:
Participants were overwhelmingly enthusiastic about the prospects for GCC economies. That's also my bet if the regional cong=flicts don't spread out.
Main risks that could affect substantially negatively the Middle East:
1. Chinese economic hard landing
2. Global asset price collapse
3. Retrenchment from globalization
4. Geopolitical and geostrategic instability
Other risks highlighted:
1. Oil price shock/energy supply interruptions
2. US current account deficit/fall in US$
3. Climate change
4. Loss of freshwater services
Three different scenarios out to 2025 were identified by a research team from the WEF for the Middle East: "Oasis", "Sandstorm" and "The Fertile Gulf."
"Oasis" describes a scenario where regional stability continues to be a challenge for the GCC countries, which are nevertheless able to achieve substantial institutional reforms. The GCC countries develop strong identities and work together to coordinate diplomatic and economic policies. The GCC countries are an oasis of stability and prosperity in an otherwise troubled region.
"Sandstorm" describes a future where regional instability is a defining factor, affecting the ability of the GCC to carry out much needed institutional reforms. Caught in a shifting, violent environment, the GCC countries are blinded, unable to navigate their way out of the sandstorm and identify opportunities for prosperity for their populations.
"The Fertile Gulf" describes the rise of the GCC countries as innovation hubs in a global environment characterized by strong demand for energy an d increasing globalization. Regional stability gives the GCC countries the opportunity to focus on enhancing their human capital at all levels, investing heavily in education while proceeding carefully with political and institutional reform to support their growing economies and societies.
Political Issues:
Iran
All GCC participants openly expressed their strong worries about Iran's nuclear program. There are doubts that the Iranian nuclear program is purely for civilian use.
Iran representatives did not deny their interference in Irak, for which they were strongly criticized by Jordanian, Iraki and US officials.
The US representatives as well as the Irakis explained their high degree of frustration with Iran smugling weapons and bombs into Irak.
Philanthropy
Most government officials, including Queen Rania of Jordan, admitted that the government alone cannot help society and that the private sector has to play an active role. The private sector is increasingly doing so in the region.
New energies were often discussed and mentioned as an area where the GCC states should be investing more. The billionaire, Naguib Sawiris, owner of Orascom Telecom, Egypt said: "We should invest in renewable energy".
Impact of Oil Boom on the region ecomies
Over the last 5 years, GNP for the Gulf region has doubled, from $600 billion to $1.2 trillion.
In the last few years, $500 billion of wealth has been accumulated.
Conclusion:
Participants were overwhelmingly enthusiastic about the prospects for GCC economies. That's also my bet if the regional cong=flicts don't spread out.
