Mosamania
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GCC in the driving seat
As the majority of the world’s economies struggle, there are still regions with growing economies and vast business potential. At the forefront of this pack are the GCC countries who are making award-winning progress
It’s a cruel set of circumstances that casts the nations of the Gulf Cooperation Council in such good health. With Europe struggling to implement austerity, the US economy at crawl pace and even China’s mighty growth hitting a few speed bumps, the Gulf states are enjoying booming economies thanks to their abundance of fossil fuel sources.
The near solitary nature of the region’s success has apparently fostered an increased sense of solidarity among GCC members. The organisation has strengthened its identity over the past year, negotiating as a unified body a series of trade agreements that secure vital imports to the region. Going forward, discussions have begun to bolster the GCC’s role in the defense of the Gulf, with the possibility of the council taking on the role of a regional security body with its own defense force to protect joint interests akin to the African Union or NATO.
Recent talks have also focused on ensuring common economic aims, with work done towards the simplification of trade between nations. In spite of the example set in Europe, talks have also continued into the possibility of GCC nations entering into a joint currency in the future. This move, though some way off, would transform the GCC into a powerful economic body able to compete with the largest of the world’s economies.
At such an interesting time for the region, World Finance’s GCC Investment & Development 2012 Awards offer the opportunity to assess the particular activities of individual nations and see how they are applying their wealth.
Saudi strength
Saudi Arabia, the largest of the GCC members in terms of geography, has been the most vocal in its support for strengthening the organisation. The Saudi administration appears to value a close relationship between GCC members as a way of improving its negotiating position when dealing with its western allies in Europe and the US both in politics and trade. And the Kingdom seems keen to strengthen the reason it enjoys such Western support. Of a recently announced $107bn of state investment projects, a sizable chunk will go towards bolstering the country’s highly profitable oil industry, supporting plans to further improve refinery capabilities.
This is an area of continuous investment for Saudi Arabia, receiving around $63bn in investment in the past five years alone. But it’s an investment that pays for itself. Demand for oil is increasing sharply and China’s predicted five percent rise in daily oil consumption this year alone represents one sixth of Saudi Arabia’s total daily production. As one of the few countries with spare oil production capacity, Saudi Arabia can be sure that investing in increasing production levels will most certainly pay for itself as well as yield increased influence on world powers dependant on black gold.
Saudi Arabia’s energy investment is not solely focused on oil. As construction continues on a plethora of new city-scale conurbations in the kingdom, every opportunity is being made to explore other forms of power generation. Plans under consideration would see the construction of 16 nuclear power stations, a range of water desalinisation plants, as well as exploration into solar power schemes. These measures will help the Kingdom meet its expected 120 gigawatt electricity requirement by 2030 – three times its current usage – while preserving its fossil fuel reserves for export markets.
Building an infrastructure
One of the most radical transformations witnessed over the history of the GCC Investment & Development Awards has been that of Qatar. The state’s victory in securing the football World Cup for 2022 has been a catalyst for development that has gone far beyond the required stadiums for the event. With the state’s population doubling to 1.4 million since 2004, it has been an uphill climb to ensure the country keeps pace with the new demands this has created. Foremost of these has been the need to radically increase the amount of housing in the state. One attempt to tackle this issue has been the $5.5bn redevelopment of 350,000sq. m at the centre of the state’s capital, Doha. This alone is expected to create homes for over 27,000 people, as well as new schools, hotels and amenities.
Qatar is also in the process of significantly upgrading its infrastructure systems and in particular its rail network. The massive Qatar Integrated Railway Project is due to see the construction of four metro lines, a tramway, commuter and freight rail services, high-speed inter city lines and an international rail line to run along the proposed Qatar Bahrain Causeway that will link the two countries. The total cost of the project is expected to be in excess of $35bn, with the first multi-billion-dollar contracts for tunnelling work allocated in the early part of 2012.
On a more fundamental level, work is also underway to improve the state’s food production levels. Currently, Qatar imports around 90 percent of its food. As a step to alter this, Crown Prince Sheikh Tamim bin Hamad bin Khalifa al-Thani established the Qatar National Food Security Programme in the early part of 2012, with the aim of doubling the number of farms in the state from 1,400 to around 3,000. Combined with new agricultural techniques and technologies, it’s believed the state could produce as much as 60 percent of the food it requires.
Pumping gas
Much of the funding required for these projects comes from the sale of the state’s prolific supply of natural gas, which it exports in liquefied form. In spite of the strength of this industry, there is currently a drive in place to diversify the Qatari economy. The state has traditionally relied upon its petroleum products, and in particular liquefied natural gas, to generate the most substantial part of its revenue. Recognition is growing that such natural resources are finite. As a result Qatar is looking at various ways to remodel its economy.
One plan has been to ensure the right conditions and facilities required to turn the state into a financial centre for the Gulf region. The Qatar Financial Centre Authority already operates a significant loan service to the region, offering $1.2trn of funds towards supporting development projects across the GCC region.
The state has also shown interest towards technological development with the aim of becoming the region’s Silicon Valley. To achieve this, observers suggest the state should adopt a series of economic free zones that would promote the tech industries through decreased taxation and legislation. These would compliment other recent developments such as the Qatar Science and Technology Park, which has already attracted Research and Development (R&D) projects from a range of international companies including Microsoft and ExxonMobil. This is set to be an interesting growth area in Qatar going forward and one the GCC Investment & Development Awards plans to follow closely in the future.
Lasting relationships
In contrast to the development in Qatar, the United Arab Emirates (UAE) is in a state of mixed fortunes. The UAE’s property market – once an area for major investment – remains in a state of recovery after the collapse of the Dubai market in 2009. Prices have fallen by as much as 20 percent and opinions remain divided whether prices will stabilise or further drop away. Since this occurrence, the UAE has focused on power and communications infrastructure investments. Along with exploring renewable energy possibilities, the UAE aims to be one of the first places in the world to roll out a full 4G mobile phone network. This will allow users with a compatible handset the ability to access mobile internet speeds ten times faster than current systems; a service of substantial benefit to both the financial services industry as well as the population at large.
To accomplish this, the UAE has invested $21bn in a range of Pakistani-based telecoms companies, strengthening the ties between the country and the emirates. With Pakistan poised for substantial economic growth in the coming decade, a strong relationship founded now will prove of huge benefit to the UAE when vying for larger investment opportunities in Pakistan. This is a relationship very likely to become prominent in the coming years and will likely form a part of the focus in the GCC Investment & Development Awards in the future.
In Oman, the benefit of its long standing Vision 2020 programme has come to be realised.
Spurred by the low price of oil in the later-1990s, the country began plans to broaden the scope of its economy. Some of these are now coming to fruition. The country’s positioning on the Arabian Sea has made it a key location for shipping in the Gulf region. The continued development of the country’s port infrastructure has helped sustain growth in this industry, with over $1bn of fresh development confirmed during 2011.
Oman is also seeking to improve the revenue it generates from tourism. To assist this and as part of a region wide drive to improve transportation, the country has already invested $100m in upgrading its air traffic control systems and is now engaged with a $1.2bn upgrade to its central air hub, Muscat International Airport, with the aim of tripling its annual passenger capacity to 12 million people.
Chinese ties
Of the GCC members, Kuwait has perhaps seemed the most cautious as a result of the economic climate. Such impressions will be altered sharply as the work of the Mega Projects Agency – the executive arm of the Kuwaiti Ministry of Public Works – begins to take shape. Their central project is Madinat al-Hareer or City of Silk; a 250sq. km city on the opposite shore of Kuwait Bay to Kuwait City. Designed to be a transportation and tourist hub, Madinat al-Hareer will also become the home to 750,000 people. And at its centre will stand the Burj Mubarak Al-Kabir – a 1,001 metre high skyscraper set to be the tallest in the world. With a price tag in the region of $132bn, Madinat al-Hareer is a substantial investment, but one set to significantly benefit Kuwait as it unlocks the economy at the north of the country and generates other significant infrastructure projects in the form of new rail and road connections.
External to the country, Kuwait’s primary focus of investment has been towards China, where it has put money into a variety of business and social amenity projects. Perhaps most notable to the Kuwait’s interests is a joint project being undertaken by Sinopec and Kuwait Petroleum Corporation that will see the construction of a $9.3bn refinery on the island of Donghai Island in southern Guangdong province.
Capable of refining up to 300,000 barrels of oil a day – puting Kuwait on the map with the top oil refining countries – the new facilities will help provide China with the lifeblood to continue expanding its manufacturing assets. Kuwait, in return, will continue to enjoy healthy growth in its oil exports to China, a market that has already grown by over 50 percent over the past year. The new facility will help cement this arrangement going forward and is likely to be the first of many ties between the two countries.
Promoting diversification
Kuwait is not the only nation looking to build strong partnerships. With its fossil fuel deposits depleting, Bahrain has invested in diversification. The establishment of the Bahrain Grand Prix Formula One motor race as a regular fixture in the country since 2004 has helped bring media attention to the Kingdom, and its partly on the back of this that the Bahrain Economic Development Board hopes to further establish itself as the automotive capital of the Middle East.
The industry already accounts for around 16 percent of the Kingdom’s GDP. This will now be supported by a new nanotechnology centre to support R&D and a new $200m solar power plant, due to be completed this year. Along with expanded freight capacity at Bahrain International Airport and $2.9bn committed to logistics and infrastructure improvements, Bahrain is set to have the necessary means to dominate the region’s car production in the coming years.
At such an exciting point in the evolution of Gulf economies, World Finance’s GCC Investment & Development 2012 Awards pays tribute to the investment bodies and companies within the Gulf region who are driving forward this new era of prosperity. The winners of these awards are the leading lights in the region, whose business presence, if limited to the Gulf now, will almost certainly be felt all over the world soon.
GCC in the driving seat | World Finance
-----------------------------------------------------------------------------------------------------------
In the past years the growth of GCC countries have been almost without equal in the world. This is a thread dedicated to shed some light on the reality of the situation on the ground in regards to GCC countries and correct the misunderstanding that GCC countries are composed of idiots who don't know what to do with their countries. I hope this will correct some negative misconceptions held in the forum regarding our countries.
As the majority of the world’s economies struggle, there are still regions with growing economies and vast business potential. At the forefront of this pack are the GCC countries who are making award-winning progress
It’s a cruel set of circumstances that casts the nations of the Gulf Cooperation Council in such good health. With Europe struggling to implement austerity, the US economy at crawl pace and even China’s mighty growth hitting a few speed bumps, the Gulf states are enjoying booming economies thanks to their abundance of fossil fuel sources.
The near solitary nature of the region’s success has apparently fostered an increased sense of solidarity among GCC members. The organisation has strengthened its identity over the past year, negotiating as a unified body a series of trade agreements that secure vital imports to the region. Going forward, discussions have begun to bolster the GCC’s role in the defense of the Gulf, with the possibility of the council taking on the role of a regional security body with its own defense force to protect joint interests akin to the African Union or NATO.
Recent talks have also focused on ensuring common economic aims, with work done towards the simplification of trade between nations. In spite of the example set in Europe, talks have also continued into the possibility of GCC nations entering into a joint currency in the future. This move, though some way off, would transform the GCC into a powerful economic body able to compete with the largest of the world’s economies.
At such an interesting time for the region, World Finance’s GCC Investment & Development 2012 Awards offer the opportunity to assess the particular activities of individual nations and see how they are applying their wealth.
Saudi strength
Saudi Arabia, the largest of the GCC members in terms of geography, has been the most vocal in its support for strengthening the organisation. The Saudi administration appears to value a close relationship between GCC members as a way of improving its negotiating position when dealing with its western allies in Europe and the US both in politics and trade. And the Kingdom seems keen to strengthen the reason it enjoys such Western support. Of a recently announced $107bn of state investment projects, a sizable chunk will go towards bolstering the country’s highly profitable oil industry, supporting plans to further improve refinery capabilities.
This is an area of continuous investment for Saudi Arabia, receiving around $63bn in investment in the past five years alone. But it’s an investment that pays for itself. Demand for oil is increasing sharply and China’s predicted five percent rise in daily oil consumption this year alone represents one sixth of Saudi Arabia’s total daily production. As one of the few countries with spare oil production capacity, Saudi Arabia can be sure that investing in increasing production levels will most certainly pay for itself as well as yield increased influence on world powers dependant on black gold.
Saudi Arabia’s energy investment is not solely focused on oil. As construction continues on a plethora of new city-scale conurbations in the kingdom, every opportunity is being made to explore other forms of power generation. Plans under consideration would see the construction of 16 nuclear power stations, a range of water desalinisation plants, as well as exploration into solar power schemes. These measures will help the Kingdom meet its expected 120 gigawatt electricity requirement by 2030 – three times its current usage – while preserving its fossil fuel reserves for export markets.
Building an infrastructure
One of the most radical transformations witnessed over the history of the GCC Investment & Development Awards has been that of Qatar. The state’s victory in securing the football World Cup for 2022 has been a catalyst for development that has gone far beyond the required stadiums for the event. With the state’s population doubling to 1.4 million since 2004, it has been an uphill climb to ensure the country keeps pace with the new demands this has created. Foremost of these has been the need to radically increase the amount of housing in the state. One attempt to tackle this issue has been the $5.5bn redevelopment of 350,000sq. m at the centre of the state’s capital, Doha. This alone is expected to create homes for over 27,000 people, as well as new schools, hotels and amenities.
Qatar is also in the process of significantly upgrading its infrastructure systems and in particular its rail network. The massive Qatar Integrated Railway Project is due to see the construction of four metro lines, a tramway, commuter and freight rail services, high-speed inter city lines and an international rail line to run along the proposed Qatar Bahrain Causeway that will link the two countries. The total cost of the project is expected to be in excess of $35bn, with the first multi-billion-dollar contracts for tunnelling work allocated in the early part of 2012.
On a more fundamental level, work is also underway to improve the state’s food production levels. Currently, Qatar imports around 90 percent of its food. As a step to alter this, Crown Prince Sheikh Tamim bin Hamad bin Khalifa al-Thani established the Qatar National Food Security Programme in the early part of 2012, with the aim of doubling the number of farms in the state from 1,400 to around 3,000. Combined with new agricultural techniques and technologies, it’s believed the state could produce as much as 60 percent of the food it requires.
Pumping gas
Much of the funding required for these projects comes from the sale of the state’s prolific supply of natural gas, which it exports in liquefied form. In spite of the strength of this industry, there is currently a drive in place to diversify the Qatari economy. The state has traditionally relied upon its petroleum products, and in particular liquefied natural gas, to generate the most substantial part of its revenue. Recognition is growing that such natural resources are finite. As a result Qatar is looking at various ways to remodel its economy.
One plan has been to ensure the right conditions and facilities required to turn the state into a financial centre for the Gulf region. The Qatar Financial Centre Authority already operates a significant loan service to the region, offering $1.2trn of funds towards supporting development projects across the GCC region.
The state has also shown interest towards technological development with the aim of becoming the region’s Silicon Valley. To achieve this, observers suggest the state should adopt a series of economic free zones that would promote the tech industries through decreased taxation and legislation. These would compliment other recent developments such as the Qatar Science and Technology Park, which has already attracted Research and Development (R&D) projects from a range of international companies including Microsoft and ExxonMobil. This is set to be an interesting growth area in Qatar going forward and one the GCC Investment & Development Awards plans to follow closely in the future.
Lasting relationships
In contrast to the development in Qatar, the United Arab Emirates (UAE) is in a state of mixed fortunes. The UAE’s property market – once an area for major investment – remains in a state of recovery after the collapse of the Dubai market in 2009. Prices have fallen by as much as 20 percent and opinions remain divided whether prices will stabilise or further drop away. Since this occurrence, the UAE has focused on power and communications infrastructure investments. Along with exploring renewable energy possibilities, the UAE aims to be one of the first places in the world to roll out a full 4G mobile phone network. This will allow users with a compatible handset the ability to access mobile internet speeds ten times faster than current systems; a service of substantial benefit to both the financial services industry as well as the population at large.
To accomplish this, the UAE has invested $21bn in a range of Pakistani-based telecoms companies, strengthening the ties between the country and the emirates. With Pakistan poised for substantial economic growth in the coming decade, a strong relationship founded now will prove of huge benefit to the UAE when vying for larger investment opportunities in Pakistan. This is a relationship very likely to become prominent in the coming years and will likely form a part of the focus in the GCC Investment & Development Awards in the future.
In Oman, the benefit of its long standing Vision 2020 programme has come to be realised.
Spurred by the low price of oil in the later-1990s, the country began plans to broaden the scope of its economy. Some of these are now coming to fruition. The country’s positioning on the Arabian Sea has made it a key location for shipping in the Gulf region. The continued development of the country’s port infrastructure has helped sustain growth in this industry, with over $1bn of fresh development confirmed during 2011.
Oman is also seeking to improve the revenue it generates from tourism. To assist this and as part of a region wide drive to improve transportation, the country has already invested $100m in upgrading its air traffic control systems and is now engaged with a $1.2bn upgrade to its central air hub, Muscat International Airport, with the aim of tripling its annual passenger capacity to 12 million people.
Chinese ties
Of the GCC members, Kuwait has perhaps seemed the most cautious as a result of the economic climate. Such impressions will be altered sharply as the work of the Mega Projects Agency – the executive arm of the Kuwaiti Ministry of Public Works – begins to take shape. Their central project is Madinat al-Hareer or City of Silk; a 250sq. km city on the opposite shore of Kuwait Bay to Kuwait City. Designed to be a transportation and tourist hub, Madinat al-Hareer will also become the home to 750,000 people. And at its centre will stand the Burj Mubarak Al-Kabir – a 1,001 metre high skyscraper set to be the tallest in the world. With a price tag in the region of $132bn, Madinat al-Hareer is a substantial investment, but one set to significantly benefit Kuwait as it unlocks the economy at the north of the country and generates other significant infrastructure projects in the form of new rail and road connections.
External to the country, Kuwait’s primary focus of investment has been towards China, where it has put money into a variety of business and social amenity projects. Perhaps most notable to the Kuwait’s interests is a joint project being undertaken by Sinopec and Kuwait Petroleum Corporation that will see the construction of a $9.3bn refinery on the island of Donghai Island in southern Guangdong province.
Capable of refining up to 300,000 barrels of oil a day – puting Kuwait on the map with the top oil refining countries – the new facilities will help provide China with the lifeblood to continue expanding its manufacturing assets. Kuwait, in return, will continue to enjoy healthy growth in its oil exports to China, a market that has already grown by over 50 percent over the past year. The new facility will help cement this arrangement going forward and is likely to be the first of many ties between the two countries.
Promoting diversification
Kuwait is not the only nation looking to build strong partnerships. With its fossil fuel deposits depleting, Bahrain has invested in diversification. The establishment of the Bahrain Grand Prix Formula One motor race as a regular fixture in the country since 2004 has helped bring media attention to the Kingdom, and its partly on the back of this that the Bahrain Economic Development Board hopes to further establish itself as the automotive capital of the Middle East.
The industry already accounts for around 16 percent of the Kingdom’s GDP. This will now be supported by a new nanotechnology centre to support R&D and a new $200m solar power plant, due to be completed this year. Along with expanded freight capacity at Bahrain International Airport and $2.9bn committed to logistics and infrastructure improvements, Bahrain is set to have the necessary means to dominate the region’s car production in the coming years.
At such an exciting point in the evolution of Gulf economies, World Finance’s GCC Investment & Development 2012 Awards pays tribute to the investment bodies and companies within the Gulf region who are driving forward this new era of prosperity. The winners of these awards are the leading lights in the region, whose business presence, if limited to the Gulf now, will almost certainly be felt all over the world soon.
GCC in the driving seat | World Finance
-----------------------------------------------------------------------------------------------------------
In the past years the growth of GCC countries have been almost without equal in the world. This is a thread dedicated to shed some light on the reality of the situation on the ground in regards to GCC countries and correct the misunderstanding that GCC countries are composed of idiots who don't know what to do with their countries. I hope this will correct some negative misconceptions held in the forum regarding our countries.
