LONDON: Arab economies need to break down barriers and start to work together if they are to stand any chance of creating the millions of jobs they need to grow, the World Economic Forum in Davos heard.
Regional economies are estimated to have grown by just 1 percent for 2019 as a weaker oil price, geopolitical threats and the impact of global trade wars have hurt output.
But a panel of Middle East business leaders and ministers called for more efforts to break down barriers and slash red tape in order to create the sort of economic growth needed for meaningful job creation.
“We forget sometimes employment is a result of economic growth — you can’t create jobs without economic growth,” said Alain Bejjani, the CEO of Majid Al Futtaim Holding, the Dubai-based retail conglomerate that operates malls across the Middle East.
He said that most global growth was creates through regional trading blocs but that this model had not yet worked successfully in the Middle East.
“If you look at the ASEAN region as an example — it has 56 percent of its trade happening within the region. I think you’ll be surprised when I tell you that only 16 percent of the trade in the MENAP region is within the region. If you take oil out it is less than 5 percent. So in reality this region doesn’t work together. It works with the world but not with each other.”
Bureaucratic processes have also stymied growth according to Majid Jafar, the CEO of UAE-based Crescent Petroleum.
“Registering a company can take more than a year in some countries,” he said. “So how can we make that quicker? Look at what is standing in the way and how can we improve it.”
The Middle East and Central Asia is expected to record 2.8 percent growth in 2020, the IMF said on Monday. That was slightly lower than its October outlook and reflecting the latest move by the OPEC+ group of oil producers to extend supply cuts. It expects the region to pick up speed in 2021 with growth of 3.2 percent.
Arab states work with the world but not with each other, Davos hears
https://arab.news/z9med
Arab states work with the world but not with each other, Davos hears
- Majid Al Futtaim CEO Alain Bejjani: I think you’ll be surprised when I tell you that only 16 percent of the trade in the MENAP region is within the region
- Alain Bejjani: We forget sometimes employment is a result of economic growth — you can’t create jobs without economic growth
Saudi business optimism holds firm above 60 on non-oil strength
RIYADH: Saudi Arabia’s Business Confidence Index held at 61.6 points in January, reflecting sustained optimism across the Kingdom’s non-oil sectors, official data showed.
The index slipped 0.6 percent from 62 points in December, the General Authority for Statistics said, but remained well above the neutral 50 threshold, indicating continued expansion in business sentiment.
The sustained momentum in the BCI underscores the progress made under Saudi Arabia’s Vision 2030 agenda, which seeks to diversify the economy by reducing reliance on crude revenues.
“The index continues to reflect prevailing optimism in the business sector, supported by establishments’ confidence in the stability of economic activity and the continued growth across various sectors,” said GASTAT.
According to the report, the BCI for the industrial sector recorded 61.7 points in January, maintaining an optimistic level despite a slight decline of 0.8 percent compared to the previous month.
The slight decline in the industrial sector was driven by weaker confidence around current input costs and expectations for the coming month.
In January, the BCI for the services sector recorded 61.3 points, marginally down 1.2 percent from December, due to a limited decline in confidence related to input costs for the current month and expected inputs for the coming month.
The construction sector’s BCI stood at 61.6 points in January, marking a slight fall of 0.3 percent compared to the previous month.
“The marginal decrease (in the construction sector) is attributed to a limited decline in confidence among construction sector establishments, particularly with regard to input costs for the current month and expected inputs for the coming month,” added GASTAT.
Earlier this month, the Riyad Bank Purchasing Managers’ Index compiled by S&P Global showed Saudi Arabia’s PMI at 56.3 in January, driven by output growth, improving market conditions and stronger demand among non-oil businesses.
A separate January report by Standard Chartered forecasts Saudi Arabia’s economy will expand 4.5 percent in 2026, supported by sustained momentum in both hydrocarbon and non-oil sectors. The bank expects non-oil growth at a similar pace, driven by investment and consumption.
