Growth of Middle Eastern Economies: What’s the next growth driver?

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It is the wonderland of the world, where oil is literally the growth engine of most of the countries. The region is beautiful with vast stretch of glaring brown deserts and sand dunes with a puddle of oasis amidst them. This article would provide a brief overview of how MENA (Middle East and North Africa) or the MEA (Middle East Asia) would be an excellent spot in the years to come.

Analyzing numerically, the data from reputed sources such as World Bank and IMF suggests that the GDP of all Middle Eastern countries have grown in a healthy manner. Apart from that, the per capita of most of the countries are quite high. To complement that, Qatar has one of the highest per capita GDP close to 60,000 USD in 2016 (World Bank). This is on par with the developed countries of the world such as US and Singapore. The UAE (United Arab Emirates) has seen a substantial change in the aura of the scenario making it a dream for many people in the world.

The tangential growth of expats and the ever-growing Airlines such as the Emirates and Etihad has contributed extensively to travel industry and investments. The duty free zones of Dubai have made it lucrative for the entire world and is one of the largest Airport retailers. On the other hand, Saudi has also grown equally with the help of Aramco which is one of the largest energy companies in the world. The countries such as Syria, Iraq and Iran are yet to recover from the internal conflicts. But these countries have the potential to be the hubs for trade in the future.

Israel is also constantly growing tackling some of the domestic issues. Bahrain and Kuwait are growing steadily (Based on Last analyzed Growth Data i.e., in 2015, nearly 2% for Kuwait and almost 3% for Bahrain). Egypt has the potential to be an amazing tourism center for the entire planet and the forecast of WTTC (World Travel and Tourism Council) are positive on most of the indicators. Oman has also seen a huge jump in numbers during the 1990s due to the rise in exports of oil and other commodities. It also possess a controlled rate of inflation nearing 1%. All other countries in the region are in the track for growth in the long term, with a need for efforts from business and government equally.

So, what is the next growth factor for MEA apart from oil? The recent news suggest a lot of positive changes emanating from Middle East. The appointment of Minister of Happiness in Dubai, shows the positive mindset accumulating in the UAE. The presence of service industries and hospitality industries is a testimony of a growing economy in Dubai as the number of tourists are increasing and Dubai is becoming one of the most favorite places on Earth. Apart from the modern Dubai, Abu Dhabi is also garnering popularity among the foreigners as one of the places in their bucket list.

Elsewhere, Saudi has started its efforts in planning investments of trillions of dollars into infrastructure development and connectivity. This is a huge improvement along with the news of freedom for women to drive cars. The countries have realized that oil is not a lone sustainable business for the world to thrive in the future, due to the extensive use of alternative sources of energy. Germany is one of the countries who might meet almost 50% of their requirement with renewable sources.

The recent news of Saudi Arabia willing to grant citizenship to Robot suggests that the importance of AI, latest technologies and robotics is vital for them. The world has seen a paradigm shift in terms of usage of new technologies and energy. Apart from these, companies like Emirates, Qatar Airways and Etihad are investing abroad, thus diversifying the portfolios, which would help the growth of Middle East in terms of global presence.

One such example, is the sponsoring of events and sport clubs such as Real Madrid or Arsenal or Barcelona. The future would likely see the countries improving on connectivity amidst them, sorting out temporary tensions in the region. The diverse culture among the neighbors can be one to savor. The region can act as channel/logistic centers for transporting the goods which would earn them a fortune. The demography is an advantage for MEA as almost 30-35% of the population is young, which indicates that the drive for growth is immaculate and could be prospective in the future. Thus, MEA can be an exciting part of the world in the future and a lot depends on the policies as well.

If you have any ideas/opinions, kindly comment. Let’s discuss!!

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