In the "Saudi Vision 2030," Saudi Arabia has set three main vision goals: to be the heart of the Arab and Islamic world, a global investment powerhouse, and a hub connecting Asia, Europe, and Africa. And they welcome more talented and skilled foreigners to join the Saudi workforce.
The Gulf region is one of the richest and most economically dynamic regions in the world. The price of Brent crude oil had recovered and exceeded $90 per barrel, and by selling oil, an investment of up to $3.5 trillion would be used to support indigenous AI models, build new desert cities, and enrich the sovereign wealth funds of some Gulf states. The bombing upsets what had been a stabilizing situation in the past few months, with the price of Brent crude back to highs and more open economic policies being introduced across the region. The Syrian president's visit to China and the ups and downs of international crude oil prices have brought the economic development of the Middle East back to people's vision. Where will the new Middle East economy go?
1. Chinese enterprises go to sea, Saudi Arabia becomes a hot gold mining site
In 2016, Crown Prince Salman, the de facto ruler of Saudi Arabia, launched a radical national transformation plan: "Saudi Vision 2030", which sets out three vision goals for Saudi Arabia: The heart of the Arab and Islamic world, a global investment powerhouse and a hub between Asia, Europe and Africa, while welcoming more talented and skilled expatriates to join the Saudi workforce in order to diversify the country's economy away from over-dependence on oil and achieve sustainable development.
Now, real estate, re-export trade, financial services and tourism have replaced oil as its pillar industries, and the booming digital economy is the next frontier. Careem for taxis, Noon for e-commerce, Jahez for take-out, Nana Direct for fresh food, Mrsool for errands, stcpay for payments and even products for Muslims to do homework have all become apps that people in the Middle East cannot do without every day. The Middle East today is like China in the early years of reform and opening up in the 1980s, in a golden age of rapid development, opportunities are everywhere, and it is increasingly favored by migrant workers from all over the world.
As oil production increases and other industries continue to recover, the economies of many Middle East countries will achieve rapid growth in 2022, with strong growth momentum in some industries. In the context of the current global energy transition, Gulf countries have also introduced economic transformation plans to promote the transformation from an energy-dependent economic structure to a diversified economy. In addition to reform in the field of energy, non-oil industries such as manufacturing, digital economy, biomedicine, and new materials are also key areas of its transformation. Gulf countries continue to improve their business environment and actively expand cooperation with other countries and regions, which will bring huge investment opportunities for Chinese enterprises to expand their business in the Middle East.
2.Asian business trend, Indian companies flock to UAE
In the Middle East, the UAE is seen as a "relatively neutral and stable foothold" for India. To live in Dubai is to participate in Indian business. The Bank of Baroda, which dominates Dubai Bay, is perhaps the most visible financial institution here, and it is an Indian state-owned bank. Many of these companies have significant presence in the United Arab Emirates. Relations between India and the UAE have warmed rapidly in recent years, and over the past decade, as the global economic center of gravity has shifted eastward, Asian emerging economies have become an important driving force for the UAE's economic growth, and economic and trade ties have deepened.
There is a large diaspora behind these multinationals. There are 3.5 million Indians living in the UAE compared to 1.2 million locals. Many people in Mumbai joke that ABU Dhabi and Dubai are now the cleanest Indian cities. For the UAE, India is a source of food, gems, jewellery, leather, people, medicines and investment opportunities. For India, the UAE is an important source of capital, and an increasing number of Indian companies can efficiently connect to global markets here, not only the high level of national consumption, but also as an international logistics hub, the gateway for Indian goods to the Middle East, Africa and Europe. It is also an important puzzle for India to achieve the goal of $1 trillion in exports by 2030 and build a diversified map of commercial diplomacy.
3.A "new Middle East" is emerging
After a decade of suffering from the Arab Spring, the countries of the Gulf region are entering a new era, and a "new Middle East" is emerging. The implementation of economic reform at home, the promotion of "reconciliation" abroad, and the search for an independent position in the international arena are the main features of this new era. Although the Middle East continues to struggle, in recent years, some countries in the Gulf region have shifted the focus of their national strategies to economic construction. In 2023, the momentum of "overall relaxation and local turbulence" in the Middle East is likely to continue. Despite uncertainties, relations among countries in the region are expected to continue to improve. At the same time, Western powers will step up their influence on the Middle East and speed up the pace of adjusting the Middle East policy. As the political ecology of the region continues to change and China-Arab relations continue to warm up, the pace of Middle East countries from "looking east" to "heading east" will accelerate.
Economic inequality in the Middle East is much greater today than people remember. From Israel and the West Bank, to Saudi Arabia and Yemen, modern, economically advanced countries stand next to desperate ones. Lebanon is Mired in a financial crisis; Egypt could follow suit. The competition between Saudi Arabia and the UAE to build leading business hubs will intensify, but it will also create new opportunities for cooperation and joint ventures. However, business conditions in Syria, Yemen, Iraq, Lebanon and Iran remain extremely challenging due to low growth prospects, high unemployment, social instability, international sanctions and conflict.
There are still many uncertainties in the development situation of the "new Middle East" economy, but often new opportunities will appear in the change, with the economic transformation of the Middle East, opportunities and challenges coexist. May there be less war and more peace in the world, and we look forward to the day of peace and stability in the Middle East and successful economic transformation.
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