Arab world (116)
UAE, Saudi central banks roll out $40 billion stimulus for virus-hit economies
01 Apr 2020 Written by Admin AdminThe central banks of the United Arab Emirates (UAE) and Saudi Arabia, the two largest Arab economies, on Saturday announced stimulus plans worth a combined $40 billion to ease the impact of the coronavirus outbreak in their respective countries.
The UAE regulator plans to support banks and businesses in the country, where the outbreak is affecting major economic sectors such as tourism and transport, with a 100 billion dirham ($27 billion) economic plan, it said on Saturday.
In a separate statement, the Saudi Arabian Monetary Authority said it had prepared a 50 billion riyal ($13.32 billion) package to help small and medium-sized enterprises (SMEs) cope with the economic impacts of coronavirus.
The disease has so far infected 85 people in the UAE and 105 in Saudi Arabia.
The Saudi funding aims to grant SMEs six-month deferrals on bank payments, concessional financing and exemptions from the costs of a loan guarantee program, SAMA said.
Concerts, sporting events and industry conferences have been canceled or postponed in the past few weeks in the UAE to contain the spreading of the new coronavirus.
In Dubai, the Middle East’s trade, finance, tourism and transportation hub, some businesses have started to feel the pain from the global travel slowdown caused by the outbreak.
Saudi Arabia, which has already suspended the Umrah pilgrimage and locked down its eastern Qatif region where many infections are located, plans to halt all international flights for two weeks from Sunday.
The UAE central bank said it will provide 50 billion dirhams through collateralized loans at zero cost to all banks operating in the UAE while an additional 50 billion dirhams will be freed up from lenders’ capital buffers.
“The CBUAE is allowing banks to free-up their regulatory capital buffers to boost lending capacity and support the UAE economy,” it said in a statement.
It said the scheme offers banks relief for up to six months from the payments of principal and interest on outstanding loans for affected private sector companies and retail customers.
Committed to peg
Adding to a likely economic slowdown caused by the virus, Saudi Arabia and the UAE are also expected to face wider fiscal deficits this year because of lower oil prices, due to an oil price war between Riyadh and Moscow.
The Gulf states’ currencies, which are pegged to the U.S. dollar, weakened in the forwards market last week.
The UAE regulator said on Saturday it maintained its commitment to the peg for the dirham, and said foreign currency reserves amounting to 405 billion dirhams as of March 10 were “adequate” to safeguard the stability of the currency.
Other measures introduced by the UAE central bank on Saturday include reducing by 15-25% the amount of capital banks have to hold for loans to SMEs, and better terms for first-time home buyers.
Importantly for the local real estate sector - which has been struggling in Dubai for the past decade - banks will be allowed to increase their exposure to real estate loans.
“When the exposure reaches 20% of the banks’ loan portfolio (measured by risk-weighted assets), banks will be allowed to increase it to 30%, but will be required to hold more capital,” it said.
The central bank also introduced regulations which reduce banking fees for small companies.
The Dubai and Abu Dhabi stock exchange indices dropped last week amid coronavirus concerns and because of tumbling oil prices.
To contain volatility in the markets, the central bank said it plans to issue guidelines on margin calls, asking banks to request additional collateral before liquidating stocks in the event of a market downfall.
source: cnbc
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If there is one pastime that people in the Middle East are unlikely to give up, it is watching television. In 2018, the daily time spent watching TV per capita in the region was 6 hours and 20 minutes according to Statista, more than double the global time of 2 hours and 48 minutes.
But this is set to decline to 6 hours this year as users in the region switch from watching their shows on traditional television sets to streaming them online.
Between 2013 and 2019, the number of people watching television offline dropped from 98 per cent to 86 per cent in the Middle East and North Africa (Mena) according to the Media Use in the Middle East report.
This drop has been driven by cheaper and faster internet connectivity and the rise of video on demand (VOD) and streaming services, also known as over-the-top (OTT) players.
As a result, the space has become more competitive, but the penetration of these services in the region pales in comparison to other parts of the world.
Starzplay, a UAE-based subscription VOD service partly owned by Lionsgate, launched in 2014 in response to rising demand for good quality content. Now, the company has the biggest market share in the subscriptions market with 29 per cent compared to US-based Netflix which has the second largest share in Mena with Wit24 per cent, according to the IHS Markit in its Pay TV & Online Video Report Mena 2019.
Netflix arrived in the Middle East in 2016, giving the industry a boost and bringing with it a sense of credibility and awareness of subscription-based streaming services.
Telecommunication and pay TV operators like OSN have launched their own OTT services as a way to maintain market share, while the parallel launch of Apple TV+ and Disney+ into the streaming television space last November in the US poses the threat of even more competition once they are launched in Mena.
“It is not a ‘one player wins it all’ business, different providers complement each other. OTT subscription prices allow customers to have more than one service.
It is a great time to watch content,” says Danny Bates, co-founder and chief commercial officer at Starzplay.
The online subscription video market is pursuing the same growth pattern that the pay TV market had followed in the region.
By 2023, online video subscriptions will reach almost five million, while revenues will reach $416 million according to the IHS Markit report.
Much of the demand for streaming services is coming from the UAE and Saudi Arabia which together account for 49 per cent of the total subscriptions in Mena. The demand for online streaming subscriptions is likely to overtake pay TV subscriptions like OSN and beIN by 2025.
However, streaming services need to have premium content from the biggest studios in the world in order to stand a chance to compete and bring customers on board, and content remains an expensive product.
Additionally, the significance of telling relevant stories catering to Mena audiences is becoming key, hence the surge in investment in original content production.
Earlier this year, Shahid, MBC Group’s streaming platform relaunched, announcing a partnership with Disney and Fox to bring more than 3,000 hours of content to the biggest streaming library of Arabic content.
“Over the next two years, we aim to substantially increase the size of our investment into drama productions, thus increasing them fourfold, of which the majority will be original and exclusive content,” says Marc Antoine d’Halluin, group chief executive at MBC Group.
Netflix has also increased its original content offerings for Arab audiences while Starzplay recently announced a partnership with Academy Award-winning media and entertainment company, Image Nation Abu Dhabi, to create its first original content series.
Jawwy TV, an OTT platform launched in 2018 for the Mena region through Intigral, a digital provider of sports and entertainment, is seeking to make an impact in the way content is consumed in the region.
“Our roadmap is very intense, and we are trying to develop a product in order to match all the major OTT players in the world, but it will be dedicated for Mena content,” said Tony Saab, vice-president of products and content at Intigral.
The service continues to explore agreements with numerous players, in addition to creating original content and acquiring Arabic content.
As more users begin to consume content online, competition will no doubt intensify. One casualty of this growing competition was Malaysia-based iFlix, which pulled out of the Mena region two years after its launch in 2017, unable to replicate the success of its core market in South East Asia.
“Streaming services have just scratched the surface of the market in Mena, despite all the [high] numbers,” says Bates who believes that the market is still establishing itself, and businesses will have to continue to evolve and strengthen their product to meet the rising demand.
According to Bates, “iFlix never really came into the region, they had success in Asia, but they came to Mena with the exact model, while it is a different territory, people, culture and ways of doing business”.
For him, it was not about lack of market demand that caused iFlix to exit, it was unfit execution, something that every OTT player should bear in mind.
source: wamda
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GCC MAJOR SOURCE MARKET FOR OUTBOUND MICE TRAVEL SAYS REGIONAL EXPERT MICEMINDS
WINS ‘BEST INCENTIVE PROGRAM IN AN INTERNATIONAL DESTINATION’ ACCOLADE AT
THE MALT EXCELLENCE AWARDS 2020
Dubai, United Arab Emirates: The global MICE industry is anticipated to reach over $1.4 billion in the next five years and the Middle East remains at the forefront as one of the fastest-growing tourism generators globally and an important source market for any destination.
According to the team at MiceMinds, the UAE is the second biggest source market for outbound travel from the Middle East, surpassed only by Saudi Arabia. This growth has been buoyed by the growth of the regional airlines as well as the game-changing mindset of companies like MiceMinds who create bespoke incentive travel experiences that are personalized and designed to lead positive business results.
An ITL World Company, MiceMinds was lauded for their ‘out of the box’ thinking where they won the ‘Best Incentive program in an International Destination’ award at the MALT Excellence Awards last night. The official award show of the renowned Mice Arabia and Luxury Travel Congress (MALT), the MALT Excellence Awards highlight, honor and celebrate path-breaking achievements of top organizations and individuals, who have demonstrated exemplary initiatives in the field of Meetings, Incentives, Conferences, Events (Mice), Business and Luxury Travel from the GCC.
This particular award recognized this unique organization within the ITL World portfolio that uses incentive trips as a tool to stimulate and motivate employees and partners and reward those who have achieved certain goals in the company.
“When we won the TMC of the Year award last year we didn’t rest on our laurels so to be rewarded for a 2nd year in a row is a real honor especially for a part of our business that usually goes unrecognized. The core objective of MiceMinds is to help organizations strengthen their team and overall performance through one-of-a-kind travel and event experiences, and this unique accolade underscores our steadfast commitment to excellence in making the MICE industry bigger, better with more customization and innovation across the board,” said Rafeeq Mohammed, CEO of ITL World.
“Awards such as this are a wonderful endorsement of our unique approach to delivering exceptional experiences to our MICE clients and the resolute commitment and expertise of our team,” he added.
Since its official launch in 1998, ITL World has been assisting companies across the globe to make the most of what they spend on business and incentive travel.
source: uaenews247
World Bank Group Launches Initiatives Supporting Women Entrepreneurs
29 Feb 2020 Written by Admin AdminThe World Bank Group announced two new initiatives to improve access to start-up financing and e-commerce markets for women entrepreneurs, at the Women Entrepreneurs Finance Initiative (We-Fi) Middle East and North Africa (MENA) Summit.
“Starting and growing a business is one of the most powerful tools for women to overcome poverty and build better lives for themselves, their families, and their communities,” said David Malpass, World Bank Group President. “Removing regulatory barriers along with obstacles to access to finance and markets can give women-led businesses the opportunity to succeed.”
We-Fi, housed at the World Bank, has so far allocated close to US$250 million to tackle challenges women entrepreneurs face in developing countries. The allocations aim to reach 114,000 women entrepreneurs. We-Fi is a powerful catalyst for additional investment, helping mobilize more than US$2.6 billion in additional public and private sector funds.
At the We-Fi MENA Regional Summit, held during the Global Women’s Forum Dubai 2020, the International Finance Corporation (IFC) and We-Fi launched the ScaleX program to incentivize accelerators to support start-up businesses led by women. IFC research shows that women entrepreneurs in emerging markets face a daunting gender finance gap with only 11% of enterprises that actually attain seed funding being female-led. New research shows that despite women leading half the start-ups that participate in accelerators—entities designed to train and support the development of start-ups to become investment ready—they continue to face greatly unequal access to capital.
The program will incentivize emerging markets accelerators to work with women-led businesses by providing performance-based payments of US$25,000 for every woman entrepreneur that raises US$1 million from investors in start-up funding.
"We are launching the ScaleX program to help women entrepreneurs in emerging markets to access funding at a crucial stage to grow their businesses,” said Sérgio Pimenta, IFC Regional Vice President for the Middle East and Africa. “This is a win-win for accelerators, investors, and women entrepreneurs.”
The World Bank and UPS also announced today a new partnership to help women entrepreneurs in the Middle East and North Africa region to grow their businesses by assisting them in successfully leveraging e-commerce platforms.
“By making e-commerce platforms more accessible, this partnership addresses a key constraint faced by women business leaders in reaching new markets,” said Ferid Belhaj, World Bank MENA Vice President. “E-commerce platforms create opportunities, and we must ensure these opportunities are open to women-owned businesses across the region.”
UPS will provide e-learning modules on different e-commerce topics to help women-owned and women-led small and medium enterprises seeking to expand their businesses across borders.
The project will support an estimated 750 women entrepreneurs and will train a cadre of e-commerce advisors in each country who can provide tailored assistance and coaching to businesses. The partnership will work with entrepreneurs in Algeria, Djibouti, Egypt, Jordan, Lebanon, Morocco, and Tunisia.
We-Fi has made allocations to programs being implemented by the African Development Bank, the Asian Development Bank, the European Bank of Reconstruction and Development, the Inter-American Development Bank.
the Islamic Development Bank, and the World Bank Group. The World Bank and IFC We-Fi programs (US$75 million in allocations) are working with private and public partners in 24 countries via 27 investment and advisory projects to enable women entrepreneurs to access finance and markets and amplify those efforts with global research, partnerships, and policy advocacy.
The Women Entrepreneurs Finance Initiative (We-Fi) is a groundbreaking partnership that aims to unlock financing for women-led businesses in developing countries.
We-Fi’s partners include 14 donor governments, six multilateral development banks as implementing partners, and numerous other stakeholders in the public and private sector around the world.
We-Fi takes an ecosystem approach to removing barriers to women’s economic empowerment, addressing constraints and opportunities related to finance, market access, capacity and the enabling environment.
source: worldbank
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Badir-incubated technology startups raise SR508 million in 10 years
30 Jan 2020 Written by Admin AdminTechnology startups incubated by the Badir Program for Technology Incubators and Accelerators, one of the leading initiatives of King Abdulaziz City for Science and Technology (KACST), closed 2019 on a high note, raising a record SR236 million ($62.93 million) led by venture capital firms, individual investors, private companies, and governmental institutions.
The total funding for startups increased to SR508 million ($135.47 million) from 2010 until the end of December 2019 across 184 deals, according to a statistical report compiled by the Business Incubators and Accelerators Company (BIAC), which manages and operates the Badir Program.
The report revealed that venture capital firms were the most active in terms of funding size, investing SR 203 million into startups, equivalent to 40% of the total amount of funding and investment, while private sector companies provided SR 168 million, 33% of the total funding.
BIAC report further disclosed that the total financing by individual investors amounted to SR 104 million, 20% of the total amount of funding, followed by government institutions who invested SR 35 million, 7% of the total investment volume.
The increase in investments reflects the maturing startup environment in the Kingdom of Saudi Arabia and the continued and growing interest of local and international investors.
Furthermore, the number of startups incubated in the Badir Program rose to 655 companies since inception until the end of the third quarter of 2019.
The Badir Program offers one of the most important national and innovative environments in the field of entrepreneurship.
The Program was established in 2007 by the King Abdulaziz City for Science and Technology, to support and provide opportunities for technology- and innovation-based business enterprises.
Nawaf Al Sahhaf, the Chief Executive Officer of BIAC, said: “As the startup environment is thriving in Saudi Arabia, we have seen more of the startups succeed in receiving significant investments from several investors.
The success of startups provides an incentive for encouraging and enhancing the entrepreneurship environment in the market."
When the Badir Program incubates a technological startup company, it facilitates funding by providing a platform by connecting investors and entrepreneurs through its annually-held "Projects Presentation Day" program.
A state-owned subsidiary of the Saudi Technology Development and Investment Company (TAQNIA) – owned by the Public Investment Fund (PIF) – BIAC operates and manages entrepreneurship support platforms, innovation and technology transfer programs.
It also offers project management and business support with specialized consultancy and training services.
Offering an array of services in over nine different cities in the Kingdom, BIAC operates and manages 10 incubators and 8 accelerators in various fields, most notably the Badir Program's 8 incubators in 7 regions.
In addition, BIAC manages and operates the Saudi Innovation Center for Water Technology Program; the Fast Track to Innovation Program; the Innovation Center for Industry 4.0; the KAMIN Program for raising industrial capabilities and enhancing the capabilities of small- and medium-sized industrial enterprises; the Industrial Establishments Accelerator; Haramein Technology Accelerator; Badir Accelerator, and the Inventions Transfer Accelerator.
source: saudigazette
Middle East’s digital transformation laggard status may be a benefit
30 Jan 2020 Written by Admin AdminUnencumbered by heavily customized legacy systems, Middel East enterprises may have a clearer path toward leveraging IT to overhaul how they do businesses than companies on other regions.
Is the Middle East lagging behind in digital transformation? To a large degree, it depends on which metrics are used to measure digital transformation, and your perspective on how far along enterprises in the rest of the world are on the path to fundamentally change how they use technology, human resources and business processes to improve their performance and value to customers.
Overall, investment in IT in the Middle East and North Africa (MENA) is growing, with spending in the region having been projected by Gartner to rise 1.8 percent to reach US$160 billion in 2019. Spending on areas of enterprise IT often associated with digital transformation is rising significantly, with sales of software as a service expected to jump by 25 percent during the course of last year.
Spending is expected to jump by 19 percent to reach nearly US$3 billion for CRM, and to increase by 12 percent to hit $1.2 billion for BI, analytics, and advanced analytics (including AI).
Despite the growth of SaaS in the region, MENA still falls below the global average for cloud spending as a percentage of the total enterprise IT budget. "They are six to seven years behind U.S. spending on cloud – some of that is lack of availability of hyperscale cloud providers, and we are also facing in this region a preference for on-prem," said John Lovelock, a research vice president at Gartner.
Cloud ERP, for example is still in the $300 million range for the region.
"It's a decent growth rate but not what we see in the rest of the world -- at a certain point we're going to need to see 100 percent to 200 percent growth rates to get cloud into the range of the rest of the world," Lovelock said.
Cloud spending is not a direct indicator of digital transformation, but the cloud does form part of the fabric that allows digital transformation to take place.
In the 2019 IMD Digital Competitiveness Ranking, only the UAE, Qatar and Saudi Arabia really featured, with the UAE placing 12th overall.
Digital transformation is a global struggle
While these statistics paint a picture of more work to be done, they also do not fully represent the global realities.
There is an assumption that enterprises in the rest of the world are well on the road to digital transformation, said Ahmed Hasan, global head of Customer Engagement Marketing at Spark44, a provider of content and community management, CRM, data planning and marketing services for businesses. "But in our experience, this is very much not the case.
Many other regions are struggling with synthesising digital transformation into meaningful valuable customer experiences or even into an operational efficiency."
Hasan adds that it is therefore in some respects an advantage to be a laggard in the area of digital transformation. He believes that "slow to adopt" regions can actually benefit from the experiences and realities faced elsewhere to identify transformation projects that are more likely to have a greater chance of sustained success.
The Middle East is better positioned for digital transformation than many other regions because it is not over-encumbered with complex legacy IT systems that have been heavily customised over time, according to Alan Pelz-Sharpe, founder of research and analysis consultancy Deep Analysis and author of bestseller "Practical Artificial Intelligence - An Enterprise Playbook."
"It is easier to leapfrog innovation when you have a fairly basic starting point tech-wise. Clearly Dubai is leading the charge in the Middle East; its Smart Dubai initiative, though very ambitious, has set the tone for others to follow."
Smart Dubai, the government entity entrusted with driving Dubai's digital transformation projects, already has for example a mature blockchain strategy, launched in early 2016, which has made the city a global leader in blockchain in government, with some signature projects such as DubaiPay, an online payment portal.
The Middle East is at various stages of the digital transformation journey, said Shady Fathalla, business Development Manager at Ciklum, a custom software development company headquartered in London with an office in Dubai. Fathalla explains that the Gulf Cooperation Council countries of Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman, are under pressure to diversify their oil-based economies and have announced several initiatives and directives to transform the societies and the governments.
Governments help drive digital transformation
Digital transformation is at the heart of many of the forward-looking initiatives put in place by the governments of the region, such as the Saudi Vision 2030, the New Kuwait 2035 Vision, the Qatar National Vision 2030 and the UAE's 2021 vision.
Fathalla believes that countries like the UAE and Bahrain are leading in terms of digital transformation, especially in the e-government and financial sectors, but Saudi Arabia, Qatar, Kuwait, Oman and Egypt are also taking remarkable steps forward.
"The Dubai Government – which is a pioneer in Government digitalisation – has announced its last paper transaction to be in 2021. What's more, the citizens themselves are also playing a big part of the Middle East's digitisation journey," Fathalla said. "As measured by digital consumer adoption, the UAE, Qatar, and Bahrain are among the top countries in the world when it comes to digital readiness, with more than 100 percent smartphone penetration and more than 70 percent social media adoption," Fathallla said.
Fathalla adds that the oil and gas industry in the GCC is looking at digital transformation as a priority to increase efficiency and create competitive advantage in the oil and gas market. The CEO of Abu Dhabi's National Oil Company (ADNOC), Sultan Ahmed Al Jaber announced last year that "Industry 4.0" will be at the heart of ADNOC business.
"For us Industry 4.0 is utilising data and technology to really transform our business, to make it more efficient, and to empower our people," explained Abdul Nasser Al Mughairbi, senior vice president, digital function, at Abu Dhabi National Oil Company (ADNOC), in an interview with CIO Middle East.
The Middle East, though, is still at a stage where it needs to import the skills required to make digital transformation possible from other places, with countries like the UAE, Saudi Arabia and Qatar being the major investors in digital transformation infrastructure and expertise, according to Bernado Jun, managing director of Spark44 Middle East and North Africa.
Culture can hold back transformation
"The Middle East is a diverse and geopolitically volatile region, with some markets lacking the infrastructure for digital transformation and other markets with the infrastructure but without the stability to have digital transformation at speed and at scale," Jun said.
"So, the region as a whole is lagging behind, although some countries are investing heavily with the ambition to be leading countries in digital transformation in the near future," he added.
One challenge holding back digital transformation is the way trust and honour function as cultural concepts in the Middle East, said Annalisa Nash Fernandez, an intercultural strategist at BecauseCulture, a consultancy focusing on cultural elements in technology and business strategy. "Trust is deeply rooted in long-term social relationships, like in Asian cultures, which is why influencer marketing has proven so successful in the region," Fernandez said. "Influencers have replicated values of trust and personal relationships in a digital context" in the Middle East, Fernandez said, adding that once enterprise leaders do the same, digital transformation in the Middle East will catch up to, and likely surpass other regions.
Deep Analysis' Pelz-Sharpe also believes that the biggest factors impacting the region are cultural and people-related, rather than technological.
"The Middle East has access to the same technology as the rest of the world, however there are skills shortages that impact the rate of change that is possible."
Interest in digital transformation grows
Interest in digital transformation in the region, though, has encouraged Ciklum to extend its services to the Middle East, bringing its global delivery model for software services to the region. The approach allows clients to select appropriate talent from its large resources pool for software projects, and is being used by Middle Eastern startups as well as regional incubators and accelerators to increase the scale of digital transformation, Ciklum's Gathalla said.
Cikulm's Fathalla says that while the gap between the Middle East's digital transformation and that of the rest of the world is shrinking -- mainly due to government investments -- the story is a little different when it comes to the private sector.
He explains that investment in digital transformation is not at the required level, and contribution to the overall countries' GDP by digital business is lower compared to those in countries considered as leaders in digitisation and digital economies. "But this will improve over the coming years," he said.
Spark44's Jun cautions that companies in the Middle East needs to find the right balance between importing expertise and growing it internally. He says it is easier to import expertise to show short-term results and to showcase your "transformation credentials" by proudly communicating that one is working with a world-class consultancy. "However, for companies to be competitive in the long term, they need to invest in also nurturing and growing the talent at a local level," he said.
"Transformation by definition is a continuous process and one cannot expect to find the best answer for one's company only from the outside," Jun added, saying that that CIOs needs to be more invested in the company's human capital growth plan, working closely with the HR department to fine-tune recruitment policies and learning and development plans, based on the key skills that the company will need in the longer term.
Digital transformation is being tackled at a governmental and structural level, but more needs to be done to encourage the private sector to embrace this change and to take advantage of the opportunity to leapfrog in terms of innovation through learning from other countries.
source: cio
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Huge potential for digital growth in Mideast and North Africa region
30 Jan 2020 Written by Admin AdminThe Middle East has realised only eight per cent of its overall digital potential, compared with 15pc in Western Europe and 18pc in the US, a top Bahrain government official has said.
According to Information and eGovernment Authority (iGA) chief executive Mohammed Ali Al Qaed there is a lot of room for digital growth in the Middle East and North Africa (Mena) region, where just 8pc of small and medium enterprises (SMEs) have an Internet presence, 10 times less than in the US.
“Only 1.5pc of retail sales in Mena are online, which is five times less than the US. Digital comprises 4.1pc of the Middle East economy and its contribution to GDP is half that of the US,” he said.
The official was speaking during the BBK Digital Economy Forum and Expo 2020 at the Four Seasons Hotel Bahrain Bay.
Highlighting the Bahrain government’s vision for digital transformation, Mr Al Qaed said the kingdom’s internationally acknowledged successes in attracting investment to its information and communications technology (ICT) industry is built on the back of robust legislation and infrastructure that it has spent years building.
This landscape has allowed for the application of modern technologies in a range of areas and for the development of skills required to implement them.
“Dynamic, competitive markets and an innovative private sector are what drive digital economies,” he said.
“Our goal is for the private sector to take the lead in researching and developing emerging technologies; identifying and supplying innovative solutions; and creating opportunities to improve export revenues. We also welcome their contributions in helping us create even more digital-friendly economic policies.”
The drive to digitalisation is led by the vision of His Majesty King Hamad to make ICT investment a pillar for socioeconomic growth in the kingdom.
The official asserted that the government has helped to encourage innovation and stimulate economic growth through the formation of an artificial intelligence (AI) and emerging technologies governance committee and the passing of laws protecting personal data and electronic transactions.
This is in addition to providing an open data portal and formulating a comprehensive AI strategy in 2020 to enhance government performance and productivity.
Highlighting the importance of digital tools in improving living standards, fighting poverty, protecting the environment, and enhancing the quality of health and education, he said digitalisation also has a key role in creating job opportunities, as each digital job can potentially have the trickle-down effect of creating two to four further jobs in other areas.
Mr Al Qaed also presented key findings from the United Nations Digital Economy Report, which showed that the digital economy now makes up between 4.5pc and 15.5pc of the gross world product (GWP).
The report also found that the US and China contribute 75pc of all patents related to blockchain technology, 50pc of the world’s expenditure on the Internet of Things (IoT), and more than 75pc of the world market’s public cloud computing.
source: zawya
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The Arab world region, rich in natural resources; with enormous oil and natural gas reserves (32 percent of the world's known natural gas reserves are in the region) and phosphate (Morocco alone has more than half of the world's reserves). It is still lagging in terms of international trade.
The Arab world has also huge human resources, with a very young population. Suffering from unemployment and socio-economic problems, they are the main factor of change of this region, once was the beacon of a flourishing civilization. (read also Emerging Arab world and business opportunities in spite of the political turmoil)
Despite the distorted image reflected by the media, this region is witnessing a new reality imposed by enthusiastic and thirsty young people for the entrepreneurship. These people, constitute the pillar of a new generation of entrepreneurs who have succeeded in carrying out remarkable projects as described by an American entrepreneur, Christopher Schroeder in his book «Startup rising, the entrepreneurial revolution remarking the Middle East ».
Digital economy
While the Arab world is the scene of a popular uprising, the world economy is undergoing major changes towards digitalization and the fourth industrial revolution. Companies that are mainly based on internet and software, such as Google, Facebook, Twitter, Airbnb, Uber, Amazon, Alibaba…etc, have enabled unprecedented connectivity and access to information, thus opening up new horizons for economic models that did not exist before.
The Swiss economic model
On the other side, north of the Mediterranean Sea, behind the Alps, a small country in the heart of Europe, sits on the throne of global economic competitiveness. Switzerland, an industrial country, with export based economy and occupies a privileged place for world trade, thus serving as a trade hub.
RoAW: Rest of Arab World, GCC: Gulf Cooperation Council.
Bilateral trade relations
Trade between Switzerland and the Arab world increased in volume (exports + imports) from nearly 10 billion in 2010 to more than 23 billion in 2017 (most of it are exports) (figure 2) and this despite of the political on-going turmoil.
In view of these developments, partners of all kinds from both sides are looking to cross the walls in order to build bridges and increase their sales. However, the geographic, linguistic, cultural, regulatory and information asymmetry constitute obstacles to achieving the maximum potential of exchanges between the two parties.
Swiss Arab Entrepreneurs Platform
The Swiss Arab Entrepreneurs platform (SAE) was born from the experience of its founder, Ayman Abualkhair, having spent several years in the service of Arab-Swiss economic relations. Its mission is to reflect the tremendous investment opportunities in the Arab world, diffuse reliable information, promote business opportunities on both sides, and facilitate commercial links at the lowest cost, thanks to digital and innovative entrepreneurship models. Swiss Arab Entrepreneurs is the driving force for connecting entrepreneurs and businesses, in order to enable efficient exchange via an online platform.
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Next year, the GCC region will be in focus because of several major global events, including Expo in Dubai, which opens on 20 October 2020 and runs for nearly six months, and the G20 summit in Riyadh on 21-22 November 2020.
In different ways, the two events will showcase the region’s economic development and potential and could contribute to ongoing efforts to attract investments and diversify economies. The GCC’s location in a geopolitically sensitive region means it is often in the news, but these events could allow it to present a different side to key audiences.
Expo will make Dubai the second most-visited global city
The Expo in Dubai will be the first time that the Middle East region has hosted a World Expo, part of a series of exhibitions showcasing national cultures and human progress that began back in 1851 and are now scheduled every five years. Ongoing preparations include the government’s spending on infrastructure for the Expo site itself and private sector investments to expand accommodation capacity. This has been providing a boost to the construction sector, although about 80% of the work has already been completed.
During the event itself, the economic impact will come largely from spending by the influx of visitors. Dubai already hosted 15.9m tourists in 2018, making it the fourth most-visited city globally according to Mastercard’s Destination Cities Index. We forecast that the surge of visitors for Expo should result in it advancing to become the second most-visited city during 2020-21, reaching 23 million visitors in 2021.
This is based on official forecasts for about 11m additional tourists coming for Expo, which we assume are distributed evenly across the six months of the event, and underlying growth trends for the remainder of each year. If numbers exceed expectations, or if tourism growth is slower in Bangkok, which currently is the most-visited, then Dubai might even move into first place.
Long-term impacts
The key challenge for Dubai will be to convert the enthusiasm generated by Expo into longer-term gains. There will be an inevitable lull after the event, as visitor numbers decrease and tens of thousands of temporary expatriate staff hired for the event depart. However, the investment in the Expo site will continue to have an impact as it converts into a mixed-used development anchored by the Dubai Exhibition Centre, which will continue to host major events and is forecast to attract 1.1m foreign visitors a year.
The hope is that many of the newcomers who attend Expo will like what they see and become regular visitors to Dubai. Its central hub location on intercontinental transit routes, and the very high satisfaction results found in the Dubai International Visitors Survey, support that outcome. Dubai’s economic model also harnesses tourists as investors, particularly in real estate, and most Expo visitors are expected to be relatively affluent and in turn, potential investors who might be attracted by the current cyclical downturn in real estate prices, resulting from significant new supply.
Saudi Arabia will help frame the G20 agenda
When the annual G20 meeting arrives in Riyadh in November 2020, it will be the first time the Middle East has hosted such a large gathering of global leaders. While Expo focuses on global culture and technology, the G20 is the leading forum for global economic policy. Its membership includes countries accounting for 90% of the world’s GDP and two-thirds of global population. It was founded in 1999 in an effort to expand the G7 club of large developed economies to include broader representation by adding 12 other large economies and the European Union. Saudi Arabia has an important role as the only Arab state and the only OPEC member in the group. Since the global financial crisis in 2008, the G20 has taken over the baton from the G7 as the most important annual gathering.
In hosting the 15th G20 summit, Saudi Arabia will be able to frame some of the topics discussed by the world leaders and work to mediate agreements, and its secretariat is currently preparing an agenda. This will also be shaped by whatever key economic and political events are underway at the time, which are difficult to predict. However, we can expect that trade and climate change, both issues on which Saudi Arabia has an important perspective, will continue to be prominent. The summit will also happen two weeks after the US presidential election, the result of which could have a significant impact on the G20 discussions. In any case, Donald Trump, a close ally of Saudi Arabia, will represent the US at the G20, as the US presidential inauguration won’t take place until January 2021.
The summit will highlight Vision 2030 developments
The summit could also be happening at a time when OPEC and its partners (including G20 member Russia) may be debating whether to extend oil production cuts into 2021. In June, the Russian president and the Saudi crown prince met on the sidelines of this year’s G20 in Japan, agreeing to continue oil cooperation, and a few days later the OPEC+ group formally agreed to extend cuts to March 2020. Many oil sector analysts expect that they will be extended for a further nine month period to end-2020, depending on trends in the global economy and oil market, in which case a decision to end the cuts, after four years, or continue in some form into 2021 could be pending when the G20 meets in Riyadh.
Aside from the core discussion, the summit will also provide a spotlight on Saudi Arabia itself. It comes as the Kingdom nears the end of its National Transformation Program, the first medium-term plan to set quantitative and ambitious goals for economic reform and diversification, as part of the broader Vision 2030. Significantly, it will also be happening around the time that Saudi officials have indicated the Aramco IPO is likely to take place and also when the first phase of NEOM city should be complete. Two key elements of the Kingdom’s broader diversification strategy. The attention resulting from the G20 could be harnessed to attract interest in both portfolio and direct investment in Saudi, which will be vital if it is to achieve its objectives.
source: pwc
At a time when economic tensions are never far from the world’s headlines, the role of trade as a tool for promoting mutual growth can seem a distant memory.
And yet amidst this increasingly competitive and inward-looking landscape, some respite can be found in the Middle East, an innovative and fresh region of nations racing to diversify their economies away from hydrocarbons.
The diversification of the region helps boost the Middle East market and make it an emerging champion for trade.
Stronger together
Boosting non-oil exports and foreign investments are essential steps for diversification. Over the last two decades, Gulf nations have sought to forge closer ties with one another, removing non-tariff barriers and entering into international trade agreements as an integrated group. As well as a GCC-wide Free Trade Agreement (FTA) and the broader Greater Arab Free Trade Area to promote intraregional trade, the Gulf Cooperation Council (GCC) currently holds FTAs with Singapore and the EFTA states of Norway, Iceland and Switzerland. The cooperation council is collectively negotiating several more, including with:
- China
- Australia
- Japan
- Korea
- New Zealand
- The European Union
First of its kind FTA
As well as entering into international Free Trade Agreements collectively, GCC members have also forged new partnerships independently. Of particular note is Bahrain’s FTA with the US – the first US FTA with any GCC country. Last year saw USD 1.2 billion total in imports and USD 683 million in exports from this trade agreement alone. Furthermore, it has been a boon to Bahrain’s rapidly growing manufacturing sector, attracting international companies seeking to benefit from the Kingdom’s low-cost business environment, advanced infrastructure, supportive regulation, highly skilled workforce and access to both the US and growing USD 1.5 trillion Gulf markets.
Tariff-free competitive edge
Take Confectionary giant Mondelez, which chose the Bahrain International Investment Park for its sixth global mega-plant – a ‘Factory of the Future’ the size of 300 football fields. According to Plant Director Omar Nassef, “The US FTA grants the Bahraini business a competitive edge of having tariff-free access to the giant economy of the US.” Every year Mondelez produces some 60 million Oreo cookies – around 72 metric tonnes – and is generating some USD 70 million of revenue coming from the Middle East market and its tariff-free edge.
Skilled workforce
Or take 205-year-old US home textiles producer WestPoint Home. According to COO Steven Burns, most of the company’s competitors are in countries like Pakistan, China and India. Having set up in Bahrain to take advantage of the ease of doing business, access to decision-makers and skilled workforce (they employ more than 160 Bahrainis) they now export 90 percent of their production, duty-free, to the US.
Supportive infrastructure
Take the example of Bell Racing Helmets, which according to Executive Director & Chairman Stephane Cohen set up in Bahrain to take advantage of the supportive infrastructure for entrepreneurs and businesses and the high quality of life. They have been benefiting from the US FTA ever since.
Bucking the global trend
The results of attracting these international businesses are starting to show. The latest World Investment Report (WIR 2019) from the UN Conference on Trade and Development found that global flows of foreign direct investment (FDI) had sunk to their lowest level since the global financial crisis. Despite this, the West Asian subregion, which includes the Middle East, bucked the global trend, seeing a three percent rise in FDI to a total of USD 29 billion. The report singled out Bahrain, which saw a 6 percent increase in FDI inflows, attributed in large part to growing interest in its manufacturing sector.
Strengthening relations at home and abroad
The Middle East has long been seen as one of the world’s most fractious regions. Yet the need to evolve and adapt to a rapidly changing world has brought many Middle Eastern countries closer together, boosting the Middle East market. It is an irony of the digital era that while we are more connected than ever before, there is a growing trend towards nationalism and protectionism. In such a climate, there may be lessons to learn from the Middle East, which is strengthening relations at home while forging new alliances and visits across the world. And growing stronger because of it.
source: bahrainedb
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