This prospect was raised at a recent British Expertise seminar chaired by Jim Wilson, Chairman of British Expertise’s Middle East Committee and a Technical Director for Black & Veatch, a leading global engineering, consulting and construction company.
Speakers included international law, business intelligence, risk consultancy, engineering consultancy and Foreign Office experts, who answered questions from an audience representing organizations with a direct interest in the Gulf.
'Black & Veatch has a long and successful history in the Middle East and is currently involved with the delivery of more than US $1 billion of water and wastewater infrastructure across the region. Leading the seminar allowed the business to build on its knowledge of the region and learn more from the other experts present,' Wilson said.
The seminar was held under Chatham House Rules, which ensures the confidentiality of the source of the information that is discussed.
“This seminar covered very sensitive subjects,” Wilson explained. “Some presenters were drawing on highly confidential sources.” Wilson, as Chairman, summarized the discussion and reported the findings based on the speakers' overall views.
The group discussed the economic downturn in the Middle East, creating what was described as “a buyer's market” even though the International Monetary Fund believes the region will still be the best financially performing region.
Although lower oil prices are continuing to drive down the price of commodities, there was speculation there could be a 20 percent increase in the price of oil during the next year.
The speakers believed that Dubai would be more exposed to the financial situation than other Gulf States. This is a result of its non-oil based economy and a number of speculative commercial developments remaining unoccupied.
Speakers also suggested that countries with large oil or natural gas reserves, such as Abu Dhabi, Kuwait and Qatar, are likely to remain financially strong in the future. Although Bahrain has some oil reserves, it was viewed as possibly exposed because of the vulnerability of its banking system and the potential of political unrest. While Oman has not seen such rapid growth as some of its neighbouring states, it has long-term planning in place, which bodes well for its future, according to the speakers.
Saudi Arabia has benefited from real estate investment and is possibly the most insulated from the financial circumstances. Currently, schemes worth a total of US $476 billion are underway. The plans include the development of six new economic cities at a cost of at least US $111 billion with the objective of developing infrastructure and promoting economic diversification as a means of providing employment and ensuring long-term sustainable growth. However, speakers noted signs that the development had slowed which will have an impact on both housing and employment creation.
Therefore, the country will be re-prioritizing its projects and non-essential development could be affected.
In his summary Wilson said, and all present agreed, that “The seminar had been well received and, at a time of financial uncertainty in the Gulf, presented an ideal opportunity to obtain up to the minute information from experts with extensive experience of the region.”