Sunday, 28 April 2013

Arab Gulf States Make Investments in a More Diversified Future

The oil-rich Arab Gulf States have been on a mission to diversify their economies over the last number of years and by all accounts their investment strategies are proving to be the right ones. Long-dependent on oil revenues primarily, the region is busy building up their consumer manufacturing base along with tourism and other sectors in an attempt to grow their domestic prosperity. They are steadily gaining a stronger standing in the global economy and expect to be a leading influence in world trade for many decades to come.

One area that they have been particularly focused on has been the ports sector. The region as a whole has invested over US$35 billion on various port projects in an effort to drive international trade, domestic job creation and non-oil economic growth. These investments have generated hundreds of thousands of non-oil jobs in the gulf and are expected to sustain even more in the future as they benefit from the solid diverse economic foundation they have created. It’s true that Gulf States have lots of oil money to invest but if they make the wrong investments into their economic future it will all be a waste of time and money. It appears as though Arab leaders have taken an approach to investing that is already paying strong dividends for the economy, as well as provided international investors with the confidence to consider making an investment in the many opportunities that are beginning to emerge; throughout the region.

The Gulf region is perfectly situated between the western and the eastern consumer markets and by having the most upgraded and best state-of-the-art ports, it is looking to establish itself as a leading logistics hub for the shipping industry. Already non-oil exports in the region are showing a growth trend and surprisingly imports are also on the rise higher than expected, due mainly to their growing consumer base. These are signs that the region’s new approach to diversifying their economy and growing their prosperity is working as they had hoped.

With a number of countries in the region investing in shipping ports and initiating infrastructure projects to capture more trade as the global economy grows, the risk of more local competition naturally increases. However, the region collectively agrees that once the global economy reaches it’s full potential in the next few years, there will be more than enough trade for everyone to benefit. In my mind there is no doubt that investors in the Gulf States have definitely made the right investments, to encourage and accommodate future growth.

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