How GCC synergies can attract investors
dubai — The economic visions announced by the GCC governments will increase competition among regional countries, diversify economies and lower dependence on oil, panelists said during the CFO Strategies Forum Mena in Dubai on Wednesday.
Citing an example of Saudi Arabia liberalising its free zones, tourism, entertainment and trade sectors under Vision 2030, Fahad Alturki, chief economist and head of research, Jadwa Investment Company, said these measures would result in increased competition and force the countries to be more creative rather than depend on petrodollars.
He noted that trade between the GCC is minimal and most of it is reexports. This is mainly due to the UAE’s strong ports infrastructure.
“If the countries get their plan implemented under their respective visions, there will be more competition in attracting investments,” he said.
The UAE has announced Vision 2021, Oman 2020, Bahrain and Saudi Arabia 2030 as they look to reduce dependence on oil following lower crude prices over the last couple of years.
Though the Saudi oil sector witnessed a decline in the first half of 2017, the non-oil sector recorded marginal growth of 0.5 per cent, he said, adding that “next year, we will not see the non-oil sector grow by five per cent but rather around one per cent.”
Alturki was speaking during a panel discussion. Among the other panelists were Jignesh Sanghvi, CFO, Dubai Multicommodities Centre (DMCC); Lindsay Degouve De Nuncques, head of ACCA Middle East; and Martin Spraggon, professor of strategic management, American University of Sharjah.
DMCC’s Sanghvi said the regional governments’ vision is to reduce dependence on oil and focus more on infrastructure, trading hubs, factories and tourism.
“It’s about expanding their markets rather than eating into each other. We have seen synergies in
There is $22 billion trade between the UAE and Saudi Arabia and it’s going to multiply if economies are going to open up Jignesh Sanghvi, CFO, DMCC
regional leadership. There is $22 billion trade between the UAE and Saudi Arabia and it’s going to multiply if economies are going to open up,” Sanghvi added.
Spraggon said uncertainly presents windows of opportunities. “It’s not about what is happening outside, but how firms and individuals respond to uncertainty. It is all about how you position yourself and plan strategy to deal with the situation.”
De Nuncques said many businesses are not prepared for VAT as they think the tax may not be implemented. She noted that only 11 per cent of companies are prepared for VAT implementation. “The key message is that if you’re not prepared, you will be in a sticky situation,” she added.
Highlighting the role of robotics in the financial sector, Khurram Siddiqui, partner, Mena financial accounting advisory services digital leader, EY, said software robotics is the cousin of hardware robotics.
Pointing out the advantages of robots over humans, he said they are low-risk, non-invasive, better have accuracy, are consistent and provide cost saving of 20 to 60 per cent. “Productivity is going to be very high because you’re taking repetitive work away from humans and involving them more in decision-making. Robotics can work in any industry. For robots, there are no sick days and return on investments is very high too.”
— waheedabbas@khaleejtimes.com