TRUMP GIVES RE­GION A REA­SON TO HOLD ON TO ITS CON­FI­DENCE

▶ Sur­vey of UAE and Saudi ex­ec­u­tives by ‘The Na­tional’ pre­dicts sen­ti­ment will im­prove

The National - News - - BUSINESS - MAH­MOUD KASSEM

Amid height­ened geopo­lit­i­cal ten­sions in the re­gion, ex­ec­u­tives in the UAE and Saudi Ara­bia have re­assessed their in­vest­ment and business de­ci­sions.

But with US pres­i­dent Don­ald Trump’s com­mit­ment to sup­port­ing the two Gulf coun­tries, sen­ti­ment is ex­pected to im­prove this year, a sur­vey com­mis­sioned by The Na­tional re­vealed.

Eighty-five per cent of re­spon­dents in the sur­vey car­ried out by Border­less Ac­cess in the UAE, ei­ther strongly agreed or just agreed, that ten­sions had made them re­vise their eco­nomic out­look for this year and led them to re­assess in­vest­ment and business de­ci­sions.

In Saudi Ara­bia 95 per cent of those that were asked the ques­tion strongly agreed, ac­cord­ing to the sur­vey.

“The sur­vey re­sults are clearly high­light­ing the fact how geopo­lit­i­cal ten­sions builds un­cer­tainty within business sen­ti­ments and has a di­rect im­pact on eco­nomic out­look and in­vest­ment de­ci­sions,” said Dushyant Gupta, the se­nior vice pres­i­dent at Border­less Ac­cess.

Mr Gupta at­trib­uted the greater con­cerns in Saudi Ara­bia to the coun­try’s prox­im­ity to re­gions of po­lit­i­cal ten­sions.

In the UAE, one in six re­spon­dents said they were not chang­ing business de­ci­sions in spite of the po­lit­i­cal sit­u­a­tion.

The poll comes fourth month into the dis­pute be­tween Qatar and a num­ber of Mid­dle East­ern coun­tries. The UAE, Saudi Ara­bia, Bahrain and Egypt broke diplo­matic ties with Qatar and cut off their air, sea and land links to the coun­try on June 5 over Doha’s sup­port for “ter­ror­ist groups aim­ing to desta­bilise the re­gion”. The cri­sis is the most se­ri­ous since the GCC’s cre­ation in 1981.

So far econ­o­mists say the bulk of the eco­nomic dam­age in the re­gion is be­ing done to Qatar as the num­ber of vis­i­tors falls and a sell-off in the coun­try’s stock mar­ket and drop in de­mand for Qatari riyals rat­tles the coun­try’s fi­nan­cial in­dus­try.

At the same time, the sur­vey found that busi­ness­men in the UAE and Saudi Ara­bia are up­beat about the in­vest­ment out­look this year af­ter Mr Trump’s visit to the re­gion ear­lier this year.

Ninety-two per­cent of re­spon­dents to the poll in the UAE ei­ther strongly agreed or sim­ply agreed that Mr Trump’s com­mit­ment to sup­port­ing the UAE and Saudi Ara­bia is pos­i­tive for the in­vest­ment out­look this year, while in Saudi Ara­bia 79 per cent of those polled ei­ther strongly agreed or only agreed with the no­tion.

Mr Trump vis­ited Saudi Ara­bia in May, sign­ing deals val­ued at more than US$380 bil­lion (Dh1.4 tril­lion) which in­cluded the sup­ply of US de­fence equip­ment and ser­vices to Saudi Ara­bia.

His visit was aimed at putting in place a frame­work for stroger part­ner­ship with tra­di­tional US-Arab al­lies which in­volves them tak­ing on a greater share of the re­spon­si­bil­ity for re­gional se­cu­rity.

Pre­vi­ous US pres­i­dents have made at­tempts to put such a plan in place, but di­verg­ing views and threat per­cep­tions, as well as con­cerns about the US aban­don­ing the re­gion, have al­ways un­der­mined them.

The Trump ad­min­is­tra­tion has taken a much harder line on Iran than its pre­de­ces­sor. It has vowed to work with Gulf coun­tries to bol­ster their abil­ity to de­ter and con­tain Iran, which Riyadh con­sid­ers its great­est se­cu­rity threat and re­gional ri­val.

De­spite the ten­sions, econ­o­mists re­main up­beat about an eco­nomic re­cov­ery in the UAE fol­low­ing sev­eral years of tepid growth.

The UAE’s non-oil econ­omy is set to get a boost in the sec­ond half of the year from a pick-up in govern­ment spend­ing ahead of Expo 2020.

Econ­o­mists also say that an im­prove­ment in the for­tunes of the global econ­omy will also aid tourism and real estate. Con­sumer spend­ing ac­tiv­ity, which has been im­prov­ing, is also set to get a lift in the fi­nal quar­ter of this year as peo­ple buy durable goods be­fore the 5 per cent vale added tax levy is in­tro­duced on Jan­uary 1.

De­spite the ten­sions, econ­o­mists re­main up­beat about an eco­nomic re­cov­ery in the UAE

AP

From left, Egyp­tian pres­i­dent Ab­del Fat­tah El Sisi, Saudi King Sal­man, US first lady Me­la­nia Trump and pres­i­dent Don­ald Trump

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