A flood of large scale development projects will turn the Middle East into a magnet for global capital investment in the coming decade, Mohamed Ali Alabbar, Chairman of Emaar Properties, told heads of state, ministers and corporate leaders at the World Economic Forum in Jordan.
He confidently forecasted a dramatic upturn in capital flows into the region, which in turn will fuel a surge in economic development, mirroring the economic miracle that has transformed parts of China and India. The catalyst will be the spate of new developments being undertaken in all sectors, from property and infrastructure to tourism, encouraged by the optimism that has grown on the back of buoyant returns from the energy sector.
More than US$300 billion of new investment opportunities will be created in the next 10 years, Mr. Alabbar said, opening up the prospect of global investors following the lead given by regional interests pouring money into the region. He added: “The momentum building up behind privatisation, political, economic and social reform, the region’s natural resources, the easing of tensions; these are all combining to ensure the Middle East is now high on the agenda of global investors and corporations.
“It cannot be ignored. Increasingly for the right reasons,” he told an audience, ranging from statesmen to the CEOs of multinationals gathered for the WEF session focusing on ‘Reforming the Elites’, which looked at the role of the private sector in advancing the reform agenda. “The economic reform initiatives of the regional governments and the ongoing liberalisation in key sectors has ensured that the outlook for the region is positive and growth oriented in the medium term and the private sector will be at the vanguard of reform,” he added.
Mr. Alabbar called for the region’s governments to seek greater integration and cooperation in areas such as trade and tariffs. He said this could lead to a powerful and coherent Middle East economic bloc. “This will finally establish the Middle East where it belongs, as one of the major players in the global economy.”
“On a different scale and at a different level, the Organisation of Petroleum Exporting Countries (OPEC) has shown for a single sector what is possible from this region. The groundwork is now being carried out that could lead to that economic quantum leap that should take this region to the next level.”
“There is a long way to go the combined GDP of the Arab world at US$750 billion is less than that of Spain and the fragmentation of its markets has, to date, acted as barrier to it becoming an economic bloc like the EU. The barriers are coming down, pushed by economic reality and, increasingly, political will.”
He said governments are beginning to recognise that they face real challenges within the region that only reform can meet. Unemployment, economic stagnation, overburdened, underperforming public services are among a host of other ills that have to be tackled and, echoing WEF principles, Mr. Alabbar said that only the private sector can offer long term solutions.
He added: “The public sector has failed to deliver in the region. We have seen its failure the world over. We know the private sector can deliver and it is time to take off the shackles and allow it free rein to bring the changes our countries need.
“More public-private partnerships, less red tape, encourage business friendly policies, liberalise more sectors of the economy besides telecom and property and we would at least be on the right path to solid achievement. “We are at a critical juncture where we need to ensure our long term economic growth and social stability. The region has to seize the moment to change and integrate or the world will pass us by.”
Earlier, during the Forum’s plenary session Seizing the Moment: People Power and Change in the Middle East, Mr. Alabbar joined a host of political and corporate leaders in calling for immediate action to tackle some of the problems that have held back the region.
He was joined in the session by the heads of international ogranisations such as Josep Borrell Fontelles, President of the European Parliament, Elizabeth Cheney, the US Principal Deputy Assistant Secretary for Near Eastern Affairs, and Rima Khalaf Hunaidi, UN Assistant Secretary-General and Director, Regional Bureau for Arab States, United Nations Development Programme (UNDP), New York.
There were also contributions from Amre Moussa, Secretary-General, League of Arab States, Cairo, Hoshyar Zebari, Minister of Foreign Affairs for Iraq, Jacob Zuma, Deputy President of South Africa, and Khalid Abdulla-Janahi, Chairman of the Executive Committee, Shamil Bank of Bahrain, Switzerland.
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