Economists cautious, but optimistic
Industry experts at the Country Risk Conference agreed the Middle East is suffering from the financial crisis, but they’re optimistic about its future.
May 11, 2009 4:00 by Parinaaz Navdar
Cautious optimism seemed to be the theme at the first Country Risk Conference on Monday. The conference held by Coface and Export Credit Insurance Company of the Emirates (ECIE) aimed to tackle issues such as how the Middle East can navigate its way out of the current global crisis, and the outlook for the US dollar.
Middle East economies aren’t as badly affected as the West, according to engineer Saed Al Awadi, CEO of ECIE.
The impact of the recession on the UAE has been less than on other countries, because the nation’s non-oil trading partners like China and India are expected to grow in 2009. Even the West sees the benefit of trading ties with such developing nations, which is why there was a G20 summit this year instead of the usual G7.
“It was a sign”, says Phillipe Dauba-Pantanacce, senior economist for the MENA region at Standard Chartered Bank. “It was a group of countries that included some of the major emerging markets.”
Pierre Mourlevat, Head of French Trade Mission said that the strongest economies in the GCC are Saudi Arabia, Qatar and Abu Dhabi. Oman is having the most trouble coping with the economic downturn and is the weakest in the region. Kuwait is somewhere in between and has the potential to get better because it is the only country in the Middle East with a clear cut stimulus package, which includes wide-ranging state guarantees for bank loans and assisting troubled investment firms to repay their debts.
Recovery will take time, however, cautioned Al Awadi. The Middle East is suffering from the crisis too, but is in a better position compared to the West, he stressed.
The experts on the panel all agreed that the crisis began in the US, so change will have to first come from US in order for other economies to recover.