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Saudi Arabian economy ‘to return to growth’ in 2018

The kingdom’s real GDP growth dropped 1 percent in the first half of 2017

The Saudi Arabian economy will remain contracted in 2017 before returning to “modest” growth of 1.3 percent in 2018, a report has claimed.

Oil production cuts as part of the OPEC agreement will see oil sector growth remain in negative territory in the second half of this year, while the private non-oil sector continues to face headwinds, amid government spending cuts to a number of infrastructure projects, according to an analysis from BMI Research.

Real GDP growth in the kingdom stood at -1 percent year on year in the first half of 2017, after having alreadty contracted by 0.5 percent in the first quarter of the year.

This contraction was largely driven by the oil sector, which accounts for over 40 percent of GDP and contracted by 2 percent in the first six months of 2017, BMI said.

Meanwhile, the non-oil sector has also struggled to regain traction, expanding by a sluggish 0.6 percent year-on-year over the same period – up from 0.2 percent throughout 2016.

Based on conservative expectations for growth, BMI said it predicts the economy to recede by 0.5 percent in 2017 before picking up to 1.3 percent in 2018.

Source:http://www.arabianbusiness.com/politics-economics/380392-saudi-arabian-economy-to-return-to-growth-in-2018

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UAE, Saudi ‘Well Positioned for Industrial Revolution 4’

The UAE and Saudi Arabia are well positioned for the Fourth Industrial Revolution, according to American global management consulting firm A T Kearney.

The UAE has the opportunity to take advantage of emerging technologies and changes in production, as it ranks in the top quartile of countries performing well in the areas of technology and innovation, human capital and trade, said the report.

Saudi Arabia has also ranked highly and has huge opportunity along with the plans underway to meet Saudi Vision 2030, according to the new Readiness for the Future of Production Report produced by World Economic Forum, in collaboration with global management consultants, A T Kearney.

The report, which measures how well-positioned 100 countries and economies, across all geographies and stages of development, are to benefit from the changing nature of production. It reveals that only 25 countries are strongly positioned to benefit, as production systems stand on the brink of exponential change.

The UAE, which aims to increase its manufacturing share of gross domestic product (GDP) to 25 per cent by 2025, along with Saudi Arabia, are flagged as ‘high-potential’ countries and are positioned to leapfrog in the emerging production paradigm. These countries have a relatively small current production base, but have the resources and potentially the right combination of other capabilities to capitalise on opportunities.

Johan Aurik, managing partner and chairman of A T Kearney, said: “In a changing production landscape, each country will need to differentiate itself, capitalise on competitive advantages and make wise trade-offs in forming its own unique strategy for the future of production.”

“Given the speed and scale of changes occurring in the environment, the new diagnostic and benchmarking tool can help raise awareness and sharpen a country’s response,” he said.

As the Fourth Industrial Revolution gathers momentum, the report highlights how decision-makers from the public and private sectors are confronted with a new set of uncertainties regarding the future of production.

Rapidly emerging technologies—such as the Internet of Things (IoT), artificial intelligence, wearables, robotics and additive manufacturing—are spurring the development of new production techniques, business models, and value chains that will fundamentally transform global production.

Mauricio Zuazua, partner, A T Kearney, said: “This is just one aspect of a vastly shifting landscape. It is imperative that government and business leaders take a fresh look at how their countries and corporations will contribute to the world’s fast-changing value networks to capitalize on future production opportunities, mitigate risks and challenges, and be resilient and agile in responding to unknown future shocks.”

This report is a key contribution to the World Economic Forum’s initiative on Shaping the Future of Production. The initiative brings together global leaders and decision-makers in seeking to address how the transformation of production systems, from R&D to the consumer, can drive innovation, sustainability and employment, to benefit all people, it stated.

Source:http://www.manufacturingtrade.com/news-detail:9117ad87-516c-5b06-a8ff-5a6f219c0c9c.html

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Qatar startups, manufacturing sector gain more govt support

Qatar startups

Three months into the Saudi-imposed economic blockade, Qatar startups and the manufacturing sector “are getting more support” from the government, which has laid out a number of self-sufficiency and sustainability-related projects, an official of a Qatari company said.
“As a nation we are aiming to become more self-sufficient; considering the amount of Qatar’s wealth, this goal can be achieved through the wise leadership of His Highness the Emir Sheikh Tamim bin Hamad al-Thani. This will also enable the government to develop areas it had not focused on earlier.

“Today, several new startups are getting a major push from the Qatari government and companies are beginning to invest more in newer projects. So definitely the blockade has acted as a great stimulant for the development of local businesses in Qatar, said Anoop Krishnan, the COO of end-to-end IT solutions provider Cherry Computer.

Prior to the blockade, Krishnan said the market was rife with “freelancers” or unregistered companies that are operating in some Asian and GCC countries. However, increased focus on local companies since June 5 helped considerably trim down the presence of freelancers in the market, “some of which do not even have a physical presence in Qatar,” Krishnan said.

“While there are still some freelancers operating in the market, the focus on local businesses since the blockade was a positive development for companies like us,” Krishnan pointed out.

He also underpinned the role of Qatar’s small and medium-sized enterprise (SME) sector in nation-building and economic development. “Two of the primary roles of the SME sector would be wealth creation and employment generation in the country,” he said.

Krishnan said the development of Qatar’s SME sector will create a spill-over effect on less-developed areas around the country when SMEs start setting up new businesses in less populated locations “to maintain cheaper operating costs.”

“The growth of industries and business in these areas will lead to great infrastructural development like better roads, new schools, hospitals, shopping malls, and other public and private services that would otherwise have taken a different timeframe had there not been a blockade.

“Adding to this is the already developing Qatar Rail project, which is going to interconnect neighbouring communities. There will be a serious growth in GDP and per capita income, which is again one of the essential goals of economic development,” Krishnan stressed.

The expected rise in the standard of living in Qatar and infrastructural development in areas like education, healthcare, and other public services “would be a direct result of the country’s growing entrepreneurship culture,” Krishnan said.

Source:http://www.gulf-times.com/story/563602/Qatar-startups-manufacturing-sector-gain-more-govt

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Iran Proposes Visa-Free Regime with Iraq, Trade in Own Currencies

Iran Proposes Visa-Free Regime with Iraq

Iran’s first vice-president put forward a proposal to lift visa requirements for the Iranian and Iraqi travelers, and also called for trade exchanges between the two countries using their own currencies, namely rial and dinar.

Addressing a meeting of high-ranking delegations from Iran and Iraq, attended by the visiting Iraqi Prime Minister Haider al-Abadi and held in Tehran on Tuesday, Iranian First Vice-President Eshaq Jahangiri called for the expansion of banking cooperation between the two neighbors by removing the trade obstacles.

To that end, he proposed, Iran and Iraq can begin to trade using their national currencies.

Jahangiri then noted that the political, economic and security cooperation between Iran and Iraq has reached such a high level that they need to formulate a “comprehensive document on trade and economic cooperation.”

The vice president also pointed to the huge number of Iranian pilgrims traveling to Iraq every year, suggesting that Tehran and Baghdad should sign an agreement to lift the visa restrictions.

For his part, the visiting Iraqi prime minister voiced Baghdad’s readiness to boost relations with Tehran in all fields.

Iraq and Iran are in the same front in the fight against terrorism, Abadi added, saying the Takfiri terrorist groups in the Arab country are on the brink of destruction.

Heading a delegation, Abadi arrived in Tehran on Tuesday and held meetings with Leader of the Islamic Revolution Ayatollah Seyed Ali Khamenei and with Iranian President Hassan Rouhani.