Global Investment Opportunities In The Middle East

By M. Isi Eromosele

The Middle East is strategically located in a global position that offers numerous dynamic investment opportunities. The region possesses one of the world’s largest major oil and natural gas reserves.

Looking to preserve the region’s economic viability well into the future, governments in the area are trying to wean their respective countries from continued economic dependency on their oil reserves. As such, policies have been established to attract increased foreign investment.

The goal is to change the respective economies from being oil-based to being technology, information and services-based. The convergence of factors such as a rush of regional diversification, privatization of state owned companies, population growth and regional integration create an environment that is quite responsive to economic investment.

There is a clear realization by Middle Eastern leaders that their economies must be turned away from a near total dependence on oil and state dominated control to one that is based on world class free market dynamics.

Dubai is a shinning example of how a country in the region can be transformed from one that had depended on one commodity, oil, to one that changed to a major financial, retail, tourist and multi-services hub. Dubai, a tiny oil exporting city-state has indeed undergone a remarkable transformation. A member of the United Arab Emirates, its leaders have succeeded in turning its economic focus from oil and gold trading to technology, telecommunications, retail, tourism, shipping and finance.

This major transformation differentiates Dubai from other surrounding Arab states, most of which are still stuck with sluggish oil dependent economies. Conversely, Dubai has become economically dynamic and politically stable.

While the Middle East suffered from the recent global financial and economic crisis, the impact varied across the region. Member countries of the Gulf Cooperation Council withstood the situation best, because they enjoyed very strong fiscal and external balances when the crisis began, or had a significant financial reserve from revenues during the oil boom.

Oil-exporting countries with large populations, however, entered the crisis with weaker fiscal and current account balances, and also are burdened by larger social commitments.

Presently, the Gulf Cooperation Council is a model for later development economies in the region due to its consolidation of progressive economic and trade reforms implemented to attract and retain foreign investment.

In their recognition of the need to enhance regional cooperation and economic integration in the area, the GCC was established on May 26, 1981 with a goal of facilitating and enhancing foreign investment among member states. The GCC is comprised of six member states: Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and United Arab Emirates.

Since its inception, the GCC has made considerable progress toward economic integration, consolidation of rules concerning investment, trade, labor and external tariffs.

The entire Middle East region is growing at a rapid pace and the policy makers in most countries there have been progressive with economic reforms.

Some states, such as Dubai, have achieved a Singapore-type success with great efficiency. Other economies are in the process of accelerating economic reforms in order to emulate Dubai’s success.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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