May 2015

Gulf Industry magazine helps you catch up with the numbers behind economic and industrial developments in the region.

Government use of social media backed

A MAJORITY of Arab people support governments’ use of social media in taking citizen engagement and services delivery to the next level, according to industry experts.

The observation was made at the latest ‘Innovation Days’ event jointly hosted by the Mohammed Bin Rashid School of Government (MBRSG) and SAP, the world’s leading business software company.

Highlighting specific findings of a report published by MBRSG, panellists said more than half (55 per cent) of the respondents in a survey strongly support governments’ use of social media for the design and delivery of public services.

The Arab Social Media report titled “Citizen Engagement and Public Services in the Arab World: The Potential of Social Media” also indicates that the Arab world has over 82 million Facebook users and 5.8 million active Twitter users, with more than one in five people actively using social media platforms.

With the digital economy picking up the pace, the Arab World’s public sector is increasingly using the Internet of Things and social media feedback to better understand citizens’ sentiments, risks, and needs – enhancing delivery and relevance of services and visibility into tax spending, while reducing costs.

The UAE population is one of the most active in the region for social media usage, with the percentage of people using Facebook in the country currently exceeding 60 per cent of the total population, or more than five million users.

These numbers make the UAE the second largest country in the GCC for social media penetration, according to the 2014 UAE Social Media Outlook, jointly published by MBRSG and Dubai Press Club.


Bahrain ‘a vibrant, low-cost gateway to GCC’

BAHRAIN’S Economic Development Board (EDB) has reported continuing success in positioning Bahrain as a vibrant high-value, low-cost gateway to the GCC.

The EDB said it sponsored and took part in the Fund Forum Asia held last month in Hong Kong, said a report in the Gulf Daily News (GDN), our sister publication.

“The six countries of the GCC are experiencing fast growth and are exploring means of diversifying their economies away from oil,” said EDB chief economist Dr Jarmo Kotilaine who introduced Asian investors to opportunities in Bahrain and the GCC in his keynote address. He said Bahrain is the ideal access point for international investors and wealth managers looking to expand into the GCC region.

“In Bahrain investors will find a long-established financial centre with more than 40 years of experience and one of the largest concentrations of finance institutions in the region.

“The kingdom’s mature regulatory framework, low cost of doing business, and highly skilled national workforce make it a compelling business location for the asset and wealth management industry,”

Kotilaine said. The kingdom has more than 400 registered financial institutions and is also considered a global leader in the Islamic finance industry, hosting the highest concentration of Islamic finance institutions found anywhere in the world.

Arab economies set to register growth of 3pc

ARAB economies are expected to see gross domestic product (GDP) growth of three per cent this year, according to a new report. The first edition of the Arab Monetary Fund (AMF)’s Arab Economic Outlook report says the declining trend of international oil prices and the recent internal developments in some Arab oil-exporting countries are the key factors affecting growth, said a report in the Gulf Daily News (GDN), our sister publication. International oil prices decreased by 60 per cent in January this year compared with levels in June last year.

Moreover, oil prices have remained below $55 per barrel during the first quarter.

The decline is expected to affect the economic growth of Arab oil-exporting countries, which contribute around 78pc of the total gross domestic product of their economies in constant prices.

In this context, the AMF expects the economic performance to remain uneven across the region during the year. The economic growth for Arab oil-exporting countries is forecast to be 2.9 per cent this year, compared with 3.7 per cent last year.


UAE among global top 30 for ICT growth

THE UAE is among the top 30 countries in the world for network readiness, having improved markedly in 2015, according to the Global Information Technology Report launched by the World Economic Forum.

Among the GCC countries, the UAE (23rd place) is followed by Qatar (27), Bahrain (30), Saudi Arabia (35), Oman (40) and Kuwait (72), the report highlighted.

Data from the report’s Networked Readiness Index (NRI), which measures 143 economies in terms of their capacity to prepare for, use and leverage ICTs, suggest that the gap between the best and worst performing economies is widening.

Those in the top 10 per cent have seen twice the level of improvement since 2012 as those in the bottom 10 per cent. This demonstrates the scale of the challenge facing developing and emerging nations as they seek to develop the infrastructure, institutions and skills needed to reap the full benefits of ICTs, as only 39 per cent of the global population enjoys access to the internet despite the fact that more than half now owns a mobile phone.


Investors to boost Saudi capital market

THE hundreds of billions of dollars that would flow into investments in Saudi Arabia once its $530 billion capital market opens up is likely to give a major boost to the contribution from Mena, said an industry expert.

Saudi Arabia will have four per cent weight in the Morgan Stanley Capital International emerging market index with the opening of the stock market to foreign investors, added K Vinod Cartic, senior consultant, business and financial services, Frost & Sullivan, a growth partnership firm.

“Saudi Arabia’s stock market, the Saudi Tadawul, lists very large conglomerates spanning various verticals in the region, including petrochemical leader Sabic (Saudi Basic Industries Corp). The market is more than twice as large as UAE and more than thrice as large as Qatar,” said Cartic in a perspective released by Frost & Sullivan.

The country also evinces significant investor interest due to an active IPO (Initial Public Offering) market.

In 2014, the National Commercial Bank, raised $6 billion in largest share sale in the history of IPOs in the Arab nations.

There are certain concerns for investors, especially those concerning regulation, transparency in procedures and (lack of) clarity in Government policies.

“Additionally, Saudi Arabia has an economy that is heavily skewed towards petroleum, with 90 per cent of all revenues coming from oil. For these reasons, Saudi Arabia is being viewed with caution as a risky proposition,” noted Cartic.

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