10 October, 2016

The Economic Future of the Gulf: Reform and Development

On September 23rd, the EU-Gulf Information Centre has organized an important event titled "The Economic Future of the Gulf: Reforms and Development", a unique conference dissecting the many ground-breaking economic reforms taking place in the countries of the Gulf Cooperation Council (GCC). The event, one of the firsts discussing at length and from various perspectives the topic, was also aimed at exploring the new venues for cooperation opening up following to these reforms. The occasion has attracted over 100 guests to the historical “Istituto Luigi Sturzo” palace, located in the heart of Rome. Amongst them, decision-makers, economists, thinkers, diplomats and business-leaders – including the Heads of International Relations of the major Italian energy companies, the Central Bank, the Ministry of Economy, the international Chambers of Commerce. Most importantly, most of the institutional representatives expressed a strong interest in follow-up activities. Several journalists from the main press agencies, including ANSA and AGI, were also present, taking advantage of the debate to publish articles on national newspapers, i.e. “Libero”. The debate touched on Fiscal Reforms, Social Corporate Responsibility, Infrastructure Development and the Social Impacts of the Economic Revolution.

The discussion was opened by the President of the Euro-Gulf Information Center (EGIC), Dr. Mitchell Belfer, who highlighted the main theme and objectives of the event, as well as the commitment of the EGIC in continuing its activity of building bridges between the Arab Gulf and Europe. Hon. Khalid Chaouki, Member of the Italian Parliament, expressed his support to the EGIC in this endeavour, underlining how working together would be the only way to overcome common challenges, and congratulated the EGIC for the results already obtained, as exemplified by that ongoing high-level event.

The first session began with the Keynote Speech, given by His Excellency Shaikh Mohammad Bin Khalifa Al Khalifa, Minister of Oil of the Kingdom of Bahrain. The Minister spoke at length about the impacts of the new economic reality on Bahrain’s energy sector, arguing that challenges can become opportunities for positive change, including technological advancement in the energy sector. In a detailed address, the Minister described the important background of Italy - Bahrain relations and how to build up on this background in the future to chieve the common goals of growth and stability. His speech was followed by an address from Sen. Benedetto Della Vedova, Undersecretary of the Minister of Foreign Affairs and International Cooperation of the Republic of Italy, who focused on how Italy can specifically support the GCC plans for diversification capitalizing on its global excellences. Senator Della Vedova also stressed the readiness of the Italian government to support Italian bodies in their internationalization with the perspective of feeding social and economic growth. 

The second session addressed the specifics of macro-structural reforms in the Gulf and their implications. Dr Ahmed Alyushaa, Economic Analyst from Bahrain, described the change in political economies of the GCC countries, towards increasing liberalization, including a change from a pure rentier model to increasing participation of the private sector and citizens in the national growth. While all GCC countries are in the process of phasing out subsidies, governments are rationalizing their expenditure and encouraging a two-way flux of investments, in particular in non-oil sectors. Mr Abdullah Abdulrahman Sharafi, former Advisor for the Dubai Chamber of Commerce talked about the case of the United Arab Emirates. He argued that the UAE also has embraced this renewed political economic model, adapting it at the specific needs of the seven Emirates and the peculiar role of the UAE in the global economy. In this context, Mr. Sharafi underlined, Dubai is serving as the engine for reforms and change. The session was closed by Dr. Khawla Al-Muhannadi, from Bahrain’s Environment Friends Society, who explained how there can be only one economic development, which is sustainable development. Dr Al-Muhannadi underlined that the role of civil society at times of tremendous change is even more crucial, to remind policy-makers that reforms that make negative disruptive changes to the people’s livelihoods cannot succeed on the long term to create inclusive growth nor stability.

 

The third and final session addressed the changes in specific sectors across the GCC. Cinzia Bianco, an Analyst at the Euro-Gulf Information Center, opened the session talking about ethical banking and finance in the Gulf and its potential for Europe. Ethical banking has proven particularly resilient in the midst of the global financial crisis. This is mainly due to its profits and losses sharing principles as well as to a stronger connection to the real economy. Dr. Khalid Abdula Taqi, Bahrain’s CEO of Housing Bank talked at length about a crucial sector in the Gulf: that of social housing. This particular sector is undergoing significant modernization, opening up many opportunities for solid and profitable investments. In the end, Dr. Omar Al-Ubadly, Director, of International and Geopolitical Studies at DERASAT offered an important closing thought: to enter the GCC market, it is key to look at the GCC economies with an informed perspective. The GCC countries are very peculiar in terms of their abundance of energy resources and scarcity of other natural resources. Grasping their complexities is necessary to establish durable and mutually beneficial partnerships.

Finally, Dr. Mitchell Belfer, President of the Euro-Gulf Information Center, offered his closing remarks, expressing the satisfaction for the outcome of the event and for the growing interest to keep on exploring possibilities for dialogue and cooperation between Europe and the Arabian Gulf. He stressed that the EGIC will continue its work in this direction, promoting information, knowledge and exchanges.