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EXPO 2021 Dubai

Rethinking Italy’s Opportunities

by Piercamillo Falasca

2020 was meant to celebrate EXPO Dubai, which Italy (as organiser of EXPO 2015 in Milan) worked diligently for years on as an opportunity to grow its exports to the Middle East, and the Gulf Cooperation Council (GCC) countries in particular, and as a showcase for the attraction of investments towards its small and medium-sized enterprises—especially the most innovative ones.

The postponement of the event until 2021 will, in all probability, transform EXPO Dubai into the first major post-pandemic event, with enormous symbolic and strategic significance. One hundred and ninety countries are set to participate and some twenty five million visitors, from around the world are expected to attend. The theme chosen for the event – “Connecting Minds, Creating the Future” – will be ever more appropriate after the pandemic, a time when the emergency has pushed innovation and digital processes into our daily lives and work.

For a country like Italy, struggling so hard against the virus and the economic crisis, EXPO Dubai 2021 will be a natural chance for a fresh start. Both in the United Arab Emirates (UAE) and in neighbouring Saudi Arabia, Italy represents the 8th most important importing country, contributing to more than 4% of goods and services these two biggest GCC countries purchase abroad, above all thanks to the success of the most emblematic sectors of the “Made in Italy” mix of food, furniture, fashion and machinery.

It is inevitable that, after Covid19, the approach to EXPO 2021 will be different for everyone. The Gulf countries will be increasingly engaged in the strategy of economic diversification, to free an increasing share of their GDP from oil production (and dependance). The drop in oil prices due first to the lockdown and then to the global economic recession will certainly limit investment capacity, making Saudi, Emirati, Bahraini, Kuwaiti, Omani and Qatari investors more careful and demanding about the companies and sectors they intend to invest. For those Italian companies that will be seeking partnerships, the challenge will be to offer greater credibility and solidity than ever.

From a political point of view, the support of the so-called country-system will be crucial, starting from the role that can be played by SACE, a public insurance company for the exportation and internationalisation of enterprises, and also thanks to the office which is to open in Riyadh and the Memorandum of Understanding (MOU) signed by the public company and the CEO of the Debt Management Office, Fahad A. Alsaif.

In general, it is reasonable for Saudi Arabia to direct its investments more towards industrial and production diversification rather than purely financial investment, because a target over the next few years will be to increase the internal demand and the workforce’s productivity in non-oil related sectors.

Know-how will be a “new oil” - this is a skill-set for which the dense network of medium and small Italian enterprises (SME) retains global recognition for its level of excellence. It is necessary to exploit, enhance and protect this particular Italian niche.

For Italy, but in general for Europe, a strategy of intensifying commercial relations with the GCC will inevitably influence the region’s delicate geopolitical balance which, at present, is — like the rest of the world — impacted on by the effects of the pandemic and the growing frigidity in West—Far East relations. For Italy, Expo 2021 will also present the opportunity for in-depth reflection on the role that it (alone and as a key member of the European Union) wants, and is able, to play in the region. It is a complex issue, given the very sensitive situation in the Gulf, but it is an issue that, sooner or later, Italy will have to signal a clear answer.

 

29 May 2020
 

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