Middle East Anticipates New Projects

Middle East Anticipates New Projects


By Mohammad Jaber

The role of the construction sector in advancing economic development cannot be understated. In the Middle East, we started 2018 with a strong pipeline of megaprojects in the region, especially in Kuwait, Saudi Arabia, and the United Arab Emirates, with construction being the largest sector with more than US$1 trillion of big and small projects, followed by transport, power and energy.

As we draw closer to key economic milestones set by regional governments including UAE Vision 2021, we will see several new projects being announced and coming online, fueling a continued demand for logistics services. Projects that support the logistics industry directly, such as dedicated freezones with purpose-built infrastructure and the increasing network of airports and seaports, will strengthen the region’s trade potential. This is further to economic trends such as a rise in e-commerce, with a projected growth of 16.4 percent over the next three-and-a-half years.

Agility’s Emerging Markets Logistics Index identified emerging markets to be in a period of relative stability, but not without risks in the form of tech-driven “deglobalisation.” There will be opportunities and challenges in companies producing as close to end markets as possible and incorporating technologies such as improved automation, computerization and 3D printing. With a commitment to diversifying their economies, countries in the Middle East region are encouraging non-oil growth, creating jobs and attracting new investment.

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Foreign direct investment remains the largest external source of finance for any developing economy. It makes up 39 percent of total incoming finance in developing economies. However, funding from within is also supporting such growth. In the UAE, the Abu Dhabi government’s economic stimulus package will create even more active space for small to medium enterprises and private-sector companies to start, grow and consolidate their businesses, as well as encourage local production.

The International Monetary Fund expects economic growth in the Gulf Cooperation Council, or GCC, countries to reach 2.4 percent in 2018, with further growth in 2019. GCC infrastructure projects will continue to see large-scale investment, with government expenditure expected to hit US$288 billion through to 2020.

Overall, emerging markets growth prospects look brighter than they have in years to logistics industry executives, who say small and medium-sized companies are the most likely to benefit from fresh acceleration of those economies. Various editions of the Agility’s Annual Logistics Index have reviewed the competitiveness of these economies in terms of market size and growth, business climate, infrastructure and transport connections. It’s now easier to start or buy a business, to commercialize a good idea and to find and hire talent than ever before.


Mohammad Jaber is COO Agility (Abu Dhabi) PJSC and Regional Director for PL,MEA for Agility.

Photo credit: Shutterstock



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