{"id":583715,"date":"2023-03-20T00:00:00","date_gmt":"2023-03-20T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/20\/the-gcc-is-probably-the-fastest-growing-economic-bloc-in-the-world-today\/"},"modified":"2023-03-20T00:00:00","modified_gmt":"2023-03-20T00:00:00","slug":"the-gcc-is-probably-the-fastest-growing-economic-bloc-in-the-world-today","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/03\/20\/the-gcc-is-probably-the-fastest-growing-economic-bloc-in-the-world-today\/","title":{"rendered":"The GCC is probably the fastest-growing economic bloc in the world today"},"content":{"rendered":"<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\"> Global trade flows and supply chains have just about managed to emerge from the long shadow<\/span><span style=\"font-weight:400;\"> of the covid-19 crisis. Even now, key commodities are still some months away from heading back to normalcy. For confirmation, just ask carmakers about semiconductor supplies they need for all their fancy models.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">But chances of a smooth ride for global trade in 2023 will hinge more on whether a recession<\/span><span style=\"font-weight:400;\"> will show up, in full force or even partially. Plus, recent floods and nature-linked crises will have their own bearing on commodity movements and, by extension, on their prices.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">Globally, we have seen a decline on some of the leading indicators for trade, and demand for<\/span><span style=\"font-weight:400;\"> goods has slowed somewhat. Despite this, some markets have proven to be more resilient than others \u2014 the UAE is one of them.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">During my recent visit, it was apparent how agile the government is in enabling businesses to<\/span><span style=\"font-weight:400;\"> rapidly adapt to the macroeconomic environment. The high oil prices, solid logistic capabilities and the strengths of intra-regional trade flows \u2014 especially with Saudi Arabia \u2014 coupled with a healthy local demand, have helped support the economy.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">I believe global trade is now at a critical inflection point. Global supply chains have been under<\/span><span style=\"font-weight:400;\"> significant stress in the last two years; businesses have been impacted and these disruptions have resulted in a rethink of the relationship between clients and suppliers, including the need for nearshoring \u2014 or even in-country value creation \u2014 in an effort to ease the access to finance between clients and suppliers.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">The market is accelerating towards more structured trade, especially on supply chain finance.<\/span><span style=\"font-weight:400;\"> We have seen increased interest from governments, public sector entities, multinationals, and large corporates to leverage their balance-sheets\u2019 strengths to allow financing for the benefit of the economy and within their supply chains.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"font-weight:400;\">Supply Chain Finance (SCF) will continue to gain popularity during this period of uncertainty.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"font-weight:400;\">Financial institutions can play a pivotal role in facilitating trade, with around 40% of global goods traded being supported by bank-intermediated trade finance.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">For HSBC, supporting international trade has been at the heart of our business model since we<\/span><span style=\"font-weight:400;\"> were founded in 1865. Today, we facilitate approximately USD 740 bn of trade each year. And trade remains key to our future ambitions.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">Trade finance has for centuries been paper-based, but blockchain provides a way to boost<\/span><span style=\"font-weight:400;\"> efficiency, increase transparency, and streamline supply chains. Broader usage of technology to track shipments has taken hold, and blockchain is one among a number of underpinning technologies that are helping global trade evolve.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">When blockchain technology is adapted at a large scale, it will have the power to transform the<\/span><span style=\"font-weight:400;\"> world of trade by improving speed of processes, customer experience and providing a paperless experience.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">As the world\u2019s largest trade bank, we have a key role to play in the wider transformation of<\/span><span style=\"font-weight:400;\"> global trade. We act as a catalyst to allow the most successful and disruptive technologies to energize the market, as well as provide an opportunity to unlock the future of trade.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">Technology-driven efficiencies and the expansion to new digital platforms and channels are two<\/span><span style=\"font-weight:400;\"> of the major drivers of growth, and we have a responsibility to take such solutions to our clients by commercializing them and scaling things at pace.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">We are seeing different regional trends. HSBC Global Research\u2019s forecasts are for a slowed<\/span><span style=\"font-weight:400;\"> pace of global trade growth out to 2024 (3%), given the subdued demand outlook, particularly for goods in the West.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">A rebound in China could potentially boost global trade and things could be more positive, but if<\/span><span style=\"font-weight:400;\"> there is weakness in the second-half of 2023 or early 2024, trade could slow again.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">The GCC nonetheless enters 2023 from a position of strength. The region is probably the<\/span><span style=\"font-weight:400;\"> fastest-growing economic bloc in the world today, there is substantial investment in large scale infrastructure projects, and tourism is booming thanks to some of the best covid-19 management policies seen during the pandemic, all of which support robust local demand.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">Looking at the UAE specifically, the domestic economy continued to rebound in 2022, mostly<\/span><span style=\"font-weight:400;\"> driven by high oil prices and tourism. Expo 2020 in Dubai and the 2022 FIFA World Cup in Qatar have assisted in driving a sharp rebound of visitor numbers to the region.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">The budgetary performance has improved significantly this year, which clearly creates a<\/span><span style=\"font-weight:400;\"> supportive environment for governments in the UAE and across the GCC to deliver on their strategic visions. In MENA, it is estimated that about USD 4.3 tn of projects are planned or are underway across the region, which will help diversify the economy further. The investments across infrastructure, power and energy, transport as well as real estate and social services are continuing with a sense of urgency.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">Additionally, in Saudi Arabia, 15 mega-projects are ongoing and acting as a further catalyst to<\/span><span style=\"font-weight:400;\"> an already dynamic GCC economy.<\/span><\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><span style=\"\">This op-ed was written by Vivek Ramachandran (<\/span><span style=\"text-decoration-skip-ink:none;-webkit-text-decoration-skip:none;\"><a href=\"https:\/\/www.linkedin.com\/in\/vivek-ramachandran-653373\/\" style=\"\">LinkedIn<\/a><\/span><span style=\"\">), head of Global Trade and Receivables Finance at HSBC. HSBC\u2019s column appears in Enterprise every second Monday. A version of this article first appeared in Gulf News. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The region has proved more resilient in the face of global headwinds<\/p>\n","protected":false},"author":1,"featured_media":583716,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7351],"tags":[204,1304,490,6794],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-583715","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-a-message-from-hsbc","tag-banking","tag-gcc","tag-hsbc","tag-vivek-ramachandran","wpautop","entry"],"acf":{"mongo_id":"0fde3ead-5d0e-414d-8262-f7e660a750be","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2023\/3\/Abu-Dhabi-1600.jpg","photo_position":"below","homepage_title":"","full_issue_title":"The 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