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MENA’s Trade Volumes and Jobs Will Surge as Confidence Grows Stronger and New Projects Start

Middle East : 16 October 2011

Confidence Reigns in MENA’s Private Equity Sector

A report focusing on MENA’s private equity sector (or PE) was released by INSEAD Abu Dhabi and PricewaterhouseCoopers and entitled “The Next Five Years MENA PE.” Robust and based on regional interviews and surveys, the report called on private equity firms and their partners with investments in the MENA geographical area.

A broad range of questions and topics were covered, including the impact of global events, the protests that occurred in the region and emerging dynamics in the PE industry. The results displayed that confidence will remain high for the rest of this year.

Optimism is based on many factors, but the fact that the GCC has been nearly immune to the protests seen around the region is a major driving force. The GCC region also remains ripe with economic prospects. The report reveals that confidence in PE has returned to nations that were hit hard by the worldwide recession and the tumultuous spring season.

Confidence seems to be especially high in certain sectors, including education, oil and gas, healthcare and consumer goods. These sectors will experience benefits due to regulatory changes and expenditures within the government. Massive capital spending in other sectors, such as utilities, ports, rail and toll-roads, are also drawing investors.

Trade Volume in Qatar To Surge By 160 Percent

An HSBC official reported that within the next 15 years Qatari trade volume was forecasted to surge by 160 percent. Short-term trade growth will be 15.82 percent over the next twelve months, compared to 9.77 percent growth last year.

The HSBC Trade Connections reported that, at the close of 2010, Qatari trade made up 0.25 percent of global trade. Trade forecasts anticipate substantial growth, specifically in the short term, at rates that are far above the global average. Expectations for Qatari trade volume state that a 160 percent increase will be seen between now and the close of 2025.

Qatar has been established as part of a core trading route between Asia and the balance of the Middle East, specifically Korea, the UAE, Singapore, Japan and India. Merchandise trading value is forecasted to grow from $67 billion in 2010 to $204.2 billion in 2025.

MENA trade volumes will increase 84.7 percent from now until 2025. This is far above the average world trade increase of 73 percent, according to the head of HSBC Commercial Banking for MENA, Tim Reid.

During a video-conference Reid stated that the HSBC has committed to facilitating $750 billion in world trade over the next few years. HSBC noted that opportunities for global companies would increase, as year-on-year global trade growth forecasts of $1 trillion will occur until 2015. Egypt’s trade volumes are forecasted to surge 270 percent over the next fifteen years. The nation’s merchandise trading value will rise from $71 billion last year to $201.83 billion in 2025. Qatar is expected to see a 160 percent increase over that same period.

Construction Begins In New Doha Port

The first of 21 contracts available during the initial phase of construction was awarded to a Chinese firm.

Qatar’s Crown Prince Shaikh Tamim Bin Hamad Al Thani put the foundation stone in place for phase one of Mesaieed’s New Doha Port. Slated for completion in 2016, the port project is valued at 25.6bn riyal (or Dh 25.7bn).

The project will be completed over three phases. Phase two will begin in 2020, with the third scheduled to begin in 2030.

Completion of the New Doha Port, which will stretch 26.5 square kilometers, will result in 6 million TEUs (or 20 foot equivalent units) of cargo handling capacity. This amount is about 14 times the current capacity, according to officials.

The largest ships in the world will be welcomed into the port. New Doha Port will find a place among the world’s largest deepwater ports, according to a recent media report.

The port is also a key driving force in Qatar’s economy. It will contribute a significant amount to the GDP and present impetus for development in the nation.

Economic zones currently being established, as well as the growing Mesaieed Industrial City near Doha, will likely experience the advantages of the new port. Congestion in Doha should be relieved as the new port moves into operation.

Abdul Aziz Mohammad Al Nuaimi, heading up the port’s steering committee and chairman of the Civil Aviation Authority in Qatar, noted that a canal will be dug during the opening phase of the project. Around 3mn cubic metres of sand and rock will be removed during phase one and 2.7 km of wave breakers will be constructed.

The contract to dig the 17m deep dockyard and construct the port quays, valued at 3.2bn riyal, was awarded to a Chinese firm.

Al Nuaimi stated that local businesses will carry out over 50 percent of the work on this project, creating 20,000 jobs.

Al Nuaimi spoke during the ceremony to open construction, quoting Emir Al Thani who said that broad developments in Qatar were vital in the efforts to progress and achieve prosperity for Qatari citizens. Al Nuaimi stated that this idea forms the basis of the Qatar National Vision 2030, targeted to move Qatari towards sustainable developments across all levels of the nation.

Qatar has earned the trust of the global community, as evidenced by the nation winning the honour of hosting the Fifa World Cup in 2022. Realization of the Qatari vision has been steady, allowing Qatar to stand out on an international scale.

Nabeel Al Buainain, project manager, revealed plans to link the New Doha Port with the international airport of the same name by rail.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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