China is expected to be the GCC’s most important economic partner by 2020, according to a new report by the Economist Intelligence Unit (EIU).
The emergence of China and India and the growing economic importance of sub-Saharan Africa present massive opportunities for the GCC, the report said.
“To capitalise on these opportunities, GCC countries will need to strengthen their labour markets and improve their regulatory environments,” the EIU added.
By 2009 the emerging-market share of GCC trade had reached 45 percent, according to the report, up from 15 percent in 1980, with an average of 11 percent per year growth, as the region looks to shift investments from developed to developing countries.
As well as China, South Korea, Singapore, Malaysia and India will remain important as providers of technology and know-how for GCC states, the report said.
It added that trade with Africa will focus on agriculture, with the region investing in Africa’s arable land and establishing export-oriented farming businesses.
The EIU said that Asia will be the most important emerging-market region for the GCC because of its rising demand for oil.
In Asia and some parts of the Middle East, GCC countries will invest heavily in infrastructure, the report added.
“Large populations and a shortage of capital in Asia provide an ideal opportunity for the GCC to fill the gap. In the Middle East, growth in Iraq has put a strain on the poor infrastructure, creating further investment opportunities,” the EIU said, adding: “Tourism and telecommunications, as well as the housing industry, offer attractive opportunities for GCC investment in Asia and the Middle East.”
The region’s shift from developed to developing countries as trading and investment partners is explored in a new report from the Economist Intelligence Unit, GCC trade and investment flows
Globally, emerging markets are seen driving growth in the years ahead. Around two-thirds of the world’s economic growth will be generated by emerging markets in the next five years, according to EIU forecasts.
By 2015, emerging markets are projected to account for 41 percent of global GDP, compared to an estimated 31 percent in 2011.