MENA REGION: A 2030 SCENARIO

GCC:

By 2030, GCC’s “share” of the total Arab economy (as defined today) would have grown by 25/30% (2-3% GDP Annual Growth difference between GCC & rest of the Arab world for the next 10 years. After that the annual growth gap will shrink (on average would generate 20-30% differential growth). 

MOROCCO:

Morocco, is another new Arab economy that will expand its economic market share of the total regional economy as defined today and will start to command recognition.  (1) Morocco is large, (2) managed a smooth Arab Spring transition, (3) is stabilized by a reasonable monarchy and (4) driven by need.

Growing at 5%-6% (with only 2% inflation and a stable currency) over 10-15 years will mean some 3% to 4% per annum better than the rest of the Arab World and 2% better than the GCC. This over 10-15years would mean 40% growth in its relative importance to the group than what it holds today.

Rising to North African and definitely Magrib prominence, and drawing in central and Western African economies to its increasingly regionally influential economy and market place.

 OMAN:

Another economy to watch is Oman, very much the Moroccan story, on a smaller scale, however with a little help from oil and an increasing role as a major sea hub.  Oman may also develop some economic influence with its traditional links in East Africa.

 TURKEY:

Turkey is the biggest new development, it is the never expected (25 years ago) participant to this region. By 2030 Turkey would most likely be the 10th largest global economy. It will draw in the (1) Caucasus economies (2) a lot of the Black sea region economies, and (3) The Balkan’s to its expanding vibrant and large economy.

It will definitely pull the whole “Levant” into it, where those economies will not be able to resist being part of that sizeable, fast growing economy, driving a lot of benefit’s and efficiencies to themselves by doing so.

This new addition to the region is major and will bring major expansion, efficiency, inter regional synergy and global critical size to this new MENA region economic block.

 ARAB SPRING & GCC:

The GCC having avoided much of the pressures of the early days of the ARAB SPRING, will find it very difficult to avoid that pressure in 10 years time.

Arab Spring Nations now driven by (1) stability, (2) new dynamic’s, (3) competitive politics, (4) increase transparency, (5) cheaper resources , (6) plenty of young manpower, (7) attractive valuations and the new found confidence and liberty would be growing at double the speed of the GCC economies.

The price they paid for change is now behind them and forgotten, the pressure will be very high on the GCC, who by now will have economies that are growing a little slower and the internal pressure mounting on them to introduce further political change.

EMERGENCE OF A NEW ECONOMIC BLOCK: (see map below)

As discussed, a new Economic Block will emerge to replace and overtake MENA. This new Economic Block will be much more “economically” integrated as opposed to just sharing “culture, history and language”.

This new regional economy will need a new name, other than “MENA,” I like to call it the “NEAR ORIENT.”

It will include the Middle East but the new Middle East will now include Turkey (this takes nothing from Turkey being a part of E.U but adds to it), and Turkey will include an economic region that includes parts of the Balkan’s, Caucasus and Black Sea with it.

North Africa but North Africa will include an economic zone that will stretch to include most parts of West, Central and East Africa.

It will include the GCC but that will include in its economic zone Pakistan & Afghanistan and possibly parts of East Africa.

With Turkey increasing weight, it will most likely become the New Political and Economic Hub for the region (which was in Cairo then moved to Riyadh and now preparing to move to Ankara & Istanbul) with sub hubs in GCC, Cairo & Morocco.

This would also happen because the GCC will be internally focused (to some extent) managing the delayed impact of the Arab Spring.

201306_MENA-Region---A-2030-Scenario_MAP.jpg

NOW HOW INTEGRATED WOULD THIS REGION BE ECONOMICALLY?

Well we can already see some of this today:

  • A single Media infrastructure , MBC, ARABIA, AL JAZEERA, OSN

  • One regional youth culture & music (Rotana etc)

  • Telecom: regional players (Zain/ Qtel/ Itisilat/ Viva)

  • Banking regional Arab Banks, definitely regional Islamic Banks

  • Travel hubs : UAE , Qatar , Istanbul

  • Regional Real Estate Developers: EMAR & others

  • Logistics

 Is TURKEY a part of this?  Yes.        

  • Telecom: Turktelecom

  • Media: Jazeera

  • Islamic Banking and Growing Arab Banks

  • Real Estate and others

 In the Arab World:

  • Turkish Contractors

  • Turkish fashion and Retailers:  BAYMAN , Grocery (BIM is a leading grocery in Morocco today)

  • Retail Products: Processed Food, Confectionery

  • Tourism

  • Istanbul, a key large regional flight hub

  • Industrial Goods

  • Turkish TV Soap Operas

IRAN:

Iran by now and during most of this period, would most likely be very busy internally managing a transition into a more liberal political system, (possibly leading to the change of “Wilayat Al Faqieh” from the political system) and working on fixing its troubled economy and mending its image in the Arab World (destroyed by its Syria Policy).

HEZBOLLAH:

Damaged by its venture into Syria and weakened further by Iran pulling inward will diminish into a small Lebanese party and Lebanon’s Shia Community will revert to its traditional leadership. Lebanon by then as the rest of the Levant would very much be a part of the new Turkish Economy and sphere of influence.

ISLAMIC BROTHERHOOD PARTY:

The Islamic Brotherhood Party will most likely see its power base trimmed down and the Arab Spring Nations would most likely by this time be lead by a new liberal conservative or conservative liberal (anyway you would like to see it) center parties. Primarily a result of the Brother Hood party making the mistake of:

  1. Taking full responsibility of the immediate transition period, a period where no one can succeed.

  2. Not paying enough attention to the new virtual youth.

  3. The emergence of new liberal conservative or conservative liberal parties.

ISRAEL:

With Turkey’s rise to prominence Israel can not afford not be a friend to Turkey. Its role as a regional tool for USA regional policy will diminish with the diminishing importance of GCC oil to the USA and the pull back of Russia from the region.  By now, Israel would want to live in peace, be an active member of the regional economy, avoid conflict and integrate and dissolve into the region. Israel might even by then start to see value in Israeli Arabs and the adjacent Palestinian State helping it build a gateway to this growing regional economy.

USA/GCC RELATIONS:

By 2030 the USA would be more an outside member of OPEC rather than a client (sort of more like Russia today).

The GCC would not be critical to its energy needs, most likely by then the USA is a net exporter of products. However, being the primary Global Power it will have interest in the GCC for a number of reasons:

  1. The GCC will still be important for determining the Global price of oil.

  2. The GCC will still be critical to USA Allies and to anyone that wants to challenge USA global supremacy.

So the USA can reward or punish by allowing or making it difficult for others to have access to energy.

As for the GCC it will need to protect its sea routes, its primary distribution channels to its customers and secure its production facilities. There is no one with that capability globally but the USA (and should there be an alternative, its most likely that the GCC would not outsource securing its trade routes to a client, if it has the option, so as not to restrict its marketing and distribution strategies) and hence the same strong relationship but less tense and more comfortable now that the USA is not a customer but a partner.