A new infrastructure boom in the Middle East?

Lessons from the Arab Spring

Many Middle Eastern countries are still reeling from the political and economic consequences of this year's Arab Spring. Long established Middle Eastern leaders have already fallen. Others have been threatened. The growing consensus is that political, economic and social factors all played a pivotal role in driving unrest across the region. Those thus far unaffected by the political fallout seem to have learned lessons from their neighbours' painful experiences and to have recognised that political change alone will not be sufficient to stem the tide. A number of governments in the region therefore are poised, or have already begun, to invest heavily in large scale infrastructure and utilities programmes – in marked contrast to the sharp fall in infrastructure investment, which followed the post-2008 economic downturn. The aim is clear: Provide jobs and hope for growing numbers of the unemployed and economically challenged, particularly the young, and you have a better chance of managing unrest peacefully.

Investing in infrastructure to achieve long term benefits

This change of outlook and policy is creating exciting new opportunities for foreign investors willing to take on the challenges of the region. Experts estimate that Middle Eastern states will invest between $150bn and $200bn in infrastructure over the next ten years, and even more in the longer term. Much of this will be spent on plans intended to satisfy people's everyday needs and to create sustainable employment in the long term, as governments seek to deliver widespread economic prosperity to help ensure political stability.

Planned projects in leading Gulf states include new power plants, waste water treatment systems, oil and gas infrastructure, roads, airports and port facilities. In the UAE, celebrating its 40th birthday this month, Dubai's Al Maktoum International airport is set to receive its first scheduled passenger flights to take pressure off the Emirate's older airport. Bahrain, too, is expanding its international airport. Saudi Arabia, where King Abdallah has approved very substantial funding for new infrastructure across a range of sectors, is aiming to treble passenger capacity over the next twenty years. The Saudi Council of Ministers gave the go-ahead earlier this month to the implementation of a $25bn project, which will eventually link major Gulf Cooperation Council (GCC) countries through a 2,117-km railway network.

Working with Intelligence in the Middle East

Investing in the Middle East at this time offers considerable potential benefit for businesses with the vision and the enterprise to benefit from these developments, but it is not without risk. Given recent political and socioeconomic upheavals, it is particularly important to identify and understand what these risks are and how to mitigate them to maximise the benefit. Pasco can help. We have successfully conducted several hundred assignments in the Middle East over the last three years, and our staff have the skills and the experience necessary to enable you to engage successfully in business in the region. Whether you require expert briefing on local economic and business conditions, due diligence on potential business partners to ensure your compliance with the FCPA, the UK Bribery Act and other relevant legislation, or advice and training to enable you and your employees to live, travel and work safely we can deliver what you require to seize the region's potential safely and successfully.