The City is well-placed to help fast-growing economies diversify
A recent statistic has been stuck in my mind over the past few weeks. I read that the G7 nations currently account for around half of the world’s total economic output, but that the figure will fall to about a quarter by 2050. This simple fact explains why countries like the UK are so keen to build closer economic ties with emerging and fast growing markets.
No region has grown as rapidly over the past few years as the Gulf. Look at photos of Dubai, Doha or Riyadh from 10 or 20 years ago and those places will be unrecognisable. That is why I am penning this piece from the United Arab Emirates (UAE). I’ve already been to Kuwait, Oman, and Saudi Arabia in the past week, and I’m heading to Qatar tomorrow, thus completing my 12-day visit to the Gulf Cooperation Council.
Previous lord mayors have visited the region, reflecting its importance as a bilateral trade partner for the UK. The objectives have always been similar: we want to deepen our economic ties, open doors to new business, bid for lucrative contracts, and encourage the foreign investment we all want to see.
However, my visit has been given a different slant to those of my predecessors. The current volatility of the Swiss franc and the price of oil continues to dominate the news agenda. All the Gulf states are affected by these circumstances, but from what I have seen during my time here, they certainly appear to be equipped to deal with it. I have been particularly impressed by the steps they have taken to diversify their economies.
Examples include massive investment in education and large-scale physical infrastructure, the development of finance centres, and legislative steps to encourage entrepreneurship and innovation. Combined with the sector-specific strategies they have – such as the development of airlines and logistics in the UAE, downstream petrochemicals and mining in Saudi Arabia, and the SME sector in Oman, to name but a few – diversification in the Gulf is both well understood and well underway.
This is where the City can step in. I have brought a wide-ranging business delegation with me on this visit, and it serves two purposes. First, it allows those that join me to broaden their network of contacts and meet senior government members, regulators and business leaders in important international markets. But it also demonstrates to our hosts that the City – and the entire UK – is full of the wide range of skills and expertise that countries need to fulfil their ambitions. From investment banks to asset managers, insurers to legal services and education providers, I am able to show off just what we can offer to the Gulf states as they embark on their bold economic reforms.
That’s why, when I return from these visits, I hope that the UK remains firmly in the minds of the Gulf’s political and business leaders as the natural partner of choice.