UK trade commissioner to the region says higher oil prices to boost trade ties with Gulf
UK in talks with GCC for business opportunities in technology to healthcare
UK trade with the Arabian Gulf is expected to increase as higher oil prices boost spending by governments on key projects tied to the region's economic transformation plans, the UK's trade commissioner to the Middle East said.
The UK is in "active talks" with Gulf governments about doing business in sectors that are key to their economic diversification programs from technology to infrastructure, Simon Penney, the UK's recently-appointed Trade Commissioner for the Middle East, Afghanistan and Pakistan, told The National. Higher oil prices are set to swell state coffers and boost government investments in strategic industries.
"As government budgets are replenished that money will be spent and have a multiplier effect through the economy," Mr Penney said at the UK Embassy in Dubai. "The Gulf states are still dependent on government, a lot of industry is government-owned or government-related. It will have a positive impact."
Crude prices have rebounded to a four-year high of more than $80 a barrel on speculation that oil producers will be unable to keep up with demand. Bilateral trade between the UK and UAE increased 12 per cent to £17.5billion (Dh85bn) in 2017 year-on-year. The UAE is the UK's biggest export market in the GCC and 14th largest globally. It is the fifth largest market outisde Europe after US, Japan, China and Hong Kong. GCC countries are diversifying their economies and aiming to boost non-oil trade while Britain is seeking to strengthen its global trade ties in the event of a hard Brexit.
Mr Penney, an ex-banker who has worked with regional lenders before being appointed to his current role in May, says the UK will focus on matching its expertise to Gulf governments' ambitions to implement economic transformation plans across various sectors.
The UK is targeting export opportunities to the Gulf in new sectors where it can harness its technical know-how to initiatives in smart cities, artificial intelligence, fintech, healthcare and life sciences, Mr Penney said.
Traditionally, the three biggest UK exports to the UAE have centered on oil and gas services, aerospace including Rolls Royce engines that power widebody plane jets for aviation giants like Emirates airlines, and defence.
GCC countries have developed economic transformation plans to diversify and wean their economies off oil. They're doing this by focusing on boosting non-oil revenues, improving state finances, boosting jobs and partnering with international companies to spur the transfer of knowledge to develop local capabilities.
The UK is also seeking more opportunities in infrastructure projects in the GCC amid the region's push for privatization in sectors from transport to energy. This would include supplying UK architects, consultants and contractors in projects where governments are seeking private sector partners to develop airports, ports, transport networks and education or healthcare infrastructure.
The drive for privatisation in countries such as Saudi Arabia has been accompanied by drafting public-private partnership laws to create a clear legal framework for projects to progress.
Bilateral trade between the UK and GCC grew 14.8 per cent to £40.1bn in 2017 from the previous year. The GCC is the UK’s fourth largest export market for goods outside of the EU after the US, China and Hong Kong.
Updated: October 11, 2018 08:18 PM