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Abu Dhabi, UAEMonday 17 December 2018

Eyes of the world turn to the Middle East

Countries that PwC expects to be the world’s biggest economies by 2050, respectively, are rapidly widening their footprint on the Arabian Peninsula

US president Donald Trump has caused waves around the world. Carlos Barria/Reuters
US president Donald Trump has caused waves around the world. Carlos Barria/Reuters

In a word, you could say that the Trump Doctrine for Global Stability is the same as it is for most of his engagements - to Tweet, to bully, to insult and to brag – in essence to remind the world that as a person and as a country that the Donald and the US has an "Awesome" power capacity.

“Build a Wall” has been replaced with “Rocket Man, Don’t Test me!”

Each year is related to a Chinese zodiac animal according to the 12-year cycle – 2017 is the Year of the Rooster. The rooster in Chinese culture is almost the epitome of fidelity and punctuality – for ancestors who had no alarm clocks, the crowing was significant, as it could awaken people to get up and start to work.

Another symbolic meaning the chicken carries is exorcising evil spirits. We could perhaps do with a bit of those powers given the level of “fire and fury” that has been rocking the world since the alarms started ringing to get us off the beaches and back into the office with the end of summer.

In the past few months alone, we have had the threat of nuclear war surface in Asia, alongside once in a lifetime earthquakes, fires and hurricanes ripping through the Americas and drowning the fourth-largest city in the US. Quietly, in the background and grabbing few headlines, thousands of people were killed by flooding and landslides in northern India, Nepal and Bangladesh, which itself is trying to absorb hundreds of thousands of refugees fleeing genocide in Myanmar.

And yet few alarm bells are ringing. Why?

The stock markets globally still want to dance to the music of double-digit leaps to new records every week and, while increasingly more voices are warning that the band resembles the orchestra on the Titanic, most central banks refuse to take away the punch bowl of free money and just keep on printing. And the Trump grab of Jerusalem away from the Palestinians could prove to be another wild card of instability in 2018.

Perhaps the mad hunger for bitcoin is the cuckoo in the coal mine of all this hubris...

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Read more:

Trump secures tax victory

Money year in review: Despite doom predictions, the upward trajectory continues

Year in Review: Populism was on the march in 2017

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In a parallel corridor, crude oil finally appears to be responding to some geopolitical volatility as it holds above $60 a barrel for first time in two years, with instability in parts of the Middle East, and drums beating on possible nuclear war in North Korea, which tested a hydrogen bomb blast in the third quarter that was so strong it sent earth tremor shock waves around the world three times.

People born in the Year of the Rooster according to the Chinese zodiac, have many excellent characteristics, such as being honest, bright, communicative and ambitious. Most of them, it says, are born pretty or handsome and have a preference for dressing up. In daily life, it is believed they seldom rely on others, they might be enthusiastic about something quickly, but soon become impassive.

In either case, it strikes me that we need the proverbial Rooster to crow much louder, or for hearing aids to be distributed to all those baby-boomers in the US Congress. There is help around the corner as 2018 is the year of the Earth Dog and its characteristic word is "action!"

As we enter an era of G-zero – no nation or one group of nations ruling the world – it is Mr Trump’s "America First" protectionist philosophy that topped the voting poll in a GIQ Industry Survey earlier this year, as the global risk with the greatest potential impact on the Middle East (ME). And unsurprisingly so. An oft-unpredictable Trump, known for his antagonistic rhetoric, is deepening his engagement with the Arab world at a sensitive time. Testy sentiment following the Arab Spring lingers and some of the neighbours of the region’s energy producers – home to a third of the world’s oil exports – are beset by civil war and poverty.

Mr Trump faces stiff competition for Middle East energy alliances, even if the US own growing energy independence has sharpened his bargaining power. The jostle by the world’s emerging behemoths for this region’s assets continues, with China’s "One Belt, One Road" initiative and India’s "Think West" policy. Countries that PwC expects to be the world’s biggest economies by 2050, respectively, are rapidly widening their footprint on the Arabian Peninsula. Riyadh and Beijing signed US$70 billion in deals in August alone, while trade between India and the Gulf soared to $137.7bn in 2014-2015 from $5.5bn in 2001.

Russian firms are also deepening their political influence with a shopping spree; more than $10bn worth of projects are underway in Saudi Arabia and Moscow recently tied up deals worth $30bn with an increasingly-ambitious Iran. And this is just the tip of an ever-growing geopolitical iceberg - so ME energy companies must be savvier than ever. American actor Will Rogers said it well in the early 1900s: “Even if you’re on the right track, you’ll get run over if you just sit there.” Eyes must be open.

The year of 2016 saw extraordinary change for some countries’ energy security, which has created a dynamic landscape in 2017. The US, for example, became a net exporter of gas for the first time in 60 years and LNG cargoes set sail for Dubai and Kuwait. It has been nearly 120 years since the US regularly used the maritime route to transport oil to the Middle East.

Sean Evers is the founder and managing partner of Gulf Intelligence, a strategic communications and research firm covering the Middle East energy sector