Connect with us


The impact of coronavirus on Gulf economies


Thu 5th March 2020

The impact of coronavirus on Gulf economies

Jonathan Fulton

Travelers wear masks upon arrival at Dubai International Airport (Reuters)

As the world responds to the coronavirus, public health is of course the number one concern, and by examining how it affects the Gulf Cooperation Council (GCC), it is certainly an issue. Iran has become the most affected state after China, and with that there has been an increase in caseacross the Middle East,resulting in concerns about the capacity of regional health systems to cope with the pandemic.

Beyond the obvious public health crisis, the coronavirus has had a significant impact on the economies of the Gulf, as it has done with other countries in the world. What sets the GCC states apart is the damage that can be caused by a Chinese slowdown. The consequence of an overdependence on energy exports, long regarded as a structural weakness of their economies, has become even more apparent.

At the start of the epidemic, the GCC states publicly expressed support for China and Gulf leaders sent aid. The iconic Burj Khalifa of Dubais was lit solidarity, displaying the Chinese flag and the Chinese phrase, Lets go Wuhan! Saudis King Salmanengaged to send an appeal to President Xi Jinping and to Qatarshipped five freighters carrying 300 tonnes of medical supplies, donated by Qatar Airways. Material and moral support was appreciated and the United Arab Emirates was honored when the spokesperson for the Chinese Ministry of Foreign Affairsincluded in a list of statutes that offered sincere and friendly understanding, support and help.

It is not unexpected. In recent years, China has become the main economic partner of the GCC and, in both directions, the political and diplomatic reach has been considerable. When the Crown Prince of the United Arab Emirates Mohamed bin Zayedtold mehis country confident in its ability to overcome this crisis is ready to give all its support to China, it signaled an important message of support to one of the most strategically important partners of the United Arab Emirates.

Despite promises of support, the coronavirus has had a significant impact on the economies of the Gulf and the line between sensitivity and vulnerability has blurred somewhat. Economic relations have been the foundation of bilateral relations between China and the Middle Eastern states, with Chinese consumer and industrial products making a big breakthrough in MENA markets. Trade between the GCC and China is different, however. As a natural consequence of energy exports from the Gulf, trade is strongly balanced in favor of the Gulf countries. The UAE, with its re-exports from Jebel Ali, is an exception, constantly buying more from China than it sells. (It is worth noting that Bahrain does too, although the volume of bilateral trade is negligible.) In the good times, it is very good indeed, with substantial income in the coffers of the country. ; Gulf State.

The obvious downside is that losing a major market like Chinaeven can temporarily hurt. To some extent, this is true for all states. However, the Gulf States are particularly dependent on energy to boost their economies, with 85 to 90% of federal budget revenue coming from energy exports. This is compounded by the fact that 67% of energy exports from the Gulfsold in East Asia, which means that other non-Chinese trading partners are also suffering economically and cannot catch up.

Oman is a case study on vulnerability; in 2017, China represented around 44% of its exports. This figure is down slightly from the previous year, when it was around 48%. In the summer of 2017, a group of Chinese financial institutions issued $ 3.55 billion readywhich allowed the Omani government to cover its budget deficit. At the end of last year, the state-owned Oman Electricity Holding Company sold 49% staketo Grid Corporation of China, raising $ 1 billion. Despite this, the government still forecast a budget deficit of more than $ 7 billion in 2019, or approximately 9% of its GDP. With an economy already in difficultyThe disconnecting China hits Oman particularly hard.

The other Gulf States are less vulnerable but still quite sensitive to the Chinese economic slowdown. Saudi Arabia has taken advantage of a windfall with US sanctions against Iran, leading to a dramatic increase in oil exports to China,up nearly 100 percent between August 2018 and July 2019. Before the coronavirus epidemic, China held on average between 1.8 and 2 million barrels per day from Saudi Arabia; thisfell 500,000 bpd. Although much less indebted than Oman, the Saudis are very sensitive to the sudden slowdown in demand from the world's largest oil consumer.

One thing that is becoming more and more evident in the Gulf is the desperate need for sustainable economic diversification. All GCC states have launched Vision development programs that are designed to move them away from rentier, single-resource models in the hope that they can move to post-hydrocarbon models. However, these programs rely on the revenues from energy exports to develop their post-energy sectors, and the drop in oil prices in recent years is putting a strain on these efforts. The current shock to the global energy markets, with pricesdown about 15 percentt since the start of the year it has been particularly difficult to manage.

Beyond the impact on trade, other economic effects have already affected the Gulf. Saudi Arabia has suspendedUmrahan Islamic pilgrimage to Mecca which can take place at any time for citizens and residents, and a suspension of the entry of foreign pilgrims coming to visit Mecca and Medina. Beyond the religious consequences for those affected, there is also a material result, as the pilgrimage is an important source of income for Saudi Arabia. Dubai, the rare regional economy not based on energy, is no better off. Its hotel industry has experienced a boom in Chinese tourists in recent years, receiving nearly a million in 2019. Hotels already had their lowest averagedaily tax since 2003, and with the reduction of business travel and the cancellation of conferences, this sector has experienced a coronavirus crash. With so much ridingDubai Expo 2020, the threat of a protracted public health crisis could be devastating for the economy of the emirates. Although more resilient, Abu Dhabi also feels the impact; a cycling race to be held in late February was canceledwhen two Italian participants were diagnosed. As a result, two of its five-star Yas Island hotels, Crown Plaza and W, were Locked.

Although a global pandemic is not limited to economic problems, it highlights some of the strengths and weaknesses of state capacity. For the GCC states, one of the main points to remember is the urgent need for their visions to come true.

Jonathan Fultonis a senior non-resident fellow at the Atlantic Council and an assistant professor of political science at Zayed University in Abu Dhabi. Follow him on Twitter:@jonathandfulton.

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos

picture credit


to request, modification Contact us at Here or [email protected]



Leave a Reply

Your email address will not be published. Required fields are marked *