Senior finance executives in the Middle East upbeat despite uncertainty

Senior finance executives in the Middle East upbeat despite uncertainty
In Saudi Arabia, 71 percent of finance executives expected strong or modest growth this year. (Reuters)
Updated 19 June 2019

Senior finance executives in the Middle East upbeat despite uncertainty

Senior finance executives in the Middle East upbeat despite uncertainty
  • Some 72 percent of those polled regionally thought they would see economic growth this year
  • The report also highlighted the core importance of next-generation technology and innovation on corporate dynamics

DUBAI: Senior finance executives in the Middle East are less optimistic about the prospects for economic growth than they were 12 months ago, but remain positive on the outlook for their companies and investments.
That was the main finding for the region of an international poll conducted for American Express, the global financial services firm, by Institutional Investor, the business information group, and presented to media and corporate clients in Dubai yesterday.
Mazin Khoury, chief executive officer for American Express in the Middle East, said financial executives were “operating in unsettled times.” Despite this, “they are concentrating on their day-to-day business but keeping an eye on the future,” he added.
Some 72 percent of those polled regionally thought they would see economic growth this year, compared with 92 percent last year, in part due to oil price fluctuations. Only 10 percent said there would be a significant contraction in growth.
In Saudi Arabia, 71 percent of finance executives expected strong or modest growth this year, roughly the same as in the UAE. Amex noted that “despite oil prices rising in early 2019, long-term global trends point to more supply and less demand.”
The poll was taken late last year, before even greater recent volatility in the global oil markets, as well as worries about global trade and faltering economic growth.
A majority of them — some 64 percent — thought that “socio-economic changes and global trade policy” would strengthen their companies’ growth prospects, with only 5 percent expecting these factors would weaken their outlook. That was broadly in keeping with global averages, Amex said.
“Expanded foreign trade will be based more on organic strategies than partnerships, the executives through, with most companies likely to set up or expand foreign operations and use online media for marketing to pursue international growth strategies,” in a sign of a more nimble approach to foreign trade in the Middle East.
The report also highlighted the core importance of next-generation technology and innovation on corporate dynamics, as well as the importance of young people under the age of 24, as both customers and employees.
Some 78 percent of respondents said they had explicit strategies to appeal to “Generation Z” consumers, who make up between 50 and 64 percent of regional populations.
The report did not include data relating to consumer spending by Amex customers. Khoury said that his business had not seen any impact from recent negative trends in economics or geopolitical factors.
“If it happens it will not affect American Express alone, but there has been no impact. It is too early to judge,” he said, referring to increased tensions in the Arabian Gulf region.
“Our customers are still calling us to book their travel, we are still engaging with corporates
and signing new corporates. They are continuing to spend,” he told Arab News.


Oman’s new parliament law shrouds budget talks in secrecy

Oman’s new parliament law shrouds budget talks in secrecy
Updated 18 January 2021

Oman’s new parliament law shrouds budget talks in secrecy

Oman’s new parliament law shrouds budget talks in secrecy
  • Last week, the sultanate’s ruler announced a constitutional shakeup that included the appointment of a crown prince for the first time
  • Oman, a small oil producer, has piled up debt at breakneck speed in the past few years and its finances have been battered by low oil prices and the coronavirus pandemic

DUBAI: Oman has introduced a new law for parliament stipulating that state budget talks and the questioning of ministers should be carried out in secret, reducing transparency as the indebted state tries to tackle its creaking finances and shore up the economy.
Since assuming power a year ago, Sultan Haitham bin Tariq Al-Said has overhauled government and state entities and begun pushing through sensitive fiscal reforms such as reductions in subsidies and the introduction of a value-added tax, which had dragged down his predecessor the late Sultan Qaboos.
Last week, the sultanate’s ruler announced a constitutional shakeup that included the appointment of a crown prince for the first time and new rules on how the bicameral parliament, the Council of Oman, would work.
The new law, published in the official gazette on Sunday, states that discussions in both the elected lower house and the appointed upper house on draft development plans and the state budget should be conducted in secret as should sessions for the questioning of ministers. The previous Basic Law did not specify such secrecy.
S&P Global Ratings said on Sunday it believed fiscal austerity measures would be introduced gradually “to maintain socio-economic stability” in a country that saw Arab Spring-like protests in 2011 over unemployment, corruption and political reform.
It said that recent institutional reforms including establishing a clear line of succession would improve predictability and political stability but that high fiscal and external deficits, subdued economic growth and high youth unemployment still presented significant challenges.
Oman, a small oil producer, has piled up debt at breakneck speed in the past few years and its finances have been battered by low oil prices and the coronavirus pandemic.
Rated sub-investment grade by all major credit rating agencies, it faces a widening deficit and large debt maturities in the next few years.