The event, led by experts in their respective fields, highlighted key growth areas as well as challenges for the year ahead
‘The 2017 Economic Outlook’ discussion recently hosted at Capital Club, Dubai’s Premier Private City Club and member of the ENSHAA group of companies, offered Members key insights into what to expect in the coming year regarding the region’s economy. Moderated by Frank Kane, Senior Business Correspondent at The National, Abu Dhabi, the discussion provided a retrospective analysis of 2016, focusing on key growth areas for 2017.
Frank Kane opened the morning’s discussion by looking back at a year punctuated by unexpected events: “We have seen a constant stream of negative, contrary news. From Brexit in the summer through to Trump last month, in between continuing pressure on oil prices and worries about world economic growth, all in all I think it is safe to say that it has been quite a bad year.”
Ali Güven, Managing Partner, Head of MENA Region Value Partners, and keynote speaker, stressed that it would be difficult to predict 2017: “2016 has set the stage for a very uncertain 2017. There are many predictions about 2017 but what I believe is that no one really knows. In terms of the region, the number one subject is oil dependency. Each country has a vision ahead of 2020 and I believe a primary factor across the board will be diversification. It’s very easy to think about the negative side of the situation, but I think it’s a very big opportunity, especially for the region, to change the way we do business.”
A significant development for the UAE business community, and a positive for both local and foreign investors in 2016, was the introduction of new legislation around bankruptcy. Peter Hodgins, Partner at Clyde & Co, noted the bankruptcy law could be viewed as an indicator of the cycle turning: “It’s not just litigation and restructuring, we are seeing a lot of inward investment,” he said.
The next question posed by Kane was that of employment, asking: What does all of this mean for the executive recruitment market?
Peter Greaves, Partner, TRANSEARCH Middle East, said: “From what we’ve seen, 2016 has been a very, very challenging year. Many projects were cancelled which had a massive impact on downsizing. 97,000 people will have left Qatar by the end of this year, predominantly in the oil and gas sector. Abu Dhabi has also been affected in banking and other sectors. There is investment, but not necessarily within the region which has had a huge impact on employment growth. Despite this, Dubai still has opportunities. Today, I think the opportunities are here, even in the banking sector which is downsizing,” he said.
In terms of financial services, the panellists agreed 2017 would be a seismic year, with the sector seeing a radical overhaul over the next 12 months. Commenting on the emerging narrative surrounding financial technology (fintech), Kane asked how it would change the financial scene and where the region was positioned within the movement.
Ali Güven stressed that fintech could be viewed as an area for opportunity: “This is a very young region and one of the first subjects to be talked about is youth and employment. Mobile internet technologies are mainly emerging in two basic areas; there is telecom and media, and fintech. The region is 20 years behind Western Europe and the U.S., where these are saturated markets. The region has a big opportunity,” he said.
According to the panel, among the challenges facing 2017 will be the introduction of VAT in 2018, the planning of which will begin next year, along with the payment of invoices, which may be particularly difficult for SMEs.
Based on the predictions on the panel of experts, the changing landscape of the oil sector will necessitate diversification and growth in other areas. The challenge, according to the panel, lies in effectively implementing change and utilising growth. While the forecast for 2017 was largely a positive one, it will undoubtedly, according to the panel of experts, be a year for changing and reshaping the way we do business.