Trade between the Gulf economies and emerging Asia surged in 2021 and is expected to reach $578 billion by 2030, according to new research by Asia House.
GCC trade with emerging Asia will surpass its trade with advanced economies by 2028 if current growth rates are maintained – representing a major shift in global trade dynamics, with Asia on course to be the Gulf’s most important trading partner.
‘The Middle East Pivot to Asia 2022’ report also found that trade between the GCC nations and China is at an all-time high, and in 2021 surpassed the GCC’s trade with the US and Euro Area combined.
The London-based think tank also identified a growth in GCC Sovereign Wealth Fund investments into Asia, driven in part by higher oil revenues, with India and ASEAN nations the major beneficiaries.
However, while energy exports continue to be a key driver of GCC-emerging Asia trade, non-oil trade and investment is also strengthening, with economic and social reforms in the Middle East attracting foreign investment from Asia.
Michael Lawrence, Chief Executive of Asia House, said: “The strengthening of ties between the Gulf and emerging Asia is one of the most significant trends we’re seeing in the world economy. This report shows the scale and pace at which these dynamics are evolving, and highlights new opportunities in both regions across energy, digitalisation and sustainability.
“The economic and geopolitical implications of closer Gulf-Asia links are of critical importance to businesses and policy-makers, especially in the face of the bleak global outlook. We trust this report increases understanding of this key trend and its significance in the context of the turbulence in the global economy.”
Freddie Neve, Senior Middle East Associate at Asia House and lead author of the report, commented: “We’ve documented a pronounced acceleration in the Gulf’s pivot to Asia over the past year. Gulf-emerging Asia trade has bounced back from COVID-19 faster than expected and there is a strong outlook for further trade growth.
“High oil prices in 2022 will push up the value of trade, but Gulf economic diversification is also expanding non-oil sectors that are benefiting from Asian expertise and investment. We’ve also witnessed an uptick in political engagement between key Asian and Gulf economies, resulting in tangible deals that will drive trade growth, including new Comprehensive Economic Partnership Agreements (CEPAs).” – TradeArabia News Service