Bal Krishen, Special to Khaleej Times, Dated 08 Jan 2021
The UAE’s decision to resume trade relations with Qatar has been received with great optimism among the business community here, as the historic deal is poised to see resumption of previous investment and trade opportunities between nations.
Of particular importance will be the reopening of Saudi and Emirati airspace to Qatar ahead of the 2022 Fifa World Cup, which Qatar is hosting. The event is expected to draw more than one million football fans with majority of travellers coming from the East likely to use Dubai as a major layover and travel hub.
Dr Azad Moopen, founder chairman and managing director of Aster DM Healthcare, said the Al Ula accord is the “best new year present” the Rulers of the GCC countries have given.
“Apart from strengthening the fraternity between the member countries, this will help to usher in peace and prosperity in the region. This will also provide significant economic boost and pave the way for strengthening trade across multiple sectors. With Expo 2020 and the Fifa World Cup in the horizon, this will act as a significant stimulus towards tourism development in the region.”
Dr Dhananjay Datar, chairman and managing director of Al Adil Trading, said the move is a welcome relief for those who have been having transborder business relationships.
“We are bound to see strengthened activities in retail, logistics and cargo operations. Overall this is a major step, especially in the current situation. The resolution of the dispute will not only boost bilateral relationships but will also lead to diverse opportunities that have far-reaching and positive results. The impact will be felt on various aspects of the economy, right from creation of new job opportunities to enhanced investments in diverse areas. This landmark decision shows the far-sighted vision of the leaders. The economy will show robust growth on account of enhanced trade. The ripple effect will be felt across the region and this will boost growth.”
Qatar’s total trade with the UAE stood at $3.5 billion just before the year the embargo was imposed. On the tourism front, the UAE, along with its Gulf neighbours, have contributed to majority of tourist inflow with a total of 45 per cent of the estimated tourist population.
Qatar’s economy will grow three per cent as the easing of a three-year-old regional dispute will help trade, tourism and logistics, Standard Chartered said, revising its previous 2.1 per cent growth estimate.
“We see the lifting of restrictions on trade and travel on Qatar as adding impetus to the ongoing recovery in trade, tourism and logistics,” Standard Chartered said in a recent note.
It said the UAE lifting restrictions on trade and travel to Qatar could also help the UAE’s trade recovery, “possibly leading to less trade and transit volume via Oman’s port and airport,” after Oman benefited from the re-routing of some trade during the embargo.
Another benefit could be a convergence in Qatar’s onshore and offshore spot currency rates, as foreign liquidity stands to benefit from the lifting of the embargo, it said.
The bank’s revised growth forecast is higher than the 2.2 per cent forecast Qatar gave last month in its 2021 budget.
“Regionally, the boost to consumer and investor sentiment and lower perceived geopolitical risk may contribute positively to economic outcomes, particularly ahead of significant events such as Expo 2020, set to be hosted by Dubai in October 2021, and the 2022 Fifa World Cup in Doha,” it said.
UAE industry applauds
Atif Rahman, director and partner of Danube Properties, said the move is a "great decision" and "the beginning of the new era in the GCC and Arab world leading to unprecedented economic growth".
"I salute the leaders for this great move that will boost regional stability. The socio-political and economic impact of such positive news goes beyond cross-border trade; I strongly believe that the Arab World is one of the strongest global force and the unity between the Arab nations reinforces that strength. From leaders to liquidity to resource to infrastructure, the future belongs to the Arab world."
Faizal Kottikollon, chairman of KEF Holdings, said the reopening of UAE-Qatar borders comes at a very crucial time when the economies of the Gulf countries are recovering from the Covid-19 pandemic and looking forward to economic growth.
"Not only it will help cross-border trade, travel and tourism, but we also expect cross-border investment to pick-up. If everything works out well, the economies of the GCC countries will grow faster than expected due to the re-opening of the borders.I take the opportunity to thank our pragmatic and visionary leaders for facilitating this."
Leena Parwani, founder and CEO of LPH Financial Services, believes the reopening will usher in a new era in economic cooperation as cross-border trade and investment in the UAE is expected to go up in the coming months and years.
"We expect all economic sectors to benefit from investment and trade. This is a very welcome development and it is happening when we are coming out of a major pandemic. We look forward to greater mobility of people, goods and services and look forward to an exciting time ahead."
Gabriel Abed, co-founder of Digital Asset Capital Management, says that any opportunity where two countries can trade with each other is a good thing for the people and businesses of those countries.
"It is just simply better mathematics when you foster collaboration as the result is more fruitful and resilient economies. The Middle Eastern region can greatly benefit from unified trade between members nations and this appears to be a step in that direction."
Sridhar Subbaraman, founder and owner of insureatoasis.com, says the normalisation of ties within the GCC is perhaps the "best new year gift".
"The best economic stimulus would be free trade with immediate neighbours. With two major events within the region — Expo and the World Cup — the economies of the UAE and Qatar will be the biggest winners. The benefits of such events will rub on the vibrant and visionary economies mutually. Real estate now has a dual bonanza with Israel first and reentry of fresh investment from Qatar. SMEs will be the beneficiary."
Arshad Khan, co-founder and CEO of Arabian Bourse, says the restoration of ties between the UAE and Qatar is a step in the right direction.
"After peace accord with Israel, this step will further result in trade and economic benefits for both the countries. The UAE and Qatar were vibrant trade, tourism and investment partners. When globalisation is under threat with Brexit and trade barriers being built between the US and China, such regional alliances shall strengthen the regional trade and investment. The tourism and travel sector got badly hit due to Covid; normalisation of relations with Qatar will result in more people travelling between the two countries, hence helping the travel and tourism sector to undo some of the damages."
Krishnan Ramachandran, CEO of Barjeel Geojit Financial Services, said the restoration of travel and trade links between the UAE and Qatar is set to revive an era of vibrant trade and investment between the two countries.
"The UAE was the largest GCC trading partner with Qatar prior to the embargo in June 2017 and we expect that in the near future the UAE will reclaim its share of trade with Qatar."
Kamal Vachani, group director of Al Maya Group, believes investments will pour in and both economies will further flourish.
"Trade will be re-established between the countries, which will be mutually beneficial. Delegations from both countries will visit each other to enhance trade after sea and air routes are opened, and this will give enhancement to trade; with the opening of air space, goods can be transported freely between both countries and the movement of cargo will be easy. This will be very positive for both countries and the entire region as well."
Taher Shams, managing director, Zulekha Healthcare Group opines the UAE has always been known to be an open economy with its diverse beneficial business opportunities and population mix.
"With this advantage the UAE serves as a key center point for international trade to the East and the West economies. On the other side, Qatar has been booming as one of the top economies of the Middle East despite the blockade in 2017. The country acted fast in utilising natural and energy resources within and ensured stability. The enterprising spirit of both economies will be mutually beneficial in reviving the nations just as every country begins to see light post the pandemic.”
Khurram Shroff, chairman of the IBC group believes Saudi Arabia opening its borders with Qatar, and now with the GCC coming together as a team, will add value to the entire region.
“In the post-Covid era, there seems to be a consensus on letting go of the past and moving forward with positivity. Not only is this the need of the hour, but I believe it could well be the beginning of the emergence of a new, more prosperous, and economically diversified Middle East. It’s the sort of mindset that can create growth avenues for all, and energise the GCC, with a new wave of collaborations, innovations and opportunities.”
The normalisation of ties between Qatar and the UAE will foster economic growth for both nations. The two nations have even more open and investment friendly economies, since their disagreements in 2017, informs Sanjeevv Bhatia, CEO SB Group & Netix Global BV
“The space for collaboration and investment in the real estate industry is now wide open. And we expect technology to play an important role, in optimising that opportunity. With the 2020 FIFA World Cup coming up, it’s important that the GCC unites, and gets behind what is the first time the region will showcase an event of this scale, to the world. Low oil prices may have initially been the driving force behind the diversification of the economy sought by multiple GCC countries. But, increasingly, the economic rationale of cooperation and partnerships has prevailed in the Middle East. And this is a great sign. A modern, well connected and technologically empowered GCC will generate tremendous opportunities and economic activity, across all sectors.”