Given all of the negative press recently regarding upheavals in many parts of the Arab world, it is easy to overlook the fact that in some countries in the region there is not only relative stability, but even large infrastructure projects being implemented on which western exporters should be able to capitalize and increase their exports to the region. Some examples will illustrate the point.
In addition to accounting for virtually all UAE oil production and defense sector acquisitions, the Emirate of Abu Dhabi is moving forward to develop a $10 billion urban transit system, a national railroad network and a nuclear energy industry. The Emirate will also host the 2020 World Expo which will result in the undertaking of major infrastructure and hospitality development including an urban transit project in Abu Dhabi; development of theEtihad Rail network to link the UAE’s major ports and cities; development of Dubai’s new Al Maktoum airport and adjacent logistics, commercial, residential and recreational sites; and the anticipated design and construction of over 100 new hotels and multiple venues with an estimated project value of $40 billion. Additionally, Dubai plans to develop a solar energy capacity of 1,000 mw and Abu Dhabi continues plans to create a nuclear power industry.
In light of these developments, it is no wonder that U.S. exports to the UAE totaled almost $23 billion in 2012, representing a 42% increase over the prior year. It is expected that for 2013 that number will grow an additional 15%. Key market opportunities for U.S. firms will continue to be present in project management and design work on urban transport, rail, oil &gas and power generation (including alternative energy). Demand for imports is being fueled by economic growth rates of 3-4%, and bolstered by strong oil revenues as the UAE implements a one-third increase in its petroleum production.
Given the Kingdom of Saudi Arabia’s robust economy, there are currently about $960 billion worth of projects planned or under way there. Of these, more than $700 billion are megaprojects, or large master planned developments of more than $1 billion, making Saudi Arabia the biggest opportunity in the region for businesses involved in the infrastructure and construction sectors. U.S. exports to the Kingdom in 2012 exceeded $18 billion, an increase of 31% from 2011.
Significant projects including the King Abdullah City for Atomic and Renewable Energy ($150b), the Riyadh Metro($22.5 b), and a plan to build 500,000 new housing units over the next five years seem like just the tip of the iceberg. The country’s total FY-2013 budget, the largest in Saudi history, projected spending of $221 billion.
Qatar is likewise poised for growth as it intends to transform itself from a carbon-based economy to an intelligence-based economy. Having been designated to host the 2022 FIFA World Cup, Qatar plans to spend over $250 billion on physical infrastructures over the next five years. These include: the new Hamad International Airport- $25 billion for completion of the first phase and the $10 billion dollar Phase II; the New Doha Port which is the world’s largest green-field port construction project valued at $8 billion (commercial and naval port); a $40 billion dollar rail construction project (QRail) creating three new subway lines; and $40 billion on new road projects (converting from European systems to U.S.-based designs) as well as public buildings such as schools and hospitals. These projects provide on-going opportunities for U.S. engineering and design firms.
Given EDI’s regional reach spanning the area from North Africa to the UAE, our company is in a unique position to assist western-based firms to learn about these markets and tap into opportunities for export growth.