MENA Region Poised for Growth Amid Global Economic Trends

UAE, 5 July, 2024 : The Middle East and North Africa (MENA) region, particularly the Gulf Cooperation Council (GCC) countries, is at the forefront of global economic transformation. Through strategic initiatives and significant investments in sustainable growth and innovation, the region is poised to harness the benefits of digital transformation, demographic shifts, and climate change.

Global economic trends such as demographic changes, digital transformation, green transition, and economic fragmentation are reshaping the landscape. The global digital economy is projected to exceed $11 trillion by 2025, while the market for clean energy technologies is expected to surpass $650 billion annually by 2030. Despite challenges, the global economy is anticipated to double its current size, reaching $200 trillion before 2050.

Amid these changes, the MENA region, especially the GCC, is emerging as a key investment hub. Diversification efforts have boosted non-hydrocarbon GDP, enhancing the region's global economic role. The region's strategic location, bridging Africa, Asia, and Europe, is crucial for global trade, with 30% of trade passing through the Red Sea and the Gulf of Aden. Foreign direct investments (FDIs) in GCC economies surged from $20 billion in 2017 to $68 billion in 2022.

Demographically, the MENA region stands out with a young and growing population. By 2050, the region is expected to have a population of over 750 million, with a significant working-age demographic, offering a substantial "demographic dividend." This young population facilitates the rapid adoption of innovative technologies, driving productivity gains.

Technological advancements such as artificial intelligence, robotics, and blockchain are set to dominate value creation. The GCC's proactive government initiatives, substantial investments in technology infrastructure, and a tech-savvy population position the region as a leader in the digital economy. FDIs in digital sectors in the Middle East grew by 50% over the last decade.

The green transition is another key trend, with the MENA region committing to sustainable practices. Despite challenges, the transition will drive productivity through investments in green technologies. The region's abundant capital and commitment to clean energy position it well for the new clean economy. Annual investments in clean energy are expected to grow to $326 billion by 2040, with the Middle East exhibiting the highest renewables capacity gain globally in 2022.

Global security and trade concerns also impact the economic landscape. The MENA region's strategic location and role in global trade and security underscore its importance. The heavy container traffic through the Red Sea and the growing air transit corridor highlight the region's potential as a leading logistics and trade hub.

The strategic importance of the MENA region, particularly the GCC countries, is set to rise amid global economic trends. Navigating these trends requires awareness, national commitment, and good governance. By staying adaptable, the MENA region can leverage its strategic advantages to drive sustainable growth and innovation in the global economy.

Source : www.zawya.com