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Airline industry sees long-term rebound for sector

Aviation|: Paris: After flying into the financial turbulence of the Covid pandemic, the airline sector expects passenger traffic to take off despite concerns about the industry's impact on climate change. In its latest look at trends for the sector, the International Air Transport Association (IATA) said it doesn't expect world air traffic to resume to its pre-pandemic level before 2023. But over 20 years, air traffic should almost double, from 4.5 billion passengers in 2019 to 8.5 billion in 2039. That is, however, a drop of one billion passengers from IATA's pre-crisis forecast. Nevertheless that will be good news for aircraft manufacturers, who slowed down production during the crisis as airlines cancelled orders to stay financially afloat. Airbus has already announced it plans to step up the manufacturing cadence of its best-selling A320 single-aisle aircraft and should reach a record level already in 2023. Boeing, for its part, forecasts that airlines will need 43,110 new aircraft through 2039, which will result in a near doubling of the global fleet. Asia alone will account for 40 percent of that demand. As with the September 11 attacks or the global financial crisis of 2007-2009, "the industry will prove resilient again," Darren Hulst, vice president of marketing at Boeing, said last year. Marc Ivaldi, research director at the Paris-based School for Advanced Studies in the Social Sciences, noted that only one percent of the population currently uses air travel. "With the simple demographic rise and the fact that people become richer there will be rising demand for air travel and thus for aircraft," he told AFP. If the biggest aircraft fleets are currently in the United States and Europe, the biggest increases are expected in Asia and the Middle East, the consulting firm Oliver Wyman said in a recent study. Flight shaming Airbus delivered 19 percent of its planes to China, more than the United States, and this trend is not expected to change. In many emerging countries where the middle class is expanding air travel is becoming possible for more and more people. "Among Asia's emerging nations, one of the greatest aspirational goals is simply the ability to fly internationally," said the Center for Aviation (CAPA). "It is a sign of social and economic maturity and permits experiences which were unthinkable for their parents." It noted that these people were unlikely to share the growing sentiment among some people in the West towards reducing air travel to reduce one's carbon footprint. "For these new would-be flyers, the whole concept of 'flight shaming' at a grass roots level is grossly alien," said CAPA. "Consequently, in Asia flight shaming is unlikely to gain much traction," it added. The "flight shaming" or "flygskam" movement took off in Sweden in 2018 to challenge the growing popularity of air travel, which had boomed in Europe thanks to budget airlines that made weekend getaways across the continent affordable to a wider public. In 2019, air traffic declined by four percent in Sweden - but it hit a record across Europe, according to the air traffic control body Eurocontrol. EHESS's Ivaldi believes flight shaming will have little long-term impact. "Someone who makes one flight per year in a plane, do you really believe that they will say that it is too polluting and give it up?" he said. But countries like Sweden have begun to reintroduce night trains to give travellers greener options to travel. France, which is boosting its night trains, is also cutting domestic flights when it is possible to make the journey by train in under two and a half hours. Ivaldi believes that to be a largely empty gesture as fast trains have already taken most of the market on such routes. The air sector has pledged to cut its carbon emissions in half by 2050 from their level in 2005. Airlines have an economic incentive to do so, as adopting more fuel efficient planes reduces operating costs.

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Saudi wealth fund makes senior hires, including Goldman banker

Markets|: Saudi Arabia's $430 billion sovereign wealth fund made three senior hires, including Goldman Sachs Group's head of investment banking in the kingdom, as it expands deal-making. Goldman banker Eyas AlDossari will head investment advisory within the MENA Investments Division of the fund, according to a statement. Omar AlMadhi, who previously worked with Saudi Aramco and Volkswagen AG, will join him at the division as co-head of direct investments. The fund also appointed Abdullah Shaker, who previously worked for Saudi AlBaraka Banking Group and HSBC Holdings Plc, as the head the capital finance advisory and planning department at its Global Capital Finance Division. The PIF has been on an aggressive hiring spree over the past six years as it looks to transform from a domestically focused holding company, into the world's largest sovereign wealth fund. Last week, the fund appointed Turqi Alnowaiser and Yazeed Alhumied as deputy governors. The wealth fund is a key lever for the kingdom's efforts to revive growth after a recession caused by the coronavirus pandemic and lower oil prices. Chaired by Crown Prince Mohammed bin Salman, the fund has outlined a plan to grow its assets under management to over $1.1 trillion by 2025, while investing $40 billion annually into Saudi Arabia's economy. Since 2015, the PIF has grown assets under management to $430 billion from about $150 billion. It has taken stakes in Uber Technologies, put $45 billion into SoftBank's Vision Fund, and backed electric vehicle maker Lucid. It also increased headcount to more than 1,100 from about 40.

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Saudi Arabian hospitality firms weigh $2.4 billion merger

Tourism|: Dubai: Taiba Investment Co. and Dur Hospitality Co. are in talks to combine their businesses, potentially forming a company with a market value of about $2.4 billion in Saudi Arabia's real estate, hospitality and investment industry. Taiba, which has a market capitalisation of 5.5 billion riyals ($1.5 billion), operates as an investment company in sectors ranging from real estate and tourism. Dur, valued at 3.5 billion riyals, is mainly focused on operating resorts, housing compounds, and restaurants in Saudi Arabia. Assilah Investment is the top shareholder in both companies. Opening up to tourism is a key plank of Saudi Arabia's plans to diversify its economy. The kingdom's plans include the Red Sea Development, which will oversee a luxury tourism zone equivalent in size to Belgium, an entertainment hub near the capital, and a new city in the north-west called Neom that's expected to cost $500 billion to build. Taiba and Dur said the discussions are preliminary and may not lead to a combination. The Public Investment Fund holds stakes in both companies and is part of a push to get firms to combine, creating bigger and more efficient entities. Last year, the powerful sovereign wealth fund was involved in the merger of National Commercial Bank and Samba Financial Group, the biggest banking takeover of 2020. And earlier this year it consolidated all its stakes in three food companies - Almarai Co., National Agricultural Development Co and Saudi Fisheries Co. - into a wholly owned unit as part of efforts to boost food security. PIF, as the fund is known, appointed two deputy governors earlier this month as it embarks on a plan to grow its assets under management to $1.1 trillion by 2025 from $430 billion, while also investing $40 billion a year into the domestic economy. The fund holds stakes worth about $100 billion in listed Saudi companies, including in firms like Saudi Telecom Co., Saudi Arabian Mining Co., and Riyad Bank. It also owns the Red Sea Development, which will target 1 million visitors a year when the entire project is completed in 2030.

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Songwon Polysys: Leaders in polyolefins manufacturing makes presence felt at Polymers Park

Business|: When did Songwon Polysys Additives decide to set up base in Kizad, and why? SONGWON established its plant in the Khalifa Industrial Zone Abu Dhabi (Kizad) in 2016, and since then the company is pleased to have become a part of the Emirate’s growing polymers industry. Kizad lies between Abu Dhabi and Dubai, and is easily accessible by sea, air and road. Its strategic location provides easy access to commercial, technical and logistical support. Kizad has a clear IT and tracking system, building permit processes are easy to navigate and all the contacts are in place. Furthermore, various key government ministries have also digitised their systems. Any company setting up here today would find it to be a walk in the park Hans Daniels, General Manager, Songwon Polysys Additives This is a positive feature for us, as our raw materials arrive by sea from Korea, Singapore, and Malaysia. Abu Dhabi itself is at the heart of the UAE and the Middle East, which together constitute a major consumer market for additive blends known as OPS (One Pack Systems) and one of the fastest-growing for polyolefins. Being located here places SONGWON in a strong position to meet regional demand and enables us to contribute to replacing imports with locally produced products. From Abu Dhabi, we supply customers in Saudi Arabia, Egypt, Oman, and the UAE. Our OPS customers in the Levant and GCC are pleased to have a locally based partner with a global reputation for quality, service and technical compliance that can offer them the security of supply that they demand. Please share some information on your product portfolio and the industries it caters to. In our Abu Dhabi plant, we produce Songnox One Pack Systems (OPS), consisting of a multi-component blend of additives integrated into a dust-free, pelletised form. Songnox OPS are 100 per cent active additive blends, tailored from a wide range of additive products to meet customer needs. Homogeneous and highly accurate in composition, the pre-dispersed pellets can be easily processed into a polymer matrix. OPS help to optimise our customers’ compounding processes, improving dosing accuracy, minimising dust, increasing process reliability and reducing quality control and logistics costs. Songnox OPS are 100 per cent active additive blends, tailored from a wide range of additive products to meet customer needs Image Credit: Supplied Thanks to their high consistency, OPS can be of particular value to a wide range of industries and applications where end-use specifications are critical. Additionally, OPS do not require the use of the carrier materials often needed where separate powder additives are combined. What are the advantages that the Polymers Park offers businesses such as SONGWON to run a successful enterprise, and what are the challenges you surmounted while setting up base? How can Kizad improve on its value offerings to companies setting up base at the free zone? When we established SONGWON’s presence in Abu Dhabi, Kizad was still in its early days and the regulatory environment was fairly challenging. Processes were not yet completely streamlined, there were infrastructural challenges, and approval time visibility and the required approvals themselves were not yet optimal, which gave rise to surprises that required a great deal of hands-on follow up. The positive side is that Kizad’s management was highly committed to making improvements from day one. Year-over-year, we have seen an impressive streamlining of Kizad’s organisation and an ease of doing business. Today, Kizad has a clear IT and tracking system, building permit processes are easy to navigate and all the contacts are in place. Furthermore, various key government ministries have also digitised their systems. Any company setting up here today would find it to be a walk in the park. Do share Songwon Polysys Additives’ expansion plans in Kizad as well as in the UAE and the region. SONGWON just completed an investment, doubling production capacity at the Kizad plant. This is to support the developments in Abu Dhabi and the surrounding GCC. SONGWON remains fully committed to invest where growth is required to support the industry.

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Harwal Group builds new polymer facilities in Kizad

Business|: Harwal Group is pleased to collaborate with Khalifa Industrial Zone Abu Dhabi (Kizad) to build its manufacturing facilities at the Kizad Polymers Park. The facilities will be for its flagship companies: Interplast and Cosmoplast, to produce and supply a wide range of standard plastic products, and customised products for specific industries. “Kizad Polymers Park is an important platform for enhancing our business in the UAE and Middle East region while enabling us to expand our reach into the African and European markets. The supply chain efficiencies, strategic location, competitive setup solutions and world-class facilities provided by Kizad will position Interplast and Cosmoplast to support Abu Dhabi’s Economic Vision 2030 and industrial diversification across the UAE,” said Walid Najjar, General Manager, Interplast/Cosmoplast. Established in 1971, Cosmoplast is the most diversified consumer plastic products manufacturer and the largest producer of thermoplastic pipes in the GCC. Kizad Polymers Park is an important platform for enhancing our business in the UAE and Middle East region while enabling us to expand our reach into the African and European markets. The supply chain efficiencies, strategic location, competitive setup solutions and world-class facilities provided by Kizad will position Interplast and Cosmoplast to support Abu Dhabi’s Economic Vision 2030 and industrial diversification across the UAE Walid Najjar, General Manager, Interplast/Cosmoplast Its renowned plastic household and outdoor furniture products, iceboxes and coolers, plastic disposable tableware, aluminium foils, cling film and hygienic packaging products are sold across thousands of retail outlets in over 65 countries worldwide. In addition, the company provides customised plastic molding solutions for various industrial sectors. Cosmoplast also caters to the building and infrastructure with its diverse range of PP-R, PE-X and CPVC pipes and fittings in addition to uPVC well casing, uPVC & PE drainage and pressure pipes. Established in 1981, lnterplast manufactures flexible packaging solutions, plastic and paper luxury shopping bags and thermoformed products under the trade names Decopack and Decoform. Interplast’s range of ALUPEX fire rated ACP panels, and its Duramax range of PVC storage sheds and fencing systems are sold globally. The company also develops PVC compounds, masterbatches for different applications and produces a diverse range of uPVC and PE electrical products under the brand names Decoduct, Intergard and Edison. Combining innovation and excellence, Harwal Group is the largest plastics converter in the Middle East. Founded in 1938, the Group has over 6,000 employees globally and 28 different business units. Headquartered in UAE, Harwal Group has complete manufacturing facilities in the UAE, Saudi Arabia, Russia, China, and the US. “With a combined area of 310,000 sqm for Interplast and Comoplast facilities at the Kizad Polymers Park, Harwal Group aims to increase its existing annual conversion of over 200,000 tons of polymers. We have started construction and plan to expand in due course as we realise the potential to cater to a variety of different polymers segments, such as packaging, construction, household goods, agriculture, and hygiene products. The state-of-the-art facilities will contribute to the growth of Kizad’s Polymers Park where polymers convertors can produce their products faster, cost effectively, and sustainably,” added Najjar. In addition to engaging local and regional markets, Harwal Group in collaboration with the Kizad Polymers Park plans to provide meaningful market awareness and showcase advanced products and material solutions. The Group plans to create new jobs and further expand its existing plastic recycling operations, contributing to a new circular economy approach in the UAE.

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Dubai start-up platform Intelak Hub announces 2021 programmes for aviation and tourism

Tourism|Aviation|: Dubai: Intelak Hub, the region’s only start-up platform dedicated to the travel, tourism and aviation sectors, is inviting local, regional and international start-ups to apply for its new cohorts of programmes, commencing 13 June 2021. Bringing together three distinct platforms - Intelak Incubator, Intelak Accelerator and the Intelak Idea Lab - the Intelak Hub is an important enabler for entrepreneurial growth, supported by Dubai’s strategic investment priorities and hyper-connected, global location. Now in its second year, Intelak Hub is led by a consortium of industry leaders who serve as the platforms’ principle partners, taking a holistic approach to nurturing start-ups at all stages of growth. This includes, with all providing mentorship to programme participants such as Dubai Tourism, Emirates Group, Accenture and Microsoft. With a substantial footprint across the world’s aviation, tourism, technology and innovation industries, the principle partners have built a robust ecosystem dedicated to mentoring start-ups from ideation through to equity-free funding, growth and scaling. What’s more, programme participants will have access to a robust alumni pool for networking and business opportunities, in turn allowing them to approach more complex business challenges and benefit from collective perspectives. “Launched last year amid the pandemic, Intelak Hub is testament to Dubai’s capacity to transform challenges into opportunities, as it has quickly and successfully entrenched itself within the start-up community as a catalyst for disruptive thinking," said Yousuf Lootah, Executive Director - Tourism Development & Investments, Dubai Tourism. "As we move into our second year under this platform, we are honoured to collaborate with our esteemed partners to drive entrepreneurship forward and leverage these pioneering programmes to support and empower the resurgence in international travel and tourism.”  Ranked eighth on Bloomberg’s COVID Resilience Ranking [April 2021], the UAE and Dubai continue to build on a strategic roadmap designed to drive business growth as well as R&D and first-of-its-kind regulatory sandboxes to accelerate innovation and entrepreneurship. Intelak Hub’s 2021 offerings include the Intelak Incubator, a 12-week programme for early stage start-ups offering equity-free funding, market feasibility guidance, pitch deck advisement, and demo day showcases where Dubai is used as a proof-of-concept for their solutions. Additionally, it will include Dh50,000 in equity-free funding, with the opportunity to showcase solutions at a demo day, and further access to ecosystem collaborations. The Intelak Accelerator is an eight-week programme for late stage start-ups looking to scale their businesses, offering comprehensive go-to-market counsel, access to partner ecosystems to test and implement their solutions, exhibition space and exclusive pitching and investor opportunities at GITEX Future Stars – a premier technology event for the region. Finally, the Intelak Idea Lab is a three-week programme nurturing young Emirati talent as part of the UAE’s vision to develop and support home-grown innovation and entrepreneurship. Applicants can be considered for all programmes regardless of which programme they enter when joining Intelak Hub and start-ups do not need to be based in Dubai to take part. All cohort programmes will have a hybrid structure consisting of physical and digital components.

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flydubai will begin flying to Hungary and Slovenia in September 2021

Aviation|: Dubai: Budget carrier Flydubai will begin operating flights to Budapest and Ljubljana. The carrier will have three weekly flights to Ljubljana from September 24 and four weekly flights to Budapest from September 30. Flights from Terminal 3, Dubai International (DXB) to Ljubljana Joze Pucnik Airport (LJU) will operate on Wednesdays, Fridays and Sundays. Flights to Budapest Ferenc Liszt International Airport (BUD) will operate on Tuesdays, Thursdays, Fridays and Saturdays. Return business class fares from DXB to BUD start from Dh8,000 and economy fares start from Dh 1,100. Return business class fares from DXB to LJU start from Dh8,000 and economy fares start from Dh1,900. “As demand for travel continues to increase, Budapest and Ljubljana are welcome additions to our growing network - with more countries lifting restrictions on international travel, we look forward to providing passengers with more options for travel this year following the launch of our wide range of summer destinations,” said Ghaith Al Ghaith, Chief Executive Officer at flydubai. With international travel restrictions gradually easing, flydubai has grown its network to over 80 destinations including several seasonal summer routes such as Bodrum and Trabzon in Turkey, Batumi in Georgia, Mykonos and Santorini in Greece, Tivat in Montenegro and Naples in Italy. “We are pleased to see our network in Europe grow further with the start of operations to Budapest and Ljubljana,” said Jeyhun Efendi, Senior Vice President, Commercial Operations and E-commerce at flydubai. Emirates will codeshare on flights to Budapest and Ljubljana offering travellers more connections through DXB to 168 destinations between both the Emirates and flydubai networks including Australia, China, Indian Ocean, Japan, South Asia, and the United States. 

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GPCA: Catalyst for the regional petrochemicals industry

Business|: Please highlight some of the critical functions of the Gulf Petrochemicals and Chemicals Association. GPCA was established in 2006 to represent the downstream hydrocarbon industry in the Arabian Gulf. Today, we voice the common interests of more than 250 member companies from the chemical and allied industries, accounting for over 95 per cent of chemical output by volume in the GCC. GPCA supports the petrochemical and chemical industry in the Arabian Gulf through advocacy, effective networking and thought leadership initiatives aimed at helping member companies to connect, share and advance knowledge, contribute to international dialogue, and become prime influencers in shaping the future of the global petrochemicals industry. We are committed to providing a regional platform for stakeholders from around the world through our six working committees – Plastics, Supply Chain, Fertilisers, International Trade, Research and Innovation, and Responsible Care (Health, Safety and Environment). We organise a series of annual conferences and awards, and publish an array of industry reports and reliable information about the chemical industry in the region. As an anchor body for the regional petrochemicals industry, how expansive in GPCA’s view is the role of Kizad’s Polymers Park as an enabler for sectoral growth? The creation of Kizad’s Polymers Park is a significant step forward in the UAE’s economic diversification drive and supports the growth and development of the plastics sector in the region. Beyond their contribution to the plastics industry, the development of value parks, such as Kizad’s Polymers Park, contribute tremendously to socio-economic development. Thanks to the concept upon which they are built, value parks when coupled with an equally strong and dynamic base of a downstream industry, help to serve both national and international markets, while multiplying their contribution to the region’s GDP and job creation. On average, the combined value of hydrocarbon resources is multiplied 1.9 times when the oil is converted to base petrochemicals but is multiplied 8.3 times if the same gets converted to a resin; the value of oil increases 15 times when the final product is a downstream conversion product, such as packaging material. The petrochemical industry has a significant job multiplier effect, where 1 job in the petrochemicals industry helps to create 4 new jobs elsewhere in the economy. In comparison, greater downstream penetration has an even higher job multiplier effect at 7 times or more. The success of polymer clusters can spur and enable other key non-polymer clusters that contribute further to growth and diversification of the regional economy. How has the GPCA supported Kizad and the Polymers Park in its initiatives? Since its inception, GPCA has consistently advocated for the development of the downstream industry in the Arabian Gulf and supported its members on their journey to success through its advocacy, networking and thought leadership pillars in tandem with the industry’s exponential growth. Since 2006, we’ve witnessed the chemical sector in the region grow from 9.7 metric tons to 33.7 MT – this is in no small part thanks to its availability of competitively priced feedstock, proximity to key export markets, and the collaborative effort and vision of regional leaders. GPCA is proud to have stood by the industry over these years and for having provided a platform for knowledge sharing and best practice exchange to support its further growth. On numerous occasions we’ve provided a platform for networking and collaboration on the topic of industrial clusters. As part of our Annual GPCA Forum in 2019 we hosted a dedicated session on chemical value parks, which saw government and industry leaders discuss how industrial clusters and value parks can be developed, how clusters affect a region’s economic future, and the way in which a region can establish strategies and actions to drive its economy, clusters, and value parks forward. Kizad’s Polymers Park is a prime example in the UAE’s drive towards value creation and economic development. However, in order to create a truly enabling environment in which value parks can prosper, we would need to develop SME-tailored infrastructure, on-site shared services, strong logistics systems, ensure the integration of services and operations to support demand, as well as improved utilisation rates of assets. How is the Polymers Park proving beneficial to GPCA’s member organisations? GPCA has a diverse member base both geographically and by sector. Our members come from different parts of the globe and range from some of the largest chemical and petrochemical producers in the region, to multinational upstream players to SMEs, converters, waste management companies, logistics service providers and others. Kizad’s Polymers Park benefits our members in a variety of ways. It allows access to competitively priced raw materials, favourable investment policies, as well as proximity to key export markets such as Africa and Asia. It brings the polymer value chain together in one centralised hub and helps to reduce utilities and supply chain costs, thus contributing to the competitiveness of the regional industry. It also helps to attract foreign investment into the region. How do you envisage the growth of the regional polymers industry and the Polymers Park’s pivotal role? The share of polymers in the region’s production capacity as well as revenue has been significant over the last decade, and the segment will continue to drive growth into the future. Performance polymers and rubbers grew at the highest CAGR at 20.2 per cent from 2010-2020. The strongest contribution to GCC chemical exports over the past decade came from polymers, which claimed almost one third of total export volume in 2019. At the same time, polymers contributed to almost half of the chemical sales revenue (48.6 per cent) as well as exports (29.6 per cent) generated by the GCC industry in 2019, making it the largest contributor to the GCC chemicals trade revenue surplus. We estimate GCC production of commodity polymers and performance polymers to reach 38.5 metric tons by 2030. The UAE’s plastics production is estimated to reach 7.5 million tons by 2030, cementing its position as the second largest polymers hub after Saudi Arabia. Plastics growth in the UAE will be spurred by Borouge 4 – the fourth expansion of Borouge’s integrated polyolefins complex in Ruwais – which will more than double the current 4.5 million tons per year capacity of its production site by 2030. The Polymers Park will play a significant role in the industry growth narrative by offering a world-class infrastructure network for all necessary utilities, ensuring reliable and efficient supply for polymers conversion, and accelerating investment and innovation in the region’s plastics industry.

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Relaxation of restrictions triggers strong rebound in Middle East economies

Business|: Dubai: Business confidence in the Middle East has strengthened in recent months as coronavirus restrictions eased and vaccination rollouts progressed according to the latest Economic Insight report for the Middle East, compiled by Oxford Economics. While there are positive signs for recovery in the second half of this year and beyond, economies still remain far from their pre-pandemic levels. According to the report commissioned by ICAEW, the Middle East’s regional GDP will grow by 2.4 per cent this year, a similar rate to the region’s average growth trajectory in the last decade, and an improvement from the 4.4 per cent it shrank by in 2020. Oil production cuts are weighing on output, and new COVID-19 outbreaks have forced tighter lockdown measures in recent weeks, disrupting the recovery process. However, strong Purchasing Managers’ Index (PMI) readings indicate growth accelerating in the coming months, boosted by rapid vaccine rollouts in several countries that will help domestic activity move back towards normality. “The outlook for most Middle Eastern economies looks positive this quarter, but keeping coronavirus levels low will be essential to ensure economies can return to growth,” said Michael Armstrong, FCA and ICAEW Regional Director for the Middle East, Africa and South Asia (MEASA). ”Governments across the region must keep developing sectors and industries that foster innovation, and continue implementing reforms to diversify economies and accelerate them into the post-COVID era.” The region’s economies are in a good position to capitalise on the surge of travel demand when the rest of the world opens up. Preparation for various regional events, such as Expo 2020 in Dubai and the 2022 FIFA World Cup in Qatar, an easing of regional tensions and spending by the Saudi Public Investment Fund (PIF) will also support growth. Overall, GCC GDP will grow by 2.1 per cent this year, after the 5 per cent contraction seen in 2020. Although global COVID-19 cases are still high and new outbreaks are being reported daily, the pandemic looks to be under control in China, Europe and the US. And with the summer tourist season approaching, oil demand is increasing. This, alongside ongoing supply reductions from OPEC+ producers, has stabilised the oil price at above $65per barrel (pb), and $64.4pb for Brent crude in 2021, up from $62. However, given the continuously fragile demand outlook and plentiful scope for stronger supply growth, the upside for oil prices will remain limited through 2022 and 2023 and the report forecasts Brent to average US$61pb during that period. Climate change impact Given the high reliance on the oil sector for growth, and countries’ vulnerability to rising temperatures, climate change is also an increasingly important issue in the GCC region and is receiving a sharper focus in diversification plans in countries such as Saudi Arabia and the UAE. Saudi Arabia’s Green Initiative, for instance, aims to cut CO2 emissions in the Middle East by 60 per cent by 2030 and begin generating half of the country’s electricity from renewables. With many sectors, including much of industry and even travel and tourism, relatively oil-intensive, the authorities recognise they can’t continue business as usual as they will be exposed to international policies to tackle climate change such as carbon taxation and border carbon adjustments. “The rise in the oil price has boosted revenue prospects for GCC producers, which derive 40-90 per cent of total fiscal income from oil. Higher oil revenue gives governments more scope to support post-pandemic recoveries without undermining efforts aimed at improving medium-term fiscal sustainability,” said Scott Livermore, ICAEW Economic Advisor and Chief Economist at Oxford Economics. “Climate change is a big risk to the economy and society. Without a significantly expanded mitigation effort, the MENA region, which already suffers from climate-related issues like water scarcity, is likely to have major economic consequences that could have pronounced economic impacts by 2050.” The Economic Insight report also outlined a sizeable increase in growth prospects in Iran from the potential return to the Joint Comprehensive Plan of Action (JCPOA) and the lifting of sanctions. Although its economy would only regain its pre-sanctions size in 2023 at the earliest, an increase in oil exports would raise GDP growth considerably over the next few years, with a positive impact felt in both the oil and non-oil sectors.