DUBAI - Saudi Arabia’s oil minister told a Dubai conference Wednesday that Gulf economies remain strong, even as the emirate’s stock market spiraled downwards over debt default fears.
“I want to emphasize that the overall economy of the Gulf region as a whole remains strong,” Ali Al-Naimi told the fourth Gulf Petrochemicals and Chemicals Association Forum.
“One of the fundamentals of our region’s economic strength is the industry convened here for this forum - petrochemicals and chemicals,” he added.
Dubai, which has almost no petroleum or natural gas reserves, has been buffeted by fears of debt default for the past two weeks.
The Dubai Financial Market index has shed over 26 percent of its value since Nov. 25, when Dubai requested a freeze of debt repayments by its largest state-owned group.
Although Dubai’s economy is facing severe problems, speakers were positive in their assessments of the global economic situation.
“There is some room for guarded optimism,” forum chairman and Saudi Basic Industries Corporation chief executive Mohamed Al-Mady told the conference, which he said was attended by more than 1,000 delegates.
Brad Bourland, chief economist for the Saudi firm Jadwa Investments, was more upbeat.
“The global recession is over,” he declared.
“It doesn’t feel like it is, but in fact, most parts of the global economy... have entered into positive GDP (gross domestic product) growth,” Bourland said.
But the Middle East’s recovery had been set back by credit issues, he added.
“Earlier this year we had two high-profile defaults in Saudi Arabia and now we have a debt crisis in Dubai.
“Other emerging markets have had a clear positive trajectory forward. We started to do that, but we’ve been set back a bit by credit.”
Bourland’s comment on Saudi defaults was apparently in reference to two firms, Ahmed Hamad Algosaibi Brothers Co. and the Saad group, which are involved in disputes with various banks claiming they are owed tens of millions of dollars.
In the course of their comments, both Al-Naimi and Mady warned against letting the world’s recent economic troubles lead to increased protectionism.
“Currently, there is a serious concern and some hard evidence that protectionism will gain strength, depressing global trade,” said Naimi. “It is very important for our industry to have access to the world’s market unfettered by artificial trade barriers.”
Mady echoed the same sentiment.
“It is in times such as this that advocates of anti-globalization and protectionist measures find governments tempted and more receptive to adopting policies that... restrict global trade,” said the forum chairman.
“This, I believe, is a very serious challenge to expanding global trade and is a serious concern for the petrochemical industry.” - AFP