The Philippines should initiate programs to boost ties with the Middle East, as Gulf countries are emerging as a dominant trade and investment partner for Southeast Asia, according to a new report. The Association of Southeast Asian Nations (ASEAN) has become one of the biggest trading partners of the Gulf Cooperation Council (GCC) countries, according to the GCC Trade and Investment Flows report released by The Economist Intelligence Unit, a forecasting and advisory service. This report maps the Gulf’s shifting trade and investment relationships with the world, and looks ahead to growth drivers and forecasts through to 2018. Among its key findings is the quickening of bilateral trade and investment ties between the ASEAN bloc and the GCC, which consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). The GCC is a critical node in the global economic system, as its larger economies diversify beyond hydrocarbons and into financial services, infrastructure, tourism, agriculture, and private equity, to name a few, the study emphasized. “If you look at the GCC members, they have been increasingly important in the world economy over the past 15 to 20 years, not only because of their massive oil and gas reserves, but also because of the way that the countries are positioning themselves as important hubs,” said Rassem Zok, CEO of Standard Bank, Middle East and North Africa (MENA) region. Singapore in September 2013 scored the first free trade agreement (FTA) with the GCC, the first country outside the MENA region to do so. The agreement, said the report, could serve as a model for a future GCC-ASEAN FTA. Business ( Article MRec ), pagematch: 1, sectionmatch: 1 Data show GCC state-owned oil firms are investing in more upstream and downstream energy projects in the region. Mubadala Petroleum of the UAE has energy production in Indonesia and Thailand, and exploration efforts in Vietnam and Malaysia. In Vietnam, Qatar is a partner in a major petrochemicals project, and Kuwait in a refinery. The GCC has also been expanding its regional non-energy investments. Qatar signed agreements for billion-dollar co-investment vehicles in 2010-2012 with the Philippines, Malaysia, and Indonesia. Similarly, the UAE and Malaysia signed deals in 2013 to develop a new financial district in Kuala Lumpur. There has been interest from GCC sovereign wealth funds in farmland across the ASEAN region, the report said. Gulf interests in ASEAN are expanding to other sectors, including to real estate and finance in the predominantly Muslim countries of Malaysia and Indonesia. Telecoms are another, and in August 2014, Ooredoo of Qatar launched a telecoms network in Myanmar, the study said. In terms of trade, the share of GCC imports from ASEAN has been relatively stable for over a decade, at around six percent of the total. On the other hand, GCC exports to Southeast Asian countries in 2013 constituted 11 percent of its overall exports, just behind China. The majority of exports go to Singapore and Thailand, while new liquefied natural gas contracts between Qatar, Thailand, and Malaysia “should boost exports to ASEAN going forward,” said the paper. On the labor front, the Philippines, like Indonesia, is increasingly a key supplier of migrant workers to the GCC, with an estimated over 2.7 million Filipino workers in the Gulf, or about 12 percent of total migrants to the region. Some Filipino workers in the Gulf are moving from low-wage services to white-collar employment, which “brings an increase in entrepreneurial activity and private investment, with inroads already made in clothing, retail and fast food,” said the report. philstar/business-usual/2015/01/12/1411843/gulf-region-emerging-prominent-trade-investment-partner-asean
Posted on: Fri, 16 Jan 2015 02:54:16 +0000