GCC business mood ‘upbeat’
Riyadh, May 24, 2010
Fifty-eight per cent of GCC executives find current business conditions improved and 82 per cent are optimistic about prospects in the next two years, said a study.
The second Oliver Wyman / Zogby International survey of 134 C-suite (including CEOs, CFOs and COOs) executives in Saudi Arabia, UAE and Qatar said 67 per cent of the executives in Saudi Arabia perceived conditions to have improved while 85 per cent expressed optimism for the next two years when asked about immediate and near term prospects.
Business confidence is significantly up in the region on both current and future conditions.
Business confidence in Saudi Arabia has risen 19 percentage points to 85 per cent since the last survey in October 2009, the survey showed.
Executives in the three countries are largely satisfied with government handling of the financial crisis with executives in Qatar showing the largest satisfaction figures of 87 per cent, followed by Saudi Arabia at 80 per cent.
“In the last survey in October 2009 we saw confidence down in the shadow of the financial crisis,” said James Zogby, of Zogby International.
“This time, when we asked more general questions about business confidence and the prospects for the future we found real optimism across the region, with Saudis and Qataris the most confident,” he added.
While Saudi Arabia shares a focus on diversification as a strategy for moving forward with the other GCC countries surveyed, the Kingdom exhibits a greater willingness to work with developing countries like China and India than rather than developed nations to improve its competitiveness, the study said.
However, the survey also reported 38 per cent of executives, a 7 per cent rise, still see vested interests as the biggest obstacle to continued government reform and development - essential to the Kingdom’s push for diversification and growth of its economy.
The survey also highlighted some pan-GCC concerns: labour reform is seen by 41 per cent of executives as the issue most requiring immediate attention and by 36 per cent of executives as posing the greatest long-term threat to the region’s competitiveness.
Educational reform was also seen as requiring immediate attention with 31 per cent of executives indicating that as one of the top priorities. - specifically pointing to math/science, foreign languages and critical thinking as topics to focus on within Saudi Arabia.
The business environment throughout the region was also viewed as insufficiently supportive of entrepreneurship and small businesses.
While Riyadh-based executives are more positive, an overall average of 41 per cent of respondents in KSA say government regulations as well as banks are not being very supportive to new startups and 30 per cent feel its is extremely difficult to obtain a loan with reasonable interest for a new business.
“This is an important poll in a region eager for useful data,” said John Turner, a partner in the UAE office of Oliver Wyman who leads its public sector practice.
“The poll will run every six months and its findings continue to deepen our understanding of what matters most to GCC executives. It will inform our growing work with government agencies that are engaged in enhancing the region’s competitiveness,” Turner added. – TradeArabia News Service