For many in the Caribbean family, the 21st century marked a great new beginning; a goodbye to bitter legacies of colonialism and the tensions of the Cold War. The 2000s brought a new sense of unique identity within individual nations and the Caribbean as a whole. Now, with 2020 fast arriving, there’s never been a better time to pursue new business partnerships underwritten by global reach and tech advancement.
Just as the Caribbean has been forging a new path, another region has been travelling a similar journey. Nations across the Middle East and North Africa (MENA) region recognize that the next decade, due to a mix of local factors and global trends, requires substantial change in their business communities. So, where may Caribbean nations and MENA find common ground in the 2020s? And what can the Caribbean learn from MENA’s recent history?
Let’s look now.
MENA’s Goals Looking to 2020
Like the Caribbean, MENA’s regional identity is diverse and complex, but common challenges reside. The first involves the quest for regional stability and security; both the Middle East and North Africa have security challenges that are longstanding and complex.
Even where enduring solutions are difficult to obtain, incremental progress can still deliver net benefits when it comes to economic confidence, community wellbeing and a raft of other social issues. Tension has ebbed and flowed with regional states like Iran and the USA, and here in the Caribbean we can look at Venezuela with concerned apprehension and know a similar feeling.
There is also the aspiration to diversify economies away from reliance on oil exports and fossil fuels. This goal takes on extra weight given that many countries contend with challenges like youth unemployment in the shift to more digitised and globalised economies. Such trends compound the problem in a region where many nations have some of the highest youth unemployment rates in the world.
A Charitable Thought
Within this dynamic, MENA nations have a new drive behind bringing about greater social harmony and equality, recognizing that the current approach to helping those in lower socio-economic brackets has often missed the mark. This may be surprising to local readers who regularly eye headlines about gold-plated license plates on expensive super cars of some of MENA’s most affluent citizens and business tycoons. Those not especially familiar with the MENA region, or the Islamic faith practiced by the majority of its inhabitants, may also be surprised that Muslims globally donated US$ 560bn to charity in 2015.
All Muslims are expected to donate 2.5 per cent of their earnings (after paying for their own basic needs like food and shelter) to charity. The commendable act is somewhat offset by the need to see such donations better co-ordinated to beneficiaries. For many years, results did not follow funding, but now change is being seen.
Caribbean 2020
Every country throughout this region is different, and so are their national goals. Nonetheless, within the Caribbean family there are common trends and aims. Tourism and finance remain key industries yet, as in MENA, there’s the push by many local nations to diversify their economies.
There is also a region-wide desire to better resist hurricanes. Resist is the key word because ultimately nothing can overpower Mother Nature. However, by updating building codes and improving security around critical infrastructure such as water and electricity, Caribbean nations can look to a future where the potential for devastation by hurricanes is minimised.
It’s here that the work of the United Arab Emirates-Caribbean Renewable Energy Fund (as covered in a separate article on page 5 of STAR Businessweek) has been such a worthwhile endeavour in partnering a MENA nation with regional countries.
Beyond this, achieving greater consistency and outcomes in the region’s primary to high school educational offerings, and developing greater opportunities in the post-secondary tertiary sector, are key goals.
MENA’s Era of Reforms
In 2020 alone, the World Bank predicts that MENA will grow by 3.4 per cent. This is up on the projected rate of 1.5 per cent for 2019. At the heart of this new growth is a reformist culture that has been growing across the region, with Egypt and nations along the Arabian Gulf corridor leading the way.
The International Money Fund’s injection of US$ 12bn into Egypt has complemented Egypt’s devaluing of the Egyptian pound and the raising of energy prices. Many in the Caribbean family will be amused, given this region’s ongoing battle with high energy costs, but it has formed part of Egypt’s broader economic shift, with the end of energy subsidies accompanied by a loosening of capital controls and reform of public enterprises. The trade-off to a more promising economy is higher energy costs.
For Caribbean nations seeking to consolidate public spending, there are lessons to be gleaned from the recent reform path of Egypt. This also applies to the region more widely as, like the Caribbean, MENA is an area of sharp economic contrasts, with the financial health of its richest nations, like Qatar, contrasting starkly with its most embattled nations, like Yemen.
Qatar and other countries, like Kuwait and Bahrain, hold comparatively small populations. The former recorded a 1.24 per cent growth in its economy during 2018, and the latter achieved 1.77 per cent growth. Both have known economic doldrums in recent years but are growing in 2019.
Kuwait’s push for greater capital spending domestically is done with the aim of realising goals first sought with a long-term economic development plan that commenced in 2010. Bahrain’s injection of US$ 10bn from the Gulf Cooperation Council is set to underwrite its budgetary consolidation, and drive a predicted economic growth of 2.4 per cent per year.
Where to Next?
New partnerships with these nations, and those surrounding them, must clear many hurdles, not least of which is the ongoing commitment of countries like Kuwait and Bahrain to fossil fuels at a time when many in the Caribbean seek to promote green energy.
On the other hand, shared aspirations to increase the efficiency of the public service, bolster tourism and forge a stronger sense of regional identity mean that plenty of Caribbean and MENA nations today speak a common language in business.
New frameworks are being put in place to further drive this bi-regional relationship. The Kingdom of Morocco and the Organisation of Eastern Caribbean States recently signed an agreement for the establishment of an OECS presence within Morocco.
On paper, trade can be pursued by private business without an official government presence of its home nation close by. In practice, an embassy or consulate provides access to resources like consular support and accommodates local expat business networks, helping to overcome cultural divides and streamline new business.
The Caribbean-MENA bi-regional relationship is entering a promising new era as we look to 2020. Some differences will remain, but common ground can be built and strong foundations laid for the business community in both regions.
