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Tuesday, April 13, 2010
RECORD LEVEL US EXPORTS TO ARAB COUNTRIES INDICATIVE OF IMPORTANCE MIDDLE EAST IN GLOBAL RECOVERY
NUSACC Study shows strong growth in US exports to MENA Region
The Washington Post reported on a research report by the National US-Arab Chamber of Commerce (NUSACC) that calculated that US export levels to the Arab countries in the Middle East and North Africa (MENA) will rebound to r...ecord levels after a 9 percent drop in 2009.
The 20 percent growth to a record USD 75 billion is indicative of a solid rebound after the crisis. It is also a clear sign of the importance of the Middle East as one of the catalysts for renewed economic growth within the Emerging Markets. It is not a pure China story anymore, and not even a BRIC-only story. We at LMG Emerge believe firmly that the best investment opportunities for the next 5-10 years will be in the Middle East and Africa. The figures presented in the NUSACC report show that the UAE, Saudi, Qatar, Egyption and Iraqi markets are the most important ones for the US. Libya is also a fast growing market since sanctions were lifted in 2004, but the US is still not the preferred supplier in Khadafi's country.
Goods and services exported by the US include drilling equipment, cars, civilian aircraft and telecommunications products. Consumer products (especially to Egypt, the most populated Arab state) are important as well.
But when comparing export numbers with those in 2008, especially those of the months before the Crisis, we see that it is not these projects that make the difference in explaining the new record levels. The real explanation lies in a couple of mega-size infrastructure projects with Saudi Arabia and Iraq being important markets in this respect. Libya and Algeria are planning large projects as well, but it remains to be seen if the US will get its piece of the action here.
Summarizing, LMG Emerge believes that the news is important for those investors and entrepreneurs who are looking to an expansion of their activities in the Middle East. Interested parties should however always keep in mind that the MENA region remains a complicated one, one that you should only enter after carefully incorporating all risks in your analysis. Not just general political risks and/or macroeconomic risks but financial risks and project related risks as well. For more information, feel free to contact us.
Principal at LMG Emerge. LMG is an internationally operating independent financial consultancy firm headquartered in Zeist, The Netherlands.
Our clientele consists of institutional and high net-worth private investors (investment advice) and corporates (valuation advice, risk analyses).
Our areas of activity include: Asset Allocation, Selection of Financial Providers/Asset Managers and Emerging Markets advice.